SA’s logistics sector is weathering the storm despite myriad challenges
By Maria du Preez, Business Development Director at Bidvest International Logistics
There is no doubt that Covid-19 has caused all kinds of havoc in the logistics sector.
We are still facing enormous backlogs, not just in South Africa but globally. Cargo and containers continue to be held up in America as well as the UK, which is also burdened by a shortage of truck drivers as a consequence of Brexit.
Not only have we felt the effects of the US, UK and Europe closing their borders, but the airline industry has also moved away from having dedicated freighters, choosing instead to reconfigure fleets. This has presented challenges in terms of availability of capacity into South Africa.
The macro trend is even more evident on the ocean freight side. It would be fair to say the shipping lines have made the most of current circumstances by increasing rates by as much as 400% in some cases. Unfortunately, the airline industry is starting to follow suit in this regard.
The truth is it’s not going to be easy for South African businesses and consumers.
At Bidvest International Logistics (BIL), we are determined to supply our clients with as much information as possible about these global trends to help them plan, though the coronavirus remains highly unpredictable and even the best-laid plans will require adjustments.
While we have seen some gradual improvements recently, the supply chain situation is still nowhere near where it’s supposed to be.
At the local level, negotiating Transnet’s low productivity numbers and decades-long maintenance issues remain problematic, though some new challenges have also arisen. For one, Durban is now experiencing strong winds that you would normally only associate with Coega and Cape Town. For another, Transnet recently introduced a new truck booking system that is still not working effectively.
Rail also remains a huge problem in South Africa. Not being able to move your cargo by rail means there is a backlog of trucks in the ports. Another obstacle is vandalism, particularly on the Durban to Johannesburg and Pretoria to Cape Town rail networks.
In the past year, our industry has also faced a horrific situation on South Africa’s borders where trucks have been backed up for kilometres. Thankfully the chaos at the Beitbridge border was eventually remedied, but now problems have developed on the border between South Africa and Mozambique.
On the plus side, this is getting high-level attention from the government, industry bodies and other role players and, in fact, the same role players who sorted out the Beitbridge backlog are on the case here as well.
What is important to note is that demand for goods remains high despite the impact of the pandemic. By no means has it come to a standstill. Our clients have reported that even unusual commodities are selling out as soon as they arrive.
It is one of the reasons why South Africa can simply ill-afford truckers blocking the highways. Not only do the protests against foreign drivers operating on our roads open the way for retaliatory protests in their own countries, but these operators offer cheaper rates, thereby benefiting our consumers.
Particularly in light of the African Continental Free Trade Area, it’s not simply a matter of trading goods; you are also trading services, and transport is very much a part of the trade in services.
While we understand that we should preserve jobs in South Africa, we need to look at the bigger picture.
It may sound strange to suggest some good has come out of Covid-19, it cannot be denied that we have learnt so much about the importance of data in our industry.
Since the outbreak, the South African Association of Freight Forwarders has started to accumulate a lot more data, which has resulted in us cooperating with each other to share information.
It has allowed us to compile and issue reports on a range of aspects, such as cargo, what’s happening in the global market and on the oceans, the availability of capacity, the volume of containers coming in or out, airfreight volumes and exports, and domestic airfreight.
If you have data you can work effectively with the department of transport or Sars and other governmental organisations. For example, you can identify port health, establishing how long it takes between the ship docking and the time it’s released.
Data has become absolutely crucial.
This is why it is so important that we embrace technology and learn how to live with it. In the future, we will need technology-based skills, as there will be a lot more focus on global standards. The world is once more looking at Africa as a potential growth market, so we need to be on top of our game.
Conference Highlights Opportunities for the Air Cargo Industry on the Continent
The air cargo industry has a key role to play in helping drive economic growth in Africa. There are also tremendous opportunities that it can leverage, through the Africa Continental Free Trade Area (AfCFTA). These opportunities were explored at the Chartered Institute of Logistics and Transport’s Air Cargo Conference, held at the Air Cargo Africa expo and conference at Emperors Palace, Gauteng, on 23 February 2023.
