The state of logistics in South Africa - perspectives from research

Abstract

Paper presented at the 28th Annual Southern African Transport Conference 6 - 9 July 2009 "Sustainable Transport", CSIR International Convention Centre, Pretoria, South Africa.

The purpose of this research was to measure the cost of Logistics In South Africa, determine the major cost drivers and assist both the country to manage those drivers and logist clans to manage logistics in this context. The measurement is on an industry and national level and can therefore relate logistics Input with GDP as well as with industry-level turnover. A quantitative approach, based on a gravity-orientated freight flow model, road transport cost model, real transport costs for other modes, warehousing cost survey and inventory delay calculation for the economy, is followed.The overarching outcome is logistics cost measurement in an extended and detailed model, backdated for five years to establish trends and cost drivers. This leads to specific items that can be considered by industry and managed by government. In the recent past the sensitivity of logistics costs to fuel and interest rates is disconcerting as both items are "administered costs on an industry level and even on a national level for economies relying on imported fuel to move freight over long transport distances.Logisticians manage inventory delay downward relentlessly, but the "Tragedy of the Commons"-effect is overlooked and trade-offs on a national and even industry level often not managed effectively. In contrast, collaboration does not only contribute to micro improvements, but could counter negative trends on a macro level. Eventually the tradeoffs between specialisation, growth and sustainability come into play. The relationship between energy optimisation and environmental consciousness is also illustrated and solutions suggested.