By Neil Henderson, CEO Barloworld Transport Solutions.
Transporting goods by road is becoming increasingly challenging, but there are ways to address some of the issues.
The proportion of commercial freight tonnage transported by road in South Africa has steadily increased over the last ten years to approximately 89% today. This increase is mainly due to fluctuating and increasing needs of South Africa’ supply chains and a number of challenges faced by the National rail operator such as low service levels, lack of flexibility and capital investment delays. This puts an enormous strain on the road infrastructure, much of which is already in a bad state of repair, and results in increased traffic congestion, and higher vehicle maintenance costs. The impact of this is an increase in travel distances resulting in longer turnaround times reducing overall supply chain efficiency. According to the National Planning Commission, 20% of the paved road network is currently classified as being in a “poor” or “very poor” condition.
Other transportation challenges include volatile fuel prices, toll costs, stricter carbon requirements, lack of policies, poor co-ordination among government departments and their agencies, offloading turnaround times, and delays at border points. Loading and offloading turnaround times often exceed four hours for a linehaul vehicle, while delays at Beitbridge and Chirundu averaging 24 to 48 hours heavily impact on cross-border turnaround times. Cross border facilities have not kept up with the massive increase in fleet activity over the past five to 10 years. Factors such as the lack of standardisation of documentation between regional governments and authorities, lack of integrated documentation systems, little to no incremental investment in facilities, little upskilling of staff and an insufficient number of officials, impact on the efficiency of these border posts.
In addition, the scarcity of skills, particularly in areas such as qualified drivers and technicians, has an impact on vehicle operating costs, accident rates, fuel consumption, vehicle downtime and lifespan. Training costs, increased pressure for higher wages and related labour unrest also impact on the costs and efficiency of road transportation in the country. Of the licensed truck drivers who apply to us for positions, 92% to 94% do not meet our minimum requirements.
All of these factors are contributing to rising logistics operating costs. The CSIR’s 9th annual State of Logistics Survey for South Africa 2012, says the contribution of transport costs to overall logistics costs in 2012 was 61%, the highest it had been in nine years and far higher than the global average.
There is a general call to shift freight from road to rail, especially for bulk transport, to reduce carbon emissions and bring down costs. To achieve this, an inter-linked rail and port infrastructure supported by road, is required. More inland port terminals and integrated systems to enable cargo to be moved quickly and efficiently between road and rail are also needed.
But to achieve these goals will require a lot more impetus on the part of government to deliver on its commitment to allocate appropriate capital to infrastructure development.
According to the National Planning Commission (NPC), 96% of South Africa’s exports are conveyed by sea, which underlines the importance of the country’s ports.
Some 34% of the country’s GVA - a productivity metric that measures the difference between output and intermediate consumption - is concentrated in Gauteng, which is a considerable distance from the ports, according to the NPC.
Many of the challenges mentioned here are beyond the control of transport managers. However, measures can be taken to mitigate risks such as the rising cost of carrying inventory, and cargo imbalances that result in millions of rands wasted on empty return trips.
Leading transportation companies are addressing some of these issues by optimising vehicle fleets, using more fuel efficient vehicles, implementing strategic route planning, advancing driver training programmes and investing in appropriate technology which integrates these activities providing a more holistic information platform off which to proactively manage and optimise the entire logistics process. An efficient transport management service can cut transportation costs by 10% to 20% by transforming and optimising the entire distribution network.
Companies are going to find themselves under increasing pressure to optimise their logistics infrastructure and processes in an environmentally responsible way. Transport is responsible for about 11% of South Africa's total greenhouse gas emissions and is the biggest area of logistics that affects the environment, but it is one of the easiest components to address strategically.
For example Barloworld Transport Solutions’ aerodynamically designed Green Trailer, a superlink taut liner trailer combination, significantly reduces the amount of fuel it uses through practical innovation. A research exercise conducted on the N3 between Johannesburg and Durban showed that when the Green Trailer travelled at a constant speed of between 70 and 80 km/h almost 11% of fuel was saved. This translates into a reduction of 66.8 tons of carbon dioxide emissions over a ten-month period.
A number of other worthwhile green innovations are available such as CAST-CO2, which calculates the environmental impact of any supply chain by calculating the carbon footprint and carbon cost. Smart trucks, which are based on Performance Based Standards (PBS), aim on improving the overall performance of extra-heavy vehicles. These vehicles are currently mainly used in ‘’off-road’’ applications e.g. the timber and forestry industry. Smart trucks provide improved stability, reduce the number of vehicle trips, require fewer trucks on the road, improve transport productivity, reduce carbon emissions and significantly reduce road wear. These vehicles are typically longer and carry heavier loads than other trucks (however, still within the allowable mass per axle), and are therefore limited to travelling on certain roads. The underlying Performance Based Standards on which these trucks are based allows vehicle designers to use the latest innovative design techniques.
Sixty smart trucks are currently in operation in SA, with 30 more in the process of being designed and approved. To operate smart trucks requires special permits issued by the Department of Transport (DoT).
Another practice that is gaining traction in overseas markets among manufacturers is reshoring, which entails sourcing more product locally, to reduce the number of kilometres travelled to transport goods to their destination and reduce carbon emissions. One of the positive spin-offs of reshoring is that it creates more local jobs and improves the National balance of payments. According to MIT’s Forum for Supply Chain Innovation survey on reshoring, nearly half of the manufacturers in the US are considering following this practice and it is also catching on in Europe.
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