It’s no exaggeration to say that cargo logistics is the backbone of any country. Logistics services are responsible for bringing our food, drinks and other consumer goods to supermarket shelves. Logistics is also how we get the petrol that goes in our cars, and how South Africa as a growing economy is able to participate in the world economy through imports and exports.
The transport logistics industry in Africa, and particularly in South Africa, is developing quickly, offering numerous new opportunities, but there are, and probably always will be, a number of difficult challenges to the industry. In the 10th State of Logistics Survey for South Africa, it was suggested that South Africa needs to focus more on improving transport logistics infrastructure, the high costs of logistics services, and the lack of skilled workers in the cargo logistics industry as a whole. Failure to address these issues in a rapidly growing economy could cause major issues not only in the logistics game, but also in those industries which rely on cargo logistics to do their business as well.
The state of a country’s transport infrastructure (its roads, customs processes, sea and airports, and other features), determine the efficiency with which it can do business and therefore has a direct impact on the growth of the economy. A good infrastructure also encourages investment from overseas, with international companies carefully assessing whether an inefficient infrastructure will damage their bottom line. Government has pledged to spend R813 million over the next couple of years on infrastructure, and cargo and logistics already account for about 42% of all infrastructure spending. This focus on improvement of infrastructure is aimed at improving the national transport network, assisting in mobilising South Africa’s workforce and making local trade easier and more profitable.
However, with the economic crunch, we find ourselves in lately, it is becoming more difficult for Government to find the resources to keep up with their commitment, prompting involvement from the private sector which is helping to fill in the gaps where government funding falls short.
High Logistics Costs
Fuel prices are by far the most volatile, unpredictable and expensive cost in the logistics process.
Logistics providers also have vehicle maintenance, and tyre wear to consider when trucking goods across South Africa. Contributing to high fuel costs are rough roads, traffic congestion, and other problems that South Africa’s infrastructure present. Companies who do a lot of cross-country trucking are also now being faced with the prospect of nationwide e-tolls in the not-too-distant future, raising the costs of road use (and therefore the cost of living in general). While the fuel price is relatively low at the moment, it probably won’t stay that way forever, and logistics providers are going to have to come up with creative ways to keep their prices affordable in an unstable and increasingly expensive local economy.
An Unskilled Workforce
Education continues to plague South Africa as one of the most stubborn and difficult challenges to national prosperity and the fight against unemployment, and will be all the more important in the logistics industry in the future. Technology has made jobs on many levels of the logistics industry into positions requiring basic computer skills and more, meaning that hiring efficient staff for a logistics project is more and more difficult. South Africa isn’t alone in this – 39% of freight businesses worldwide are struggling to recruit people with the skills needed for a modern logistics operation.
Of course, each year and new development seems to bring with it new challenges, but also new opportunities to tackle those challenges creatively. We’re confident that as African business continues to grow, the road freight industry will manage to keep pace and pave the way for a more a South Africa that can continue to compete with the best of the best in terms of road freighting.