Logistics encompasses more than freight

Following surveys with clients on the trends in freight forwarding, an increasingly important sector in South Africa, the research found that in the past few years, the industry has made significant progress in the freight forwarding and clearing by moving towards supply chain management and optimisation.

By Marcia Dippenaar

31 Jan 2011

Many key players in this industry have piloted successful programmes and then rolled these out to their customers. This process of mapping the movement of goods is indicative of supply chain management and optimisation.

According to SAAFF, freight forwarders are the "architects of transport" and globalisation and the need to reduce costs over the entire supply chain have re-focused the freight forwarder in ways that are innovative and functional.

In South Africa, many of the key players run similar processes, as this is seen as the way forward for companies looking to keep ahead in this competitive market. The key is not to stagnate by providing what is no longer required, standard freight forwarding and clearing.

Future trends

In South Africa, the trend is to move towards offering integrated supply chain solutions to clients. Clients are no longer looking to move goods to numerous destinations by splitting goods transactions, but want to cut out the intermediary and have their distribution done by a single provider.

According to global management consultancy PRTM's Global Supply Chain Trends 2010-2012 survey, published in 2010, there are five key supply chain challenges.

Consumers are increasingly price sensitive and less brand-loyal, resulting in commoditization and a permanent increase in supply chain volatility.
While most participants are looking to international customers for future market growth, few are prepared for the complexity that results from serving global customers with regionally customised products.
End-to-end supply chain cost optimization will be critical in the future.
Risk and opportunity management should span the entire supply chain, including the supply chains of key partners.
Existing supply chain organizations are not truly integrated or empowered-specifically, 30% say that problems with the supply chain organization-such as lack of integration between product development and manufacturing functions-are standing in their way of capturing the benefits of the economic recovery.

Theory and legislative knowledge critical

The old system of supply chain management growing out of experience in managing a warehouse has given way to focused academic, career-enhancing qualifications such as a BCom in Logistics and Supply Chain Management or BSc in Industrial Engineering.

Legislation has changed, requiring extensive training as to the new tariffs as well as procedures to be followed. The entire customs process is looking to go electronic and move away from paper-based systems.