2014 Trends in South African logistics



Logistics.jpgThe CSIR’s 10th Annual State of Logistics Survey for South Africa¹, released in May 2014, highlights progress made and areas for improvement in South African logistics. The survey’s results mirror Tech-Pro’s experiences in this increasingly specialised area of supply chain management, Tech-Pro tells SmartProcurement.

Subtitled ‘Bold Steps Forward’, the survey emphasises the growing importance of the South African logistics industry, particularly as modest economic growth continues. As international trade increases and competition intensifies, logistics performance is set to be the “creator of competitive advantage” and play a “pivotal role in making South Africa globally and regionally competitive”. Managing logistics costs will be a priority.¹

Is South African logistics competitive?

The logistics industry, in the broadest sense, is functioning well in South Africa, says the State of Logistics Survey.

However, the results of the recent World Bank Logistics Performance Index – or LPI – show that South Africa cannot be complacent.² In 2014, South Africa’s LPI ranking dropped to 34th out of 160 countries – our first time out of the Top 30 since the LPI started.

Of the six factors considered, South Africa lost ground in ‘infrastructure’ – dropping to 38th place from 19th in 2012; ‘customs’ – down 16 places to 42nd – and ‘tracking and tracing’ – down from 16th to 41st place.

‘Competence and quality of logistics services’ remained unchanged in 24th place.

A key factor in competitiveness is cost.¹ Logistics industry performance – specifically costs – influences competitiveness. However, South Africa’s logistics costs are high, rising from R393-billion in 2012 to R423-billion in 2013. Estimates for 2014 set spend at R456-billion.

This increase in cost is “not so much the result of deteriorating efficiency in the industry, but the disproportionate growth in cost drivers – especially fuel”.

What are we doing to improve logistics performance?¹

South African supply chains “have moved beyond survival mode to optimised mode…”. Recent improvements include:

1. Infrastructure upgrades: In 2012, Transnet introduced the Market Demand Strategy (MDS) - an infrastructure upgrade, expansion and modernisation project for South Africa’s ports, rail and pipelines. Much of the project funding – estimated at R300-billion – will need to come from public-private partnerships (PPPs). Over the past five years SANRAL has invested in expanding and maintaining the national road network – 19 704km of road – with the result that more than 84% of this network is in ‘fair’ to ‘very good’ condition.

2. Intermodalism: Defined as “the use of two or more transport modes to move a shipment from origin to destination”³, intermodalism can significantly reduce logistics costs. With the MDS and its intermodal strategy, Transnet is actively pursuing private sector engagement and is seeking to regain lost market share by shifting freight transport from road to rail. This strategy is slowly paying off, with rail tonnage growing from 11.4% to 12.1% in 2013.

3. Legislation: The CSIR’s Performance-Based Standards (PBS) or Smart Truck project highlights the role played by vehicle regulation in logistics safety.

Challenges: the talent gap¹

Recent research conducted by the University of Johannesburg (UJ) shows that the South African supply chain skills shortage “has not been significantly alleviated over the past few years”, primarily owing to a lack of new industry entrants; misalignment between educational offerings and industry needs; and talent retention issues.

The UJ research found a disconnect between how experienced supply chain practitioners and new entrants view the industry, which is evident in:

1. Educational qualifications: practitioners believe that a Bachelors degree is necessary at entry level, while students consider a certificate or diploma sufficient.

2. Work experience: is more important to practitioners.

3. Students’ reasons for choosing a supply chain career focus more on ‘enhancing skills’ (32.1%) and ‘being more employable’ (23.7%) than being ‘passionate about the industry’ (17.3%) – making it easier for them to be tempted away to other professions.

What are your views on the state of logistics in South Africa? How is your company meeting the challenge of improving competitiveness? Do you feel the talent gap?

¹: ‘Bold Steps Forward – The 10th Annual State of Logistics Survey for South Africa’,
CSIR, 2014
²:‘Connecting to Compete: Trade Logistics in the Global Economy: The Logistics Performance Index and its Indicators, The World Bank, 2014.
³: ‘Intermodal Freight Transportation’, TRB

Leave a comment

SmartProcurement Newsletter

Please enter your details below to receive the SmartProcurement Newsletter for FREE on a regular basis.

