Bulk transportation payload incidents in South Africa and an overview of the entire industry
Bulk transportation payload incidents in South Africa and an overview of the entire logistics industry and the future of to come.
“This Turing Insights blog posted was quoted from research done and produced by “Who Owns Whom & Liz Kneale”
INTRODUCTION
This covers the transport of freight by road where the total income for the sector in 2014 was in excess of R125bn, indicating that South Africa’s road transport contributes at least 3.7% to GDP. Statistics SA’s estimate of a total outsourced contract road freight payload of 574,560,000 tons for 2014 can be doubled as there is a 50/50 split between outsourced and in-sourced road freight transportation. It is a highly competitive sector, with a tight profit margin of 4%, and in order to improve efficiency and increase profits, industry players are optimising innovation and smart partnerships to develop more collaborative operations using multi-modal and intermodal transport options. As the road freight sector and the economy enjoy an interdependent and symbiotic relationship, the challenges facing the global and local economy have a knock-on effect on the volumes of goods requiring transportation by road. © Copyright Who Owns Whom (Pty) Ltd
DESCRIPTION OF THE INDUSTRY
Stated simplistically, freight transport by road is the movement of goods from all economic sectors by road from a point of origin to a point of consumption or use.
The sector excludes the operation of terminal facilities, crating and packing for transport purposes, and delivery departments of warehouses operated by business concerns for their own use. Freight services cover items or shipments above 30kg in weight. The road freight industry may provide just-in-time services or be an important link in supply chain management logistics. The essence of the industry is to balance costs and service levels.
Transportation for sale or purchase may consist of the basic movement of finished products from point A to point B, such as the delivery of Fast Moving Consumer Goods (FMCG) from a supplier to a warehouse, or from a warehouse to a retailer. The flow of goods is direct and no other processes or networks are involved.
At the other end of the scale this transportation activity may form part of a complex and interconnected supply chain process involving the movement of raw materials or components from a point of origin, through production, manufacturing and processing, and via the wholesaler and retailer to the point of sale.
The flow of goods is interrupted at various stages, involving a number of different activities and role-players. Each link in the chain could involve the movement and storage of goods, information and documentation flow, tracking and monitoring systems, change of ownership and financial transactions. In some instances, logistics companies become involved even earlier in the supply chain, for example, land clearing, fruit harvesting and run-of-mines operations. © Copyright Who Owns Whom (Pty) Ltd
Supply chain management is essential to ensure that every link in the chain interconnects at the right place, at the right time and in the most cost-efficient way.
Businesses in this industry range from large corporates such as Barloworld Logistics Africa (Pty) Ltd, the Laser Group and Imperial Holdings, to small family businesses and owner-driver operations. In the informal sector animal and hand-drawn vehicles may be used to transport goods. The Road Freight Association (RFA) describes the sector as being characterised by the consolidation of logistics and transport companies. The market is therefore dominated by large companies offering flexible and integrated end-to-end supply chain management and logistics solutions for a wide variety of commodities to a wide variety of customers. These companies use a network of fixed fleet, specialist operating companies, subsidiaries, accredited sub-contractors and joint venture partners.
Owner-driver schemes offer opportunities for new entrants into the industry. Road freight companies may sub-contract work to owner-drivers, implement their own schemes or convert their existing fleets to owner-driver schemes. Possible operational options include:
– Company financed employees owning their own vehicles and driving on behalf of the company;
– Company financed owner-drivers managed by the company itself or a third party;
– Owner-drivers entering into a service agreement as independent contractors;
– Drivers owning a single vehicle or a small fleet, or owning the truck-tractor but not the trailer; and
-Owner-drivers operating as independent contractors and registering with an outsourcing agency.
The removals industry offers domestic and international household relocations, for individual families and corporate employees, plus the relevant import, export, immigration and settling-in services. Specialised services include the relocation of cars, boats, motor cycles, art and antiques. Commercial and industrial relocations offer added-value services such as the dismantling and reassembling of office furniture, electronic equipment and plant and machinery.
Due to the extent of the customer base, the variety of freight, and external influencing factors, logistics companies are often required to offer dynamic, flexible and customised solutions to meet specific needs. The sector also has to handle disruptions caused by road conditions, traffic congestion, vehicle breakdowns, accidents, hijackings, public holidays, labour disputes, protest action, poor weather conditions and natural disasters. IT support software is valuable in providing solutions to these issues. © Copyright Who Owns Whom (Pty) Ltd
Compiled by:
Liz Kneale
[email protected]
