The performance and growth of the South African logistics industry are both inputs to and outflows from the performance and growth of the South African economy – especially in the primary and secondary sectors. The exchange rate, inflation rate and interest rate directly impact the cost performance of the industry. Other macroeconomic issues such as the structure of the South African economy, balance of payments, budget deficits and the human resource problem affect the economy as a whole, which influences the demand for logistics services. Simultaneously, the performance of the logistics industry – specifically the cost of logistics – has a bearing on the global competitiveness of South African industries.
This year’s survey looks back over a decade of measuring logistics costs while breaking ground by providing, for the first time, a forecast of the current calendar year’s costs.
A deeper investigation of individual cost components and cost drivers show that the increase in logistics costs is perhaps not so much the result of deteriorating efficiency in the industry but the disproportionate growth in cost drivers – especially fuel. To change the trends in underlying cost drivers or significantly mitigate their impact requires more than just operational efficiency enhancements. It requires bold steps in addressing the ingrained issues that stifle the economy as well as new directions in managing supply chains.
Research projects recently conducted by KPMG analyse a number of supply chain integration themes. A series of person-to-person interviews were conducted with supply chain directors (or their equivalent) from 80 companies in KPMG’s network of member firms. Respondents represented a broad cross-section of industries and sectors including consumer packaged goods, retail, diversified industries, logistics providers, utilities, and telecommunications. These inputs provided valuable insights and the most relevant ones are included in this survey report.