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    The global recession might seem like something of the past for most sectors, but the impact it has had on the South African logistics industry is still a reality. “The perishable export industry was hit hardest due to the increase in logistic costs, which will continue to hurt the South African producer”, says Elmarie Painter, Managing Director of ACT World Saver.

    South African logistic companies, such as ACT World Saver, are feeling the pressure to reduce logistic costs, whilst traveling costs has grown exponentially in the past year. Transportation costs are currently measured at 53% of total logistics costs. This is 14% higher than the world average.
    “The aftermath of the recession should be seen as an opportunity for producers to change their exporting strategy,” says Painter. “The challenge in reducing costs will be to cut Free on Board (FOB) costs as well as cutting out the middleman, which in turn will allow companies to offer better prices”, continues Painter. Effective supply chain management holds great value for producers, this does not necessarily mean cutting out role players, but rather making use of one company that is able to offer a full spectrum of logistical functions. This way, producers will save on marked-up costs.

    In logistics timing is everything and a logistics company that understands this will determine the success of your export. The correct timing will ensure that producers get the best market price for their produce as the first grapes in the market, for example, get the best prices. In addition to this it is beneficial to make use of a logistics company with good relationships with shipping companies as this ensures that your container is not shortshipped.
    Short shipments cause your produce to stay at the harbour for more than two weeks, resulting in it being spoilt. Subsequently you will have to sell your produce at a lower price due to poor quality.

    The steep increase in logistic costs further caused a knock-on effect for producers and the industry. Producers are now looking at the local market to sell excess produce as they are offered better prices for selling produce locally as opposed to exporting it in some cases. In return this has a negative impact on the exports / logistics industry as there is a shortage in products to export.

    “In the aftermath of the recession ACT World Saver is experiencing an increase in activity and albeit cost increases. We are cutting down on costs, by managing our own transport and we are focusing more on a hands-on approach to ensure the best possible personal service to our clients.” confirms Painter.

  2. #2
    Platinum Member desA's Avatar
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    Cutting out the many middlemen in the SA chain will certainly save costs. From what I've seen there must be some fairly steep markups along the line.
    In search of South African Technology Nuggets(R), for sale & trading in South East Asia.

  3. #3
    Diamond Member wynn's Avatar
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    Maybe we can get some of those lekker grapes, apples, peaches, oranges etc.

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