"The first survey created huge interest; there is no doubt that this new survey will be received with as much interest by those involved in this very important area," says Hans Ittmann, manager of Logistics, CSIR Built Environment. He says it is envisaged that this survey will become the premier reference for logistics in South Africa.
As a percentage of the GDP, total logistics costs remained flat at 15.2% of the GDP. (The figure for 2003 was adjusted to 15.2% following the Reserve Bank's upward adjustment of the GDP and further refinements to the model, including a more comprehensive assessment of port charges.)
"This figure is high compared to that of our trading partners such as the USA, where the logistics costs were 8.6% of the GDP for 2004," says Jan Havenga of Stellenbosch University. Transport costs are rising globally, but unfortunately South Africa has a more transport intensive economy than the rest of the world, caused by poor spatial planning. "This spatial problem is exacerbated by chronic underinvestment in transport infrastructure, an unsustainable modal structure and inefficient service levels," comments Havenga. He indicates that there are concerted efforts to correct the situation, although the impact of this will take time.
The research for the survey was conducted by experts at CSIR Built Environment and Stellenbosch University Business School.
In addition to the macro-economic issues, the 2005 State of Logistics Survey addressed supply chain challenges and innovations of the chemicals, processed foods and logistics service provider industries. The results of the survey furthermore provide an overview of the National Health Care System, where the need for inventory management is identified as the key challenge. An analysis of selected supply chain cost elements shows that distribution costs in the government pharmaceuticals supply chain are relatively small at 0.8% of total sales, while the chain carries pharmaceutical inventory that amounts to 12.9% of total sales.
The survey also highlighted the need for expanding small business support initiatives to include all the aspects involved in establishing channels to market and developing supply-chains.
"The first State of Logistics Survey emphasised the need for measurement and revitalisation of basic infrastructure in South Africa's dual economy. The process of addressing these needs has started with the release of the National Freight Logistics Strategy, which is truly a milestone in enabling an efficient transport and logistics infrastructure to support economic growth," explains Ittmann.
"In order to implement the National Freight Logistics Strategy, it will have to be translated into development projects and appropriate champions for delivery will have to be identified," he comments. "We also need to develop a national transport and logistics database to measure delivery, its impact, and to direct investment."
South Africa's 2004 production and import tonnage increased by 7.4% on the 2003 volumes. The gap between road and rail corridor freight transport has widened even further during the past year, compounding the structural inefficiency in the South African economy. Fortunately, the declines experienced by rail from 1997 to 2003 have been halted, with rail maintaining similar tonnage levels over the past two years. However, the challenge facing the economy remains that while rail focuses on reversing historic trends, growth in tonnage available for transport is still captured by road.
The structural changes required and indicated for developmental logistics are still South Africa¿s biggest challenge. Efficient long haul corridors are required, alongside a focus on greater access for the second economy through focussed investments.
"Collaboration between the various role players, including government, rail, road, industry and other service providers, is key to success in the logistics arena," says Ittmann.
"Improved performance of the national logistics system is rooted in research that considers a variety of perspectives, ranging from a macroeconomic view to the reduction of the logistics divide between the first and second economy. We believe that research should focus on the structural inefficiencies in the logistics system; logistics modelling; strategies for improved supply chain efficiency and for reducing the logistics divide; and logistics for improved government service delivery," concludes Ittmann.