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Goscor Lift Truck Company (GLTC) has been awarded the coveted SPAR Group’s Supplier of the Year accolade for 2021.

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The award coincides with the 20th anniversary of GLTC’s partnership with SPAR group. The leading materials handling equipment solutions provider currently has over 1,000 units deployed across SPAR’s distribution centres in South Africa, including forklifts, reach trucks, order pickers and power pallet trucks.

GLTC is the sole distributor of leading materials handling brands including Crown, Doosan, Bendi, Sunlight lead acid batteries and DEC tow tractors in southern Africa, allowing the company to offer a full basket of materials handling equipment and warehousing solutions to the market.

Michael Keats, Director at GLTC, says a partnership mentality has been central to the longevity of the relationship between the two companies. Apart from reliable and efficient equipment, GLTC focuses on offering an unparalleled service regime to the retail group, ensuring high equipment availability and uptime. This includes on-site support and technical staff in KwaZulu-Natal and Nelspruit, with service support teams in all the other regions.

This is the second time that GLTC has taken home SPAR’s Supplier of the Year award, having previously clinched it in 2016. “We are very proud to be in partnership with SPAR and to have received this award for the second time. The service quality matrix that SPAR uses to measure its Supplier of the Year, and the fact that we are being pegged against many other key service providers to its distribution centres, is a great gauge for best practice in our industry. To come out on top is a great accomplishment. We plan to sustain these service levels and develop upon them. The open communication between us and the customer allows us to critically evaluate our service level offering and assists us to keep improving as we grow together,” says Keats.

“We are proud to have GLTC as one of our key suppliers and look forward to an ongoing partnership and future technological advances where we can push the efficiency boundaries within our operations,” adds Ruark du Preez, SPAR Group Fleet Optimisation Manager.

“GLTC has been an integral partner in the success of SPAR’s operational efficiencies, and we are honoured to have them as a supplier. We look forward to the successful continuation of this long-standing business relationship into the future,” concludes Solly Engelbrecht, SPAR Group Logistics Executive.

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Beyond the distribution centre is the last mile centre

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The global retail industry is undergoing a revolution. The retail supply chains of today, traditionally consisting of large distribution centres (DCs) will have had to shift to accommodate a reimagined customer with much greater expectations.

Long before the Covid pandemic began, DCs were being built in major South African cities to deliver products to retail stores where customers shopped. This often meant big box warehousing with well over 100 000 square metres to provide warehouse space for retailers such as Shoprite, Woolworths, Foschini and Dischem where they could stock sufficient inventory to meet surging customer demand. In a world of increased online shopping and disrupted supply chains and delivery times, many DCs are filled to the brim and some are running out of space. The question of whether this is a cyclical trend or a structural trend is perplexing warehouse owners.

A recent announcement by the online retail giant, Amazon, that it has too many sheds after doubling its warehouse space during the pandemic has prompted a challenging new reality, hand wringing and sharp reaction from investors. When Amazon informed the market that it intends to reduce its footprint of leased industrial space by as much as 3 million square metres, the share prices of many logistics warehouse owners tanked.  For many real estate investors, the question is whether Amazon is the only user with excess warehouse needs in the current environment?

Another trend that distribution centre owners need to deal with is an environment where a higher prevalence of e-commerce shopping, higher customer expectations regarding delivery speed, and the delivery of goods to end-user consumers are forming part of complex logistics challenges far beyond what central DCs are currently set up to deliver on their own.

Retailers are increasingly thinking outside the (big) box to reimagine supply chains that can serve customers directly and rapidly. This means new models for retail-fulfilment operations that include using space within shops and smaller last-mile delivery depots in the neighbourhood. In the US  real estate logistics suppliers are changing their logistics strategies to follow end-user online consumer demand. suit. For example, logistics real estate giant Prologis’s offer to acquire a portfolio of more than 1 700 last-mile logistics warehouses held by Blackstone’s Mileway for $23.1 billion is a shift in strategy to own the full logistics real estate ecosystem.

Logistics in a South African context

In South Africa, where e-commerce has also boomed since the Covid-19 lockdown period, many retailers have used their existing retail locations to build operations that serve omnichannel customers better. But using current retail space as mini-DCs comes with the high cost of retail rental space and far higher operating costs than warehousing. This is often the only option because this space allows retailers to remain closer to customers demanding decreased delivery time at a lower price.

Although there is a wide spectrum of operating models that retailers can choose from to build fulfilment capability in-store, for example, repurposing the back-of-house or dedicating space to house a packing and shipping room with lean operations, the challenge for retailers using their stores as mini DCs is that they need to keep a lot more products in-store to fulfil the customer’s need for immediate delivery. This means retailers must be able to analyse market data to improve forecasts for stock keeping units (SKUs) with strong omnichannel demand, be able to determine the optimal cadence for replenishing products to mitigate the need to redirect inventory at the end of a life cycle and build rules to route customer orders to optimal store nodes.

Other challenges include hiring more staff for in-store fulfilment with specific fulfilment-focused profiles or automation experience and major adjustments to the store’s operating hours based on a revised fulfilment model. Fulfilment from the sales floor occurs during business hours and has the added benefit of having more associates present to interact with customers during busy periods. An expanded mini-DC operation may require extended operating hours (for example, 16 to 24 hours) depending on the volume of orders being filled.

The rise of last-mile fulfilment

For retailers that cannot meet the requirements to set up an in-store fulfilment operation, there is a pressing need to move beyond the four walls of retail stores and find solutions that allow them to continue operating in today’s retail landscape. This is where last-mile real estate comes into play.

Last-mile delivery real estate has become increasingly important since the pandemic’s start due to the explosion in e-commerce resulting in the exponential growth of business-to-consumer (B2C) deliveries.

