Transport's contribution to logistics costs reaches 9-year high

| 0 Comments
OilBarrels.jpgThe vulnerability of South Africa’s transport costs to a volatile cost driver - the price of crude oil - and South Africa’s entrenched dependence on road transport does not bode well for the economy, according to the 9th State of Logistics survey for South Africa 2012.

 

The contribution of transport costs to overall logistics costs in 2012 is pinned at 61%, the highest it has been in the past nine years and far higher than the global average, said Nadia Viljoen, scientific editor of the survey, at the survey launch in June.


Logistics costs as a percentage of total GDP are estimated at 12.8% in 2012 and 12.6% in 2011.

A milestone for the State of Logistics survey, researchers from Stellenbosch University have been able to close the time-lag between data collection and publication to ensure the 2013 edition reports on the 2011 and 2012 logistics costs and freight flows.
 

The survey is published in partnership by CSIR, IMPERIAL Logistics and Stellenbosch University.
 

“The survey delivers a message of action,” Viljoen emphasises. “South Africa must address critical issues relating to the road freight sector, shift freight from road to rail and address rampant skills shortages and misalignment in the logistics sector.”
 

Cost drivers
 

For the survey, data obtained from a broad range of industry and government stakeholders identified the key challenges in the South African road freight sector.
 

Respondents felt that poor road conditions (64%), the cost of fuel (52%) and a lack of law enforcement and prevalent non-compliance (43%) are the top three challenges in the industry. The condition of the country’s roads is also regarded as a critical cost driver by 73% of the respondents.
 

Government’s National Development Plan clearly states the tremendous challenge the country faces by effectively missing a generation of capital investment in infrastructure. South Africa is not unique; around the world, inadequate or poorly maintained infrastructure presents major economic challenges.
 

The survey furthermore reports that the contribution of poor road conditions to fatal accidents shows that the effect of bad roads stretches much further than increased vehicle operating costs. Road-related factors contribute to 5–15% of fatal road accidents, of which 28% can be attributed to poor road surface conditions. The total cost of fatal accidents caused by poor road conditions in 2010/2011 is estimated at between R207-million and R621-million.
 

Regional connectivity
 

SADC could become a world-class transhipment community due to its geographic location - South Africa and Mauritius currently rank 39th and 50th, respectively, out of 157 coastal countries in terms of maritime importance.
 

However, the top three constraints to doing business in Africa are unavailability of reliable service providers and partners; lack of adequate infrastructure; and long transit times and unreliability.
 

Skills
 

The unavailability of a skilled workforce is viewed as one of the key constraints to the expansion of business operations in South Africa.
 

This appears to be a global problem with 39% of businesses around the world struggling to recruit the appropriate people. Nearly two in five businesses (37%) in the BRIC (Brazil, Russia, India and China) economies believe an inability to get the right workers will dampen growth in 2013.
 

It has thus become critical to identify the logistics skills requirements in South Africa so that these acute shortages can be addressed to the benefit of trade in and with South Africa and SADC.
 

“We believe the 9th State of Logistics™ survey opens the floor for vigorous discussion between all parties involved to ensure that South Africa curbs its logistics costs as far as possible, while making the best use of opportunities presented, and, in fact, creating its own opportunities,” concludes Viljoen.
 

Click here to view: 9th State of Logistics Survey

Leave a comment


SmartProcurement Newsletter
X

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:
  Position:
* Country:
* Public / Private:

 

Career opportunites

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

Procurement Manager

  • >500 000 Gauteng Permanent Procurement Management Procurement Officer / Specialist
An opportunity for a seasoned Procurement Manager, who ...More

Industrial Engineer

  • >500 000 Gauteng Industrial Engineer Permanent Procurement Consultant
An exciting opportunity that offers extensive exposure on ...More

Deputy Director: Procurement

  • >500 000 Contract Procurement Management Procurement Officer / Specialist Western Cape
Department of Economic Development and Tourism:Procurement Specialist, Ref ...More

DEMAND PLANNING MANAGER

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

GLOBAL SUPPLIER PERFORMANCE MANAGER

  • >500 000 Gauteng Operations, Planning & Inventory Permanent Projects / Category Management
(Salary: R 1.3M –R1.5M, dependent on level of ...More

GLOBAL CATEGORY MANAGER

  • >500 000 Contract Gauteng Procurement Consultant Projects / Category Management
Total Cost to Company R1mil – R1.2mil excluding ...More

Project Manager

  • >500 000 Contract Procurement Management Projects / Category Management Western Cape
 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

  • Commodities Gauteng Permanent Projects / Category Management
 Ensuring continuity of supply in line with business ...More

Senior Facilities Manager

  • >500 000 Commodities Gauteng Operations, Planning & Inventory Permanent
(Total Cost to Company R800K – R900K) Johannesburg Our ...More

ENGINEERING STANDARDS MANAGER

  • <500 000 >500 000 Gauteng Industrial Engineer Permanent Procurement Management
(Total Cost to Company R350K – R550K) JOHANNESBURGYou ...More

Supply Chain Analyst

  • <500 000 >500 000 Permanent Procurement Officer / Specialist Supply Chain Western Cape
(Total Cost to Company R350K – R550K)  SOUTHERN ...More

Security Manager

  • <500 000 >500 000 Gauteng Permanent Projects / Category Management Strategic Sourcing
(Total Cost to Company R350K – R550K) JOHANNESBURG This ...More

Demand Planner

  • <500 000 >500 000 Operations, Planning & Inventory Permanent Projects / Category Management
(Total Cost to Company R450k – R550k, dependent ...More

Procurement Specialist-Randburg

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

Solutions Architect

  • >500 000 Gauteng Industrial Engineer Permanent Projects / Category Management
(Total Cost to Company R1.3Mil – R1.1Mil including ...More

MANUFACTURING MANAGER - OLIFANTSFONTEIN

  • >500 000 Gauteng Permanent Projects / Category Management
(Total Cost to Company R850k – R950K including ...More