The Programme included:
- Increasing connectivity and the movement of air cargo across the region by Dr Joachim Vermooten – Owner: Vermooten and Associates
- What is needed for AfCFA to work and what is the impact of AfCFTA on the supply chain? by Devlyn Naidoo – Executive: SARS and Other Government Agencies (OGAs): the SA Association of Freight Forwarders
- Potential and possibilities on the Continent: Airlink Cargo’s perspective by Hardus Kuschke – Executive Manager, Cargo: Airlink Cargo
- Data Driven Decisions Enabled by Digital Transformation by Munya Husvu, CEO: ISB Optimus
- The role technology will be playing within the African cargo space in the next decade vs. the African unemployment challenge by Gerhard van Zyl – AsimoTech
- Video telematics and the use of Artificial Intelligence by Divan Delport – Sales Director – MiX Telematics East Africa
- Trade opportunities in Africa for South African business by Thina Nodada – Director: Waymaker Trade Solutions
- Changes to Dangerous Goods Regulations for Air Cargo by Elliot Molemi – General Manager, Compliance: Professional Aviation Services
Key takeaways from the event
Increasing connectivity and the movement of air cargo across the region by Dr Joachim Vermooten – Owner: Vermooten and Associates
“AfCTA creates a new basis on which African air transport liberalisation can be based, with the objective of creating an internal integrated air transport market, instead of a small step “piecemeal” approach based on arrangements between individual States.”
“The African Continental Free Trade Area (AfCTA) provides a new opportunity to re-start African air transport liberalisation with the objective to actually achieve a truly internal single African air transport market. This is in contrast to the current Single African Air Transport Market (SAATM), which only seeks to implement the Yamoussoukro Declaration of 1988 (35 years ago) still based on Bi-lateral Air Service Agreements (BASAs) between States, of which the implementation is inadequate.”
Potential and possibilities on the Continent: Airlink Cargo’s perspective by Hardus Kuschke – Executive Manager, Cargo: Airlink Cargo
“There is endless potential for growth in Africa – due to the increase in demand. Aviation traffic is predicted to more than double by 2037. The boom in the movement of cargo will accelerate development. Cargo yields are declining at the moment, but are still higher than pre-Covid levels.”
“There is endless potential for growth in Africa:
- There are freighter operations to main hubs, but there is a need for connectivity to smaller hubs.
- E-commerce is underdeveloped.
- Africa’s annual economic growth remains strong.
- The need for bonded transport continues to grow.”
“There are however some limitations:
- Frustrations: Support functions from an airline’s perspective, like reliable port and rail infrastructure for jet fuel.
- Challenges: Inconsistent authorities, border control processes, corruption and competitiveness. Some IT systems are incapable of integration.
- Security: Security standards are poor in some countries.”
What is needed for AfCFA to work and what is the impact of AfCFTA on the supply chain? by Devlyn Naidoo – Executive: SARS and Other Government Agencies (OGAs): the SA Association of Freight Forwarders
“What is required for AfCFTA to work and how do we make it work?
- Overcoming supply-side constraints to boost African trade.
- Closing the infrastructure deficit to boost AfCFTA’s development impact.
- Eliminating non-tariff barriers to increase cross-border trade.
- Establish inter-governmental international trade department support.”
“Equally important to the elimination of tariff barriers (Free Trade Area) is the elimination of non-tariff barriers and the creation of an intact continental logistics network to support the growth of intra-Africa trade.”
“Supply chains are dependent on an efficient logistics network. This includes, inter alia, efficient port infrastructure, road and rail networks, a secure and safe trading environment and efficient customs and other government agency compliance processes and procedures.”
“Skills development and capacity building for a young supply chain are key.”
Data Driven Decisions Enabled by Digital Transformation by Munya Husvu, CEO: ISB Optimus
“We see a world where every employee will work side by side with digital workers. When human and digital workers work side by side, amazing things happen! It creates a world of endless possibilities!”
“To be a digital enterprise, you need digitized processes – and a digital workforce that complements your human workforce. ‘Complement’ is an important word, because despite concerns about AI, automation, and Robotic Process Automation (RPA) eliminating jobs, we believe very strongly that digital workers should complement the strengths of people.”
“Digital workers transcend RPA: Their core attributes are bots that are intelligent, using AI to learn and improve over time; they use analytics to ensure that their work is effective; and finally, they are capable of discovering processes that can benefit from their help.
People’s core attributes feature creativity, connecting dots, building strong relationships, and having empathy and compassion for others. For people, this manifests in driving strong customer engagement, identifying opportunities, whether that be a new sales opportunity or business model. We also strive at problem solving -arguably one of our best skills.”
The role technology will be playing within the African cargo space in the next decade vs. the African unemployment challenge by Gerhard van Zyl – AsimoTech
“On the one hand, we face the African unemployment challenge. The unemployment rate in Africa (estimated) 2022 was estimated at 8%, which means 41,9 million are without work.
