In the new era of business, there are two critical matters to contend with: the Green Revolution and the Digital Revolution. This was the opening remarks made by Dr Randall Jonas, Business Strategist and Senior Researcher at EU GMSE Skills, during a panel discussion recently hosted by Exporters Eastern Cape.
Facilitating the panel discussion on enhancing the competitiveness of exporters and their value chains, Jonas noted that the South African freight and logistics market, currently valued at 3.79 billion USD, is projected to reach 19.9 billion USD by 2030. The primary growth driver in this market is the courier, express, and parcels sector, fuelled by e-commerce.
Jonas and other panellists focused on a number of critical areas essential for the sustainability of the logistics value chain: green logistics, compliance with the South African Reserve Bank, Transnet’s reform and recovery, technology and smart warehousing.
Lucinda Daniels, Head of Exchange Control for Rand Merchant Bank, discussed the South African Reserve Bank’s shift from a rules-based to a risk-based strategy, which could impact exporters. “This means that compliance in terms of foreign currency trade will become the key responsibility of the exporter, while fostering an ethical culture,” explained Daniels.
Ruan du Toit, Branch Manager at DACHSER South Africa, emphasised the importance of Environmental, Social, and Governance (ESG) factors and the use of technology in logistics. He acknowledged that the initial investment in technology is challenging, but the efficiency benefits outweigh the challenges. He also highlighted the importance of data quality, security, and privacy.
“Technology enhances cargo handling and improves tracking and tracing. It also reduces costs by optimising the supply chain. Technology can analyse data, predict risks, and provide proactive actions to mitigate risks or to create contingency plans,” said Du Toit.
Regarding green logistics, Du Toit mentioned several small steps that can be implemented, such as using renewable energy, recycling, offsetting carbon footprints, optimising vehicle maintenance to reduce emissions, consolidating routes, and optimising cargo. “Collaboration and communication with stakeholders are important. Inventory management is critical, and appropriately skilled workers are needed in the industry,” he added.
From Transnet’s perspective, Dr Andrew Shaw, Group Chief Officer of Strategy and Planning, shared the parastatal's new strategy which is focused on the reform and recovery of its ports and rail systems. Repositioning the ports and rail systems is central to this strategy. He explained that Transnet Port Terminals (TPT) and Transnet National Ports Authority (TNPA) have been separated, with TNPA now having its own board to meet regulatory requirements, performance standards, and licensing conditions, while TPT will focus on infrastructure. “This strategy opens up the possibility for private operators to compete with Transnet and attract private sector investment where expansion is needed,” said Shaw.
To recover the rail network, a similar approach is planned. “Transnet is committed to the reform and recovery plan to drive sustainability,” said Shaw.
He added that due to a decline in available locomotives, decaying port equipment, and a weak maintenance strategy, there is now a strong focus on maintenance and the purchase of new equipment and tugs. To this end, Transnet has appointed a chief operations officer to drive the recovery strategy.
Samantha Dunlop, owner of Selah Trading, addressed the benefits of bonded warehousing for exporters. This offers manufacturers the opportunity to hold imported raw materials and export-ready finished products. She explained that using bonded warehousing assists with just-in-time supply of components and helps avert risks of component shortages. “This concept allows businesses to pull bond goods as needed,” said Dunlop.
Sugan Naidoo, CEO of Titan Cargo, shared best practices on turning adverse situations into positive outcomes. He particularly raised the opportunity of warehousing in strategically located areas, such as state-owned buildings which are often unattended and vacant. Relaying his story, he proudly mentioned the derelict Transnet building near the Cape Town port, which through negotiations with Transnet, he transformed it into a world-class warehouse. “The deal took two years to come to fruition, but today we have a world-class facility,” he said.
Finally, the panellists commented on the volatility of the Rand/Dollar exchange rate and suggested that it might be better to trade in local currencies.
