Roads drive up logistics costs

Johannesburg The worsening condition of South Africa's roads was negatively affecting the maintenance and repair costs of freight trucks and vehicles, thus escalating logistics costs, the sixth survey on the state of logistics has found.

"The survey... highlights the need for improved road conditions to reduce logistics costs, showing the effect of bad roads on total costs," Council for Scientific and Industrial Research (CSIR) built environment executive director Hans Ittmann said on Tuesday

"Total vehicle maintenance and repair can increase by as much as 121% for a truck travelling on a road with a bad condition rating, with an increase of as much as 10% in total logistics costs of a company," he said at the launch of the survey in Johannesburg.

The survey was conducted by the CSIR, Imperial Logistics and Stellenbosch University.

It found that logistics costs were at their lowest since 2004 in 2008 at R339bn or 14.7% of GDP. However this was still too high when compared to a country such as the United States. South Africa's higher than normal transport demand and poor network configuration, worsening road conditions, more expensive storage and consistently increasing road corridor traffic pushed the country's logistics costs up in 2008.

"For example, the percentage of bad roads in SA's secondary road network increased from eight percent (in) 1998 to 20% (in) 2008 with significant deliveries routed via this road network."

The chief executive of Imperial Logistics, Marius Swanepoel, said his company was continuously working to find sustainable solutions.

The director at the Stellenbosch University Centre for Supply Chain Management, Dr Jan Havenga, said certain aspects of the logistics cost situation in South Africa still needed attention.

"The challenge however remains: Although consensus exists around issues such as regeneration and use of rail capacity, not enough has been done yet," Havenga said.

"The competitiveness and sustainability of South Africa's logistics system remain at risk and moving from consensus to action is long overdue."

He said public-private partnerships were the key to success in the industry.

The survey was first published in 2004.

- Sapa