On the other hand, we perceive the opportunities available through technology-led productivity. Since we compete with the rest of the world, we need to keep abreast of global developments in areas such as autonomous vehicles (drones), Artificial Intelligence, augmented reality, object and image recognition and other breakthroughs.
Thus, our logistics industry needs to maintain a balance between people skills and automation in the workplace. This calls for a commitment to a spectrum of skills development that fuses traditional methods with innovation and even quantum-leaps.”
“By lowering standards education, we are not doing our youth any favours.”
Video telematics and the use of Artificial Intelligence by Divan Delport – Sales Director – MiX Telematics East Africa
“Artificial Intelligence (AI) in video telematics has transformed the way we manage and monitor vehicle fleets by improving safety, enhancing efficiency, reducing costs, and providing real-time insights. AI-powered systems can monitor driver behaviour, optimise routes, reduce idle time, and improve productivity. This technology provides real-time insights into driver behaviour and vehicle performance, enabling fleet managers to respond quickly to issues as they arise. As the technology advances, we can expect even more benefits and applications in the future.”
Trade opportunities in Africa for South African business by Thina Nodada – Director: Waymaker Trade Solutions
“South Africa could position itself as a brains-trust country for skills development across the rest of the continent as momentum picks up for the realisation of trade under the AfCFTA.”
“What we’ve seen is that there is a strong emphasis on skills and knowledge development from African countries to partner with South Africa in achieving these aims. “If South Africa got its act together, a lot of goodwill could be invested through the transference of goods, services, skills and knowledge needed to achieve AfCFTA’s aim of boosting trade across the Continent by at least 52.3%. It would take a bit of a mind-shift though, as South Africa still sees itself in different terms in relation to the rest of the Continent.”
“We must stop thinking of ourselves as the gateway to the Continent. We aren’t the gateway to Africa, never have been, and never will be. What we can be is an enabler of trade improvement.”
Changes to Dangerous Goods Regulations for Air Cargo by Elliot Molemi – General Manager, Compliance: Professional Aviation Services
“The new dangerous goods regulations have undergone a rigorous Carcom (Civil Aviation Regulations Committee) process and are awaiting the Transport’s Minister signature. The express parcel industry has over the years seen the introduction of drop-off facilities, enabling customers to drop off parcels, with little inconvenience. Examples of these facilities include Aramex’s Drop Box, Courier Guy’s PUDO and DSV’s Locker, which are stationed at shopping complexes and filling stations.
These products of convenience have come with their own problems. Customers are likely to include hazardous items like lithium batteries, corrosives and flammable liquids – out of ignorance. The SACAA has come up with a set of regulations that seeks to minimise such incidents. The regulations when summarised will require a company offering the parcel drop-off facilities to educate their users on the dangerous goods. This will be done by:
- Requiring that the user declares if their package contains dangerous goods or not.
- Providing information about dangerous goods to the user through the website or other electronic forms.
- Displaying dangerous goods prohibition messages and other signages at drop off facilities.
These regulations extend to other courier products at shopping malls like Postnet and Pepkor’s Paxi – if their parcels end up in an aircraft.”
The CILTSA Air Cargo Conference was sponsored by Air Cargo Africa, AsimoTech, ISB Optimus, Messe Munchen, MiX Telematics and Professional Risk.
The Chartered Institute of Logistics and Transport supports the professionals who plan the systems, who bring in the raw materials, who manage the movement of people and goods, who ensure safety standards, maintain mobility, and keep the economy working.
We are the leading professional body for everyone who works in supply chain, logistics and transport. We are a global family, representing professionals at all levels across all sectors, with a mission to give individuals and organisations access to the tools, the knowledge and the connections vital to success in the logistics and transport industry.
Founded in 1919 with a mission to improve industry practices and nurture talent, our Institute supports over 35,000 members in 35 countries. Through our educational suite, our strong community and our commitment to high standards, we help professionals at all levels to develop their careers and access better jobs. Visit www.ciltsa.org.za and https://ciltinternational.org/ for more information
Contact Persons: Catherine Larkin – CVLC Communication
Telephone: 087 822 2858 / 083 300 0331
E-mail: [email protected]
Postal Address: P O Box 44945, Linden, 2104, South Africa
Comment on transport aspects addressed by the Minister of Finance
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
David Mashiane from Imperial Logistics Wins #ThankYouTrucker Competition
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.