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Supply Chain Gaps Intensify Warehouse Demand

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Scarcely one year since moving into its 16,152 square metre state-of-the-art warehousing facility in Durban, Rhenus South Africa is expanding its storage space and diversifying its warehouse operations. Its Durban warehouse space has grown by a massive 53 percent in just two years. Increased demand for warehouse space, as well as more service offerings such as the addition of a Special Storage Warehouse (SOS) bond store, are driving strong growth for the global logistics provider.

Strategically and conveniently located within 21 kilometres of King Shaka International Airport and 24 kilometres from Durban Container Terminal, the warehouse includes 1,250 square metres of bulk handling area and 5,823 racked pallet positions. The facility offers a range of solutions, including bond, packing and wrapping, unpacking, cross-docking, as well as fine and batch picking. It is also graded to handle food items.

Kishore Kanayelal, Regional Director at Rhenus South Africa, says that the strong growth over the past year can be attributed to a number of factors.

COVID-19 has disrupted supply chains worldwide, with importers increasing their stock levels to ensure reliable delivery to their clients.

“The exorbitant air freight rates are also having a strong knock-on effect, with some customers opting to save on air freight rates through larger consignments, resulting in higher stock levels,” continues Kanayelal.

Kanayelal adds that another driver in the demand for warehouse space is a growing realisation that outsourcing warehousing can be a cost-effective and efficient solution to stock challenges. “Overheads, labour, security, ASIB compliance, etc. quickly add up,” states Kanayelal. “But through shared costs and our advanced warehouse management system, we are able to offer cost-effective, customised and comprehensive solutions”.

Another imminent development is the approval by SARS of a Special Storage Warehouse (SOS) bond store within the Durban facility. The SOS bond store is specifically licensed for the storage of dutiable imported goods, excise goods, including duty free goods for export (in terms of Section 21 (3) of the Customs Act), as well as imported goods for duty and tax-free outlets. The SOS bond store will bring additional benefits to Rhenus clients, including improved cash flow as a result of deferred Duty and VAT payments, as well as speed to market.

Rhenus South Africa has also seen increased demand for their unpacking and cross-docking services. Kanayelal explains that clients are increasingly looking to get their goods to market quicker, at a reduced cost. Cross-docking means less handling of goods, reduced labour costs and faster delivery times.

Irrespective of what plays out over the coming months, Rhenus is agile and able to tailor-make a solution whether it be high-value vulnerable cargo, food-grade warehousing, e-commerce, or a retail solution. “The growth of our warehousing division is an indicator that our economy is starting to recover – which is good news for everyone!“ concludes Kanayelal.

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Comment on transport aspects addressed by the Minister of Finance during the Medium-Term Budget Policy Statement (MTBPS) 2022

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The Minister of Finance has noted that they will use “higher than anticipated revenues” – which were generated through taxes, levies and all other manner of government revenue generation – to rescue a number of State-Owned Enterprises (SOEs) that are failing, bleeding capital, or are just not doing what they need to be doing.

Whilst we welcome the move to give Transnet badly-needed funding to repair, re-design or re-build vital pieces of infrastructure and equipment (ports, railways and related equipment for efficient operations), there is concern that the “usual suspects” have once again received “bailouts”.

However – “the funding impasse” of the Gauteng Freeway Improvement Plan (GFIP) (commonly referred to as ‘e-tolls’) has had an interesting twist. The Gauteng Provincial Government has agreed to contribute 30% to settling SANRAL’s debt and interest obligations, while national government will cover the remaining 70 %.

Does that mean it’s paid off now? There is no debt? Zip? Nothing? No need for the e-toll system then?

Ahh – but wait! Evidently, “Gauteng will also cover the costs of maintaining the 201 kilometres and associated interchanges of the roads and any additional investment in road will be funded through either the existing electronic toll infrastructure or new toll plazas, or any other revenue source within their area of responsibility.”

There we have it: e-tolls are not going. In fact, there may even be more gantries – or higher vehicle licence fees (in Gauteng only), or some other smart/ingenious way to charge for the “costs of maintaining” – the reference to “any other revenue source within their area of responsibility” being the key statement here.

However, the reality is that those who have not paid and refuse to pay will not suddenly pay now for maintenance. How will government ensure that they pay now? They still owe and government hasn’t tried to collect the default. Why would it suddenly work now (with the possibility of “new toll plazas”)?

Scrap the system ! It’s being “paid off” now anyway. Any new developments get paid cash through the fuel levy system. Stop using the fuel levy for other things  saving other SOEs comes to mind.

