Woolworths contract provides sturdy base for new logistics major

There’s a new brand on the SA
logistics scene – Allport Cargo
Services – but it comes with
an established pedigree that helped to
clinch an international supply chain
contract with major retailer Woolworths.
Set up in January last year, the
first year has been about establishing
the business and bedding down the
processes. The year ahead will be about
growth, Cape Town-based managing
director Patrick Duffy told FTW.
“Partners in the joint venture –
Allport Limited (UK) and Cargo
Services Far East Limited (Hong Kong)
– are well-known brands in several
major markets, servicing nine of the top
20 UK high street retailers and three of
its top four supermarkets,” said Duffy.
“The local office was set up primarily
to service Woolworths, looking after
the retailer’s international supply chain
from China, India and niche markets
like Bangladesh, Mauritius/Madagascar,
Vietnam and Bangkok.”
According to Duffy, Hong Kongbased
Cargo Services is a significant
player in the Asian market, employing
over 1 700 people in 28 offices
throughout the region.
“This was a big advantage for us –
that all facilities are owned whereas
several competitors tend to use agents
in the region.
“We also scored well on the solutions
side,” he added.
“It’s a very sourcing-focused
system, – based on the end to end
purchase order critical path and not
purely freight – it’s not simply a freight
tracking system. Our critical path
process manages the purchase order
and all the upstream activities like PO
confirmation, currency purchasing,
production and quality approval issues,
consolidation planning and the like.”
Duffy believes that it is this level of
visibility that facilitates better planning.
“Consolidations are over 30%, which
is a huge improvement on where
they were, and container utilisations
are around 89%, which generates
significant savings and efficiencies.”
Because of the size of the
organisation, the customer also benefits
from its bulk buying power. “In total,
the network moves 250 000 teus a year.
“We have implemented a direct
carrier arrangement with Woolworths
which means that we negotiate the
carriage on their behalf with no markup
– we’re not in the game of earning
revenue from freight.”
According to Duffy, the costs to
Woolworths are down from around 17%
to 8% of FOB – although he points out
that part of that is attributable to lower
freight rates so Allport Cargo Services
can’t take all the credit.
And while Woolworths may be its
biggest client, the company has already
diversified its customer base. “Many
large importers supply multiple retailers
within South Africa so we’ve managed
to grow our client base that way.”
And despite the global economic
crunch, the company is in bullish mode.
March saw the opening of a Durban
office and a Johannesburg branch is on
the cards for later this year, focusing
largely on airfreight. “We see massive
airfreight potential to and from China
and the UK,” he said.
“We’re also getting involved in wine
exports to the UK, Europe, China and
the USA.”
Duffy believes his company can
make a difference to any retailer’s
business. “We can save money, provide
visibility and ultimately improve
efficiency – and that makes the
sale easier.”