Although pandemic booms have slowed down across the economy, including sectors such as food delivery and fintech, corporate scepticism around the need for more large DCs is growing and major retailers are considering whether they overestimated how quickly their first-mile warehouse needs will increase. This is a bad combination for big-box warehouse shares. Prologis shares have been down about 37% since late April, and they fell another 8% recently.

According to the Wall Street Journal, Ikea, the Swedish furniture giant is doubling down on its fulfilment capabilities by investing over $3 billion to revamp the company. This overhaul will include transitioning up to 40% of its existing big-box suburban locations into smaller last-mile distribution centres for online orders. By redistributing how their space is utilised, the company hopes to optimize their real estate portfolio and bolster their delivery capabilities instead of increasing the footprint of existing stores.

The last mile of the delivery chain is proving to be the most valuable one for industrial properties. Facilities that can accommodate the ever-evolving demand of retailers for much quicker deliveries are proving to be the downfall of the big-box warehouse and opening new doors of opportunity for reimagined last-mile logistics solutions.

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Update: Trucking Industry Task Team meeting

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The Road Freight Association (RFA) agrees with, and supports, the implementation plan published today.

The RFA has been part of the Ministerial Task Team since its very inception and its first meeting in KwaZulu-Natal (KZN).

It has also attended all the later Task Team meetings run by the Department of Transport – with the exception of one in April 2022.

The compliance of employers in the transport sector with all regulatory requirements, is non-negotiable. There are both companies and so-called representative organisations within the road freight sector who refuse to comply with the basic requirements of the Labour Relations Act (LRA) or the Main Agreement within the sector.

The idea that a private institution can create a government agency to “regulate” the freight industry is unacceptable.

The idea to bring back the archaic route and distance “operator licences” that existed before the “deregulation of road freight” in the 1980s, and propose the  implementation of a taxi industry style operator licence – shows both a total lack of understanding of how freight and logistics sector operates, as well as a hidden attempt to capture the industry. The various authorities that are responsible for registration and regulation of operators in the sector are mandated and empowered to perform these functions – without the need to further burden the citizenry with another expensive yet ineffective agency.

The RFA supports all efforts to stop the disruption of the logistics chain. The root causes have been identified, and the proposed implementation plan clearly identifies who, what, when and how these causes must be addressed (and resolved).

Again, the RFA calls on the various authorities tasked with registration, confirmation of compliance and the monitoring of adherence to the conditions of employment prescribed for the road freight sector,  to apply themselves urgently to their tasks. This will resolve the base causes for the protests by the All Truck Drivers Forum and Allied South Africa (ATDF-SA) and the employment of illegal (without work visas) foreigners.

By Gavin Kelly – Chief Executive Officer: The Road Freight Association

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Environment, Social and Governance (ESG) under the spotlight at CILTSA event

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Environment, Social and Governance (ESG) is about far more than just ticking boxes. It is an initiative to build credibility, foster investment and enable effective monitoring and disclosure of performance. ESG criteria are a set of standards for a company’s behaviour used by socially conscious investors to screen potential investments. The transport, logistics and supply chain industries are particularly impacted by ESG and are under increasing pressure to create tangible and sustained outcomes that drive value and growth, whilst strengthening the environment and communities.

With this in mind, the Chartered Institute of Logistics and Transport: South Africa (CILTSA) is organising a half-day event for the industry titled: “Demystifying the ESG landscape for people in logistics, transport and supply chain” on Thursday 21 July at the Imperial Wanderers Stadium in Illovo, Johannesburg.

“Over 90% of companies’ carbon footprint is located in the supply chain, with almost 30% of this emanating from transport and logistics,” explains Elvin Harris CMILT, President of CILTSA. “Our sector therefore has a lot of work to do to explore, implement and drive sustainability programmes.”

However, there are many more aspects to ESG than greenhouse gas (GHG) emissions and this is exemplified in the transport sector. As well as being critical to economic growth, transport systems carry risks of local environmental and social impacts. They are also more susceptible to poor governance and corruption than other sectors; perhaps more so because of the public private partnerships.

“The economic pressure the COVID-19 pandemic has placed on some industries has affected companies’ exposure to ESG risks and their ability to manage them,” continues Harris. “Companies face rising complexities and greater scrutiny if they are not adequately managing their ESG or climate risk. Investors are increasingly applying these non-financial factors as part of their analysis process to identify material risks and growth opportunities.”

ESG is not just about climate change and good intentions alone. It is a practical plan embedding these principles to create sustainability. The aims of the CILTSA event are to demystify the ESG landscape; share the ESG journeys of industry leaders; create a platform for the industry develop a better understanding of ESG; and showcase solutions/products/services are out there to assist them in their ESG journey .

The speaker line-up includes

  • Shameela Ebrahim – Chief Sustainability Officer: JSE
  • Esha Mansingh – Executive Vice President: Corporate Affairs & Investor Relations: Imperial
  • Feroz Koor – Group Head of Sustainability: Woolworths Holdings Limited
  • Julia Rosa – Value Shaper at 8Hundred
  • Lauren Rota – Vice President Environmental, Social and Governance: Imperial

Registration fees are R600 for members and R750 for non-members. Members of the Road Freight Association (RFA), the SA Express Parcel Association (SAEPA) and the SA Association of Freight Forwarders (SAAFF) qualify for member rates. qualify for a discount to attend the event. To register for the event, visit https://ciltsa.org.za/esg-landscape-event-registration

The event is sponsored by Imperial, Ctrack and Global Dominium Services and Institute.

For sponsorship opportunities, contact Catherine at 083 300 0331 or email [email protected]

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