(Released jointly by the CSIR and IMPERIAL Logistics, in partnership with Stellenbosch University)

The value that logistics adds to the South African economy, contributing to the country's global competitiveness and sustainability should be greater than the costs. This is according to the 6th State of LogisticsTM survey, the authoritative study on logistics in the country published in March 2010 by the CSIR, IMPERIAL Logistics and Stellenbosch University.

"Global pressures remain to reduce logistics costs, while increasing emphasis is being placed on providing quality service and adding value. Furthermore, in line with global trends, the drive towards a more sustainable logistics system is gaining prominence," says Hans Ittmann, CSIR Built Environment Executive Director.

He adds that this year's edition, themed 'logistics value and costs - driving macro and micro-economic change towards global competitiveness and sustainability', emphasises the critical economic value that should be derived from logistics. "The real mitigation of risk and realising sustainable logistics solutions can only, however, be generated through effective collaboration between private and public sectors, process improvements and structural changes," Ittmann says.

The survey finds that though South Africa saw an increase of 6,9% in logistics costs compared to the previous year's R317 billion, 2008 costs are at their lowest since 2004, totalling R339 billion or 14,7% of GDP. However, when compared to other countries' logistics costs, e.g. the USA's 9,4% (2008), domestic costs remain too high.

During 2008, the recessionary global oil price positively impacted industry costs, whereas SA's higher-than-normal transport demand and poor network configuration, rising bad road conditions, radically increased storage and inventory costs, need for increased funding to bolster capacity and consistently increasing road corridor traffic had a negative effect. For example, the percentage of bad roads in SA's secondary road network increased from 8% (1998) to 20% (2008) with significant deliveries routed via this road network.

"IMPERIAL Logistics is continuously working with our customers to implement sustainable solutions and, for me, that's one of the positive things that one has to take out of the recession," says Marius Swanepoel, CEO of IMPERIAL Logistics. "Our customers and companies in general are increasingly more interested to find better ways of doing things, which allows us to work closer with them to create more sustainable and cost effective solutions. It is more about taking waste out of the supply chain and I think this is what we're seeing now."

According to Dr Jan Havenga, Director at the Stellenbosch University Centre for Supply Chain Management, certain aspects of South Africa's logistics cost situation still require significant attention. However, it is heartening to note that wide consensus exists among logistics stakeholders on many important initiatives.

Havenga says, "The challenge however remains: Although consensus exists around issues such as regeneration and use of rail capacity, not enough has been done yet. The competitiveness and sustainability of South Africa's logistics system remain at risk and moving from consensus to action is long overdue. Public-private partnerships are a key success factor."

Dr Sibusiso Sibisi, President and CEO of the CSIR, concurs and adds, "The State of LogisticsTM survey highlights the importance of the critical area of logistics and supply chain management in the global market. Since its 2004 maiden issue, it has aimed to provide a comprehensive picture of the state of logistics in South Africa through adopting a collaborative approach to knowledge generation. We believe the surveys open the way for further discussions, interactions and dialogue on various logistics and supply chain management issues."

"This publication has become one of the premier references for logistics in South Africa through benchmark-driven research and long-term partnerships with IMPERIAL Logistics and Stellenbosch University," concludes Ittmann.

Read the 6th State of LogisticsTM survey at www.csir.co.za/sol or www.imperiallogistics.co.za/sol.