SA’s logistics sector weathering the storm despite challenges

South Africa’s logistics sector seems to be weathering the storm despite challenges, such as the havoc Covid-19 caused, but it is not going to be easy for businesses and consumers. Backlogs and increased shipping rates on an international level and rail transport problems, vandalism and chaos at border posts at a local level will not disappear overnight.

“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,” says Maria du Preez, business development director at Bidvest International Logistics. 

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Logistics sector challenges

She says South Africa has not only experienced the effects of the US, UK and Europe closing their borders.

“The airline industry also moved away from using dedicated freighters, instead choosing to reconfigure fleets which presented challenges in terms of availability of capacity into South Africa.”

The macro trend is even more evident for ocean freight.

“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.” 

Du Preez points out that negotiating Transnet’s low productivity numbers and decades-long maintenance issues remain problematic at local level and now some new challenges also have to be tackled, such as Durban now experiencing strong winds normally associated with Coega and Cape Town and Transnet’s new truck booking system that is not working effectively.

“The fact that rail remains a huge problem means that cargo cannot be moved by rail, leading to a backlog of trucks in ports. Vandalism, particularly on the Durban to Johannesburg and Pretoria to Cape Town rail networks is also a challenge.”

Another challenge that was evident over the past year was the backlog at South Africa’s borders where trucks were 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.”

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Positive developments for logistics sector

Du Preez says on the positive side, these problems are receiving high-level attention from government, industry bodies and other role players. 

She says it is important to note that demand for goods remains high despite the impact of the pandemic and clients have reported that even unusual commodities are selling out as soon as they arrive.  

“This is one of the reasons why South Africa can simply not afford truckers blocking the highways. Protests against foreign drivers operating on our roads not only open the way for retaliatory protests in their own countries, but these operators offer cheaper rates, thereby benefiting our consumers.”

Another positive aspect of Covid-19 was that logistics companies learned how important data is in the industry.

“The South African Association of Freight Forwarders has started to gather a lot more data which has resulted in us cooperating with each other to share information 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.”

Data has become absolutely crucial because it enables logistics companies to work effectively with the department of transport or Sars and other governmental organisations to, for example, identify port health and establish how long it takes between the ship docking and the time cargo is released.