Opportunity for logistics companies

2014-10-21 00:00

THERE is a massive opportunity for logistics and transport companies dealing with fast moving consumer goods (FMCG), said Nicholas de Canha, CEO of Imperial Fleet Management.

“The transportation of fast moving consumer goods has experienced a significant growth of late in South Africa and Africa.”

For instance, imports of containers into Durban ports increased by five percent in 2013. Most imports to Gauteng are consumer goods.

“While a fair amount of investment is being made … to upgrade the country’s rail networks to be sufficient to meet future demand, the transportation of goods and services is still largely reliant on road transport and this is a massive opportunity for FMCG logistical and transport companies.”

De Canha said additional imposed costs like increases in fuel prices and e-tolls can weigh heavily on any company running its own fleet of vehicles.

A company running a fleet of around 30 trucks will see their operational costs increase by about R30 000 a month due to e-tolls alone and De Canha expects many more logistics and transport companies will look to optimise their fleet operations.

The biggest current challenge for South Africa is the urgent need to upgrade the ageing rail infrastructure and to maintain the road infrastructure, said Richard Matchett, divisional director at WSP Civil and Structural Engineers Africa.

This is despite SA having the most extensive road and rail network in Africa.

Road and rail networks are the backbone of any economy, however, they are also one of the most important assets in terms of sheer monetary value.

“If you can’t move goods, services and people around, your economy stagnates. Having a long-term view when preparing budgets for new infrastructure or for upgrading existing transport networks is critically important,” said Matchett.

SA is revitalising its transport networks.

“To move forward, we need to focus on the positive developments and acknowledge that there has been significant traction and change in recent years,” said De Buys Scott, head of infrastructure advisory and global infrastructure major projects at KPMG.

Some notable developments in rail, he said, includes projects by Transnet to upgrade the ports, the parastatal’s passenger fleet programme, and the Passenger Rail Agency of SA’s programme to expand and modernise its rail services. — Fin24.

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