Remaining competitive in a volatile and uncertain market will require a new approach to logistics, says Ravi Naicker, KwaZulu-Natal (KZN) warehouse manager for South Africa Cargo Services (SA Cargo Services).“The industry has faced some serious challenges over the past few years,” he told Freight News. “Supply chains have been under pressure to perform amidst the global pandemic while ongoing economic pressures have only exacerbated the situation. At the same time, operational costs have seen steep increases.”All of this, he said, highlighted the need for more transparency and partnerships. “The rising cost of fuel alone has led us to have more transparent conversations with our partners. At the end of the day, our duty as a logistics service provider is to ensure our clients get the best prices while paying particular attention to the overall user experience.”He says now, more than ever before, partnerships are of critical importance.“We have to work together and collaborate in this new environment if we want to remain competitive and sustainable.”According to Naicker, the industry has faced some serious challenges. “Long-term contracts have always been favoured as they allowed companies to plan and strategise accordingly over a period of time. The rise in fuel cost, however, has impacted this. Companies now locked into long-term contracts are heavily affected by these changing costs,” he explained. “It becomes even more challenging as operation costs rise while customer expectations are that agreed contractual rates have to remain.”He said it was also not possible to speak about transport and logistics without bringing up challenges around ports. “Generally speaking the booking system at the ports has been a challenge as it has affected throughput volumes. Historically we have relied on a volume-based model, however, the inefficiencies are forcing us to now emphasise a ‘rate per container’ model instead as it lowers the risk on our side.”With the Durban port surrounded by container depots, it means that a large percentage of transporters wait for anything from four to six hours to pick up empties, do the weigh-ins and complex booking system. The rail sector was also a concern. “Addressing the country’s rail infrastructure is of utmost importance. The dependence on the road for the transport of goods is unsustainable and it is essential that government plans and executes a turnaround strategy.”Naicker said the technology would be the next frontier for the industry, albeit not an overall ‘winner’ like Uber was for passenger transport.“Our sector is in need of an overhaul, but one must not forget that transport and logistics is a complex environment which exists within a larger supply chain sphere. We are making progress slowly but surely.”According to Naicker, there are many opportunities in the logistics sector, including a leaner supply chain. “Cutting out the middleman and going to the source of production or supply is going to be a necessity as costs are predicted to increase even more. This is particularly true for those companies with small f leets.”He said at SA Cargo Services the focus remained on growing the newly launched clearing and forwarding division.
