Figures tell the story
Researchers working at Stellenbosch University have published their latest logistics barometer. It reveals that the share of logistics costs in GDP has risen; and that the sector’s employees are inadequately trained, overall.
At the end of last year the logistics faculty of South Africa’s Stellenbosch University presented its latest logistics barometer. It includes’ calculations of the costs generated in 2014, an estimate of the same for 2015 and a look at the likely results for 2016. The calculations are based on an extensive set of data built up over 20 years of research into freight volumes and freight flows in South Africa. The researchers have further refined the logistics cost calculations over the past 13 years to make them more reliable.
The relationship between South Africa’s gross domestic product (GDP)and the nation’s overall logistics costs per twelve months have been the subject of the authors’ special attention. According to professor Jan Havenga, one of the pioneering logistics costs researchers at Stellenbosch University, “the research has shown that the relationship between national logistics costs and GDP, having improved for many years, has now been moving in the wrong direction for the past five to six years.”
Logistics costs as a proportion of GDP
The figures show that total costs generated by the industry in 2014 came to approximately EUR 29.7 billion, which the scientists reported accounted for an 11.2% share of South Africa’s GDP. For 2015 the authors expect logistics’ total costs to increase to about EUR 32.6 billion, and then to around EUR 34.6 billion for 2016, which would correspond to an 11.8% share of total GDP.
Taking a closer look at 2014, it is noticeable that more than half of the costs incurred that year (57%), arise from the actual transportation of the goods. Investment costs account for 15.2% of the total, warehousing costs for 14.6% and management and administrative costs for 13.5%.
Most of the transport costs were accounted for by road haulage in 2014; 83% of the total. 15% of all costs were down to railfreight operations and 2% to pipelines. Outlays on fuel represented road haulage’s largest cost factor.
Call for better training
Besides analysing the country’s transport costs the authors have also identified the need for skills development in the nation’s logistics companies. They have established a “looming threat to the future of the South African supply chain generation, due to a lack of practical knowledge and skills transfer in the work environment, as well as sub-standard basic education and underperforming higher education.”
There are some very commendable initiatives by major logistics providers in South Africa relating to training and skills development, the researchers added, but the country nevertheless needs a renewed focus on these areas to support the industry’s ability to compete.