As part of the SmartProcurement Newsletter you will be receiving World Class Procurement News, Tools, Tips, Tactics, Procurement Training updates, Upcoming Events, and the latest Procurement Career Openings.

* Email Address:
* Title:
* First Name:
* Surname:
* Company:
* Country:
* Public / Private:


Career opportunites

Demand Planning Manager

  • <500 000 Gauteng Operations, Planning & Inventory Projects / Category Management
(Total Cost to Company R750k - R900K) excluding ...More

Global Category Manager: CONTRACTS

  • <500 000 Buyer Commodities Contract Gauteng
Total Cost to Company R1mil - R1.2mil excluding

Project Manager :12-18 MONTH CONTRACT

  • <500 000 Contract Procurement Officer / Specialist Projects / Category Management
Description:A well-known retail organization is looking for an ...More

Procurement Analyst

  • <500 000 Analyst Gauteng Permanent Procurement Management
Description:A leading infrastructure development group with strong presence ...More

Commodity Manager: Fuels and Lubes

  • <500 000 Commodities Gauteng Permanent Strategic Sourcing
Description:Ensuring continuity of supply in line with business ...More

Senior Facilities Manager

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
(Total Cost to Company R800K - R900K) Description: ...More

Supply Chain Analyst

  • <500 000 Analyst Permanent Supply Chain Western Cape
(Total Cost to Company R350K - R550K) SOUTHERN ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
(Total Cost to Company R450k - R550k, dependent ...More

Procurement Specialis

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
(Total Cost to Company R700k - R800k including ...More

Solutions Architect

  • <500 000 Analyst Gauteng Operations, Planning & Inventory Permanent
(Total Cost to Company R1.3Mil - R1.1Mil including ...More

Engineering Manager

  • Gauteng Industrial Engineer Permanent Procurement Management
Total Cost to Company R850k - R950K including ...More

Country Head of Procurement

  • Permanent Procurement Management Procurement Officer / Specialist
https://careers.peopleclick.com/careerscp/client_gsk/external1931/gateway.dofunctionName=viewFromLink&jobPostId=359235&localeCode=en-us CBS Procurement,Hub Head of Procurement To lead, ...More

Demand Planner

  • <500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Planning/Demand%20Planner/TP2005490/MSe Category: PlanningPosition Title: Demand PlannerSalary: R600 000 ...More

Head of Procurement

  • <500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Procurement/Head%20of%20Procurement/TP2005488/ZBuCategory: ProcurementPosition Title: Head of ProcurementSalary: R1.3 million ...More

Warehouse and Distribution Manager

  • <500 000 Gauteng Logistics & Warehousing Permanent Supply Chain
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Logistics/Warehouse%20Distribution%20Manager/TP2005455/TMa Category: Supply ChainPosition Title: Warehouse and Distribution ...More

Supply Chain Manager

  • <500 000 Mpumalanga Permanent Procurement Officer / Specialist Supply Chain
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Mpumalanga/Supply%20Chain/Supply%20Chain%20Manager/TP2005448/LMa Category: Supply ChainPosition Title: Supply Chain Manager ...More

Industrial Engineer

  • <500 000 Gauteng Industrial Engineer Operations, Planning & Inventory Permanent
https://www.tech-pro.co.za/pages/jobdetail.aspx#!Gauteng/Consulting/Continuous%20Improvement%20Manager/TP2005489/SNh Category: ConsultingPosition Title: Industrial EngineerSalary: R900 000 ...More

Operations Manager

  • >500 000 Gauteng Operations, Planning & Inventory Permanent Supply Chain
Our client within the FMCG industry with a ...More

Warehouse and Distribution Manager

  • >500 000 Gauteng Logistics & Warehousing Operations, Planning & Inventory Permanent
An exciting opportunity awaits for a Warehouse and ...More

Demand Planner

  • <500 000 Permanent
Get an opportunity to be part of one ...More