Logistics costs in South Africa bound to rise

Logistics costs in South Africa are forecast to rise to up to 470 billion Rand (€ 34.4 billion) in 2014, according to the 10th State of Logistics survey published by the Council for Scientific and Industrial Research (CSIR). In 2012, logistics costs in South Africa were around 423 billion Rand.

A deeper investigation of individual cost components and cost drivers shows that the increase in logistics costs is perhaps not so much the result of deteriorating efficiency in the industry but the disproportionate growth in cost drivers – especially fuel. In fact, logistics costs as a percentage of GDP remained at a stable level of 12.5 per cent for 2011 to 2013, with the slight increase in 2014 depending on the magnitude of fuel inflation.

The survey also reportz that South African supply chains have moved beyond ‘survival mode’ to an ‘optimised mode’ where costs, inventories and lead times have been minimised within individual supply chain functions.

Smart Trucks, a product of the performance-based standards (PBS) initiative driven in South Africa by CSIR, is a road transport project that holds great promise for increasing transport efficiency in tandem with modal shift imperatives. Demonstration projects have shown average improvements in fuel efficiencies of 14 per cent along with a drastic reduction in road wear and larger payloads, which result in fewer trips.

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