Whilst we ponder this one – some good news! It seems like the Minister is beginning to listen to endless comments, lobbying and interaction from the road freight sector:

  • The Economic Regulation of Transport Bill was passed. This should establish an independent transport regulator which will pave the way for greater competition and enable regulated access to the network – as long as private businesses are not punished for being efficient and competitive.
  • We need to understand what the Regulator really means for private business. It’s all fine for ensuring decent pricing in monopoly systems (like public transport systems, Eskom, water supply, etc, landing or berthing facilities in our government operated facilities, ensuring that there are no huge/unrealistic increases in tariffs by any authority in the transport world). But it doesn’t work for private business where competition, innovation and efficiencies are at play.
  • No amount of argument or discussion must ever allow price-fixing/setting within the private (business) sphere.

Then there is better news:

  • Third-party access to the freight rail network is being seriously considered – and perhaps there will actually be movement now.
  • Private-sector partnerships for the Durban Pier 2 and Ngqura container terminals (which the Road Freight Association has been calling for – for at least the last 10 years), is also now on the cards.
  • Allocations to the SAPS to increase capacity to deal with crime.
  • Processes and structures in place to deal with white-collar crime and corruption.
  • Funding for critical infrastructure

However, there are some glaring omissions:

  • Government needs to ensure we can release ourselves from fossil fuel (in this case oil) dependency. Now is the time to support, fund, develop and grow alternative energy systems. Locally developed, manufactured and supported.
  • Use of our great coal resources to implement short to medium term energy solutions. There are very clean and green methods around the world that can be implemented. But our largest resource – sun/solar – needs to be developed and expanded as quickly as possible. This requires funding.
  • Water security – along with food security – will (like the solar development) create the millions of job/employment opportunities that our country needs.

There was a greater expectation (perhaps in the form of a very loud bang) to the end of e-tolls. It didn’t happen. Is there a lesson to be learned from this?

Infrastructure that is of common good to the whole country, the economy, the development of society and upliftment of South Africa, needs to be developed at a cost shared by all South Africans – at the cheapest, least expensive and least intrusive means possible.

There is much potential in this speech – yet there is much we as South Africans require from our leaders in terms of direction. In terms of development. In terms of growth.

By Gavin Kelly – CEO of the Road Freight Association

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David Mashiane from Imperial Logistics Wins #ThankYouTrucker Competition

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David Mashiane, a truck driver at Specialised Freight | Fuel & Gas at Imperial Logistics Africa, has scooped top honours in the 2022 #ThankYouTrucker competition. Luticia Smith from ACT Logistics came second, with Jeffrey Maja from the GEO Group placing third.

“It is our responsibility as drivers to ensure that people are safe on the roads, and competitions such as these inspire us and encourage us to make sure that we do so to the best of our ability,” said Mashiane. “These competitions show us that we are valued. I would like to thank my manager Edward Hoffman, and our HSSE Officer Belinda van der Merwe who nominated me, for their support – it really means a lot. I would also like to thank my colleagues, friends and my community, and especially my supportive wife – I could not do this job without this support system.”

A passionate heavy goods driver who has experience in transporting dangerous goods in a number of countries across Africa, David has maintained an excellent driver’s score card. Since the Drivers score card was introduced at the company a few years ago, David has been receiving above 90% + score every month, with his best score being 98.50%. He has been accident and incident free for the last seven years and serves as a role-model to other drivers. While on the road, David recently saved a little child’s life in Zimbabwe – thanks to his clear thinking, pro-active assessment and defensive driving skills.

Commenting on David’s win, Mark Rylance, Executive Vice President: Road Freight at Imperial’s Logistics Africa business, said: “Warm and heartfelt congratulations to David Mashiane for winning the 2022 #ThankYouTrucker competition! David is a great example to other drivers – his exceptional safety record and his commitment to excellence in serving our clients are a true reflection of everything that Imperial strives to achieve. We are very proud of David and wish him all the best with his career aspirations.”

Luticia Smith from ACT Logistics was delighted with her second place in the competition.  This brave lady continues to excel  in her work – despite battling with breast cancer, requiring intense chemotherapy and an urgent mastectomy. “Truck driving is not easy work, but I love the work that I do,” she says.

“Nothing stops our Luticia,” says Nicolene Kruger, HR Manager at ACT Logistics. “She is a firecracker of a driver. She evokes smiles and friendliness everywhere she goes. She’s a legend, going the extra mile and doing her work with professionalism and finesse!”

Third-placed Jeffrey Maja from GeoGroup has overcome incredible obstacles to achieve success. Despite coming from a disadvantaged background, Jeffrey worked his way up the company ranks and now holds both a code 10 and code 14 driver’s licence. Delighted at coming in the top three of the competition, Jeffrey said: “My mother and my wife were so excited about the news. I really appreciate GeoGroup and the opportunities they have given me. I am always happy at work: my employer is really supportive”.

Deon Bothma, Marketing Manager for the GeoGroup added: “Jeffrey has been with the Group since 2007 and has proven to be such an asset. He is hard working, dedicated, committed and absolutely reliable. His potential was recognised early on and he continues to grow and thrive in the company.”

