Neighbours have better logistics than SA

2011-05-04 07:06

Johannesburg - Inefficiencies in South Africa's logistics system and the high cost of logistics negatively impact the country's global competitiveness, particularly where neighbouring countries such as Namibia and Mozambique offer more efficient, cost-effective alternatives, according to Imperial Logistics, a division of Imperial Holdings [JSE:IPL].
Sharing findings from the 7th Annual State of Logistics survey with Business Unity South Africa (Busa) members on Tuesday, Abrie de Swardt, marketing director at Imperial Logistics, said business was an important contributor to a more effective logistics system.
"Policy and public investment can only take us so far. It is people who operate logistics and supply chain systems and ensure that processes run smoothly," De Swardt said.
The survey found that South Africa's high total cost of logistics decreased by just 1.2% between 2008 and 2009, from 14.7% to 13.5% of gross domestic product (GDP).
This percentage should have been in the region of 12.5% in light of a severe decrease in the interest rate over this period, as well as the sharp drop in the price of diesel.
"This figure is indicative of an underperforming logistics sector," De Swardt said.
"Business can fast track infrastructure development through partnering with the public sector on developmental projects, financially and through providing intellectual capital. As infrastructure is invested in, so our people need to be invested in to deliver heightened capacity on all fronts," he said.
De Swardt said business must align its focus to support public infrastructure investment and collectively tackle issues such as skills development.
A broader, highly skilled expertise base is critical. "Companies must align business strategy to embrace developmental priorities and policies, whilst meeting their own skills and talent development needs," De Swardt said.
Ruan Jordaan, Busa's trade and economic policy coordinator, noted that as the country continued to see higher demand for commodities such as base and precious metals, business must leverage the appropriate transportation mode, such as rail for coal and iron-ore.
"Logistics and supply chain management are critical for our competitiveness, as bottlenecks and backlogs hamper economic growth and raise costs," Jordaan said.