Key trends in Africa’s logistics industry

Gauteng, November 13, 2014 (STAT):-Multiparty operations, factory gate collections, intermodal solutions, road safety and compliance issues are among the key trends currently shaping the South African logistics industry, according to Cobus Rossouw, chief business development officer at Imperial Logistics.

“The trend towards the outsourcing of logistics is continuing in transport, storage, distribution and operations planning,” he states, and contends that key drivers of this trend are the benefits of multiparty scaled operations, the specialisation and complexity associated with integrated supply chain management and the increasing skills shortage within organisations. “Companies are increasingly acknowledging that they do not have the core competencies in-house to efficiently handle their own logistics and supply chain needs. We have experienced a growing demand from our clients for Imperial Logistics to manage their warehouses, for example, as they recognise that by outsourcing this specialised function, they can devote themselves to their core business.”

In an increasingly global marketplace, with complex supply chains and logistics challenges, a supply chain partner that can plan and execute logistics, and that offers the scale and expertise that most companies lack, can add enormous value, he stresses. “The benefits of a multiparty scaled operation are reflected in Imperial Retail Logistics’ successful business model, which sees clients clustered together to boost logistics efficiency and bring costs down by capitalising on economies of scale, co-loading and the optimal utilisation of warehouse space and resources”, Rossouw notes.

Confectionary is one focus area for the company, and an impressive range of principals are benefiting from Imperial’s investment in the specialised skills and resources to succeed in this testing sector. A total refrigerated solution is now offered throughout the supply chain when working with chocolate. Warehousing has likewise been tailored to meet confectionary clients’ requirements. Upskilling its existing staff - to ensure that everyone understands the product’s heat sensitivity and fragility - has also contributed to Imperial’s increasingly sweet success in the confectionary market.

While the outsourcing trend continues to gain momentum, Rossouw notes, however, that there is still plenty of room for growth in this business. He reveals that, according to the latest State of Logistics Survey, at least 50% of logistics in South Africa is still managed in-house. “With our ongoing investment in world class people, skills, systems and technologies, Imperial is well placed to grow its share of the outsourced logistics market.”

Another trend that is impacting the industry, and with which Imperial has aligned its strategy, is greater consolidation in the retail supply chainand increased rationalisation of capacity among logistics service providers. Rossouw elaborates: “In parallel, there has been convergence in supply chain and logistics execution, which depends on specialised expertise and capabilities to address appropriate underlying cost drivers.

A burgeoning focus on road safety and compliance is also changing the logistics landscape, he asserts. Clients are increasingly demanding greener, safer transport solutions. Through its “IPledge” campaign, Imperial Logistics is striving to improve road safety. Imperial employs technology which monitors vehicle and driver performance and is lowering fuel consumption, reducing vehicle down time and boosting road safety. With the cost pressure on logistics, Rossouw believes that there will always be a place in the market for lower cost, less sophisticated logistics providers, but he stresses that companies aiming to lead the industry must shape up in terms of safety and sustainability.

Environmental issues - along with road congestion and South Africa’s high logistics costs - are also driving another trend: the expansion of intermodal logistics. While the intermodal capabilities in South Africa requires investment by all stakeholders, it will become increasingly important in reducing road congestion and greenhouse gas emissions, and in lowering transport costs. Rossouw contends that logistics leaders not thinking about intermodal may find themselves derailed in the long term.