“Our country’s drivers have incredible stories to tell – and these heartwarming stories demonstrate this,” commented Leanne Sebastian, Communication and Brand Specialist at IVECO SA. “Truck driving is a profession which is often overlooked, unrecognised and unappreciated. Through the #ThankYouTrucker competition we aim to change this, one story at a time!”

“The RFA congratulates all the winners of this year’s competition,” added Gavin Kelly, CEO of the Road Freight Association. “Our truck drivers keep the wheels of our economy turning: we salute their efforts, particularly in these very challenging and disruptive times!”

An initiative of IVECO SA and the Road Freight Association, #ThankYouTrucker recognises, celebrates and rewards the most extraordinary freight driver, a remarkable individual who goes above and beyond the call of duty. This driver is helpful, trustworthy, dependable, caring and passionate about his/her career in trucking.

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Inospace launches a Proptech solution to give logistics and industrial tenants more than space

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24 October, Johannesburg – Inospace, South Africa’s leading owner and operator of serviced logistics parks, is casting off its industrial overalls and leaping into the new tech space with its own technology platform, Inocircle.

“The Inocircle online platform aims to resolve business pain points and add material value to small and medium enterprises (SMEs),” says Jodi Sher, chief marketing & product officer at Inospace.

Already the biggest owner of serviced logistics parks in South Africa, Inospace is positioning itself to be a proptech provider with a war chest aimed at finding solutions to its customer’s logistics pain points.

Months after the announcement of its R1,25 billion deal with Fortress REIT, Sher said the company was aiming to set the gold standard of African CRE management with the adoption of technology and a laser focus on what its customers need.

“Inospace’s tenants are not being kept up at night by what they pay in rent. For every Rand our clients spend on rent, they spend R5 on electricity and R10 on transportation, so our focus has been on creating technology solutions around those areas,” explained Sher.

While it pioneered the development of service logistics parks, Inospace made a quiet entry to the proptech space in 2020, creating its own property management system which initially focused on innovative concepts to manage a large multi-let real estate platform that has short leases and offers flexible terms.

These proptech systems align with Inospace’s increased focus on streamlined efficiencies, cost-reduction and improved decision-making. And now, having grown to 50 logistics parks, the business has the ability to scale up its technology offerings through Inocircle.

The Development of Inocircle

The Inocircle propriety technology platform took time to develop, but now serves as a space-as-a-service by offering useful business tools that go way beyond cost savings and efficiencies.

“We don’t want to be a fast follower, and one of the things we’ve spent a lot of time on is looking for inspiration outside our industry, and then translating it for real estate —making us a first mover in our industry,” says Sher.

Online retail has transformed consumer expectations on service levels and put immense pressure on the logistics sector to figure out how to change the supply chain to meet those expectations. As a warehouse owner and manager, Inospace has been able to leverage its position by looking at problems from its customer’s viewpoint.

“When you take a step back and think about it, there’s no other business in the world where you spend three months negotiating a contract with someone and then ignore them for the next five years – that’s a real constraint on our industry. Which is why, if we can add value using new ways to leverage technology, we are going to change the industry,” says Sher.

“It’s a self-imposed constraint that many property owners put on themselves. As a traditional landlord it’s great having a passive income, but tenants want more than just space these days, and it starts with how we create customer centricity and change the relationship using technology.”

The Inocircle offering

The value of a property is no longer defined solely by the space and its location, but by the blend of technology-enabled service and a superior tenant experience. The Inocircle technology platform is a realisation of that, delivering solutions to some of the most critical challenges facing property managers and tenants.

Today’s property managers are tasked with everything from community relations to rental collections and vendor management. Inocircle helps in this regard, offering property rental tools which manages deals, properties, and lease expirations. It also offers real estate analytics and data which make it possible to assess future risks and opportunities.

On the consumer end, Inocircle incorporates facility management, and offers customised customer-support services. A subscription service will help tenants manage their supply and procurement demands, and access industrial and logistics-related goods and services offered by various vendors at preferential rates.

In addition, clients will create business profiles on Inocircle, allowing them to request maintenance support, and manage their accounts with real-time access to a business directory.

Launch partnerships

For its launch, Inocircle is partnering with vendors including MiWay Insurance and 2Ship, a fully integrated client facing transport management system. Through MiWay, Inocircle will provide new and existing clients with discounted non-life insurance and a range of business insurance products.

The partnership with 2Ship will offer tenants access to an integrated online transport platform. This will allow them to find the most affordable and fastest courier and delivery solutions for any shipment.  The logistics service also provides a seamless integration layer between all the major e-commerce stores and most South African local and international courier companies.

“Inocircle users will be able to track deliveries, receive e-mail updates and pay using an e-wallet, without having to open accounts with various courier companies,” says Sher.

Additionally, through exclusive offers, Inocircle will give its clients access to various support services, ideal for SMEs, including an IT help desk, tender notifications, marketing services, and legal and labour advice.

“By streamlining how we work with our clients through this platform, we are improving efficiencies for our clients and enabling them to focus on the operations and growth of their businesses.” says Sher. 

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