Logistics inefficiencies pressure South African SMEs

Source: ©soleg via1123RF

Nelson Teixeira, managing director of operations for sub-Saharan Africa at FedEx, explains: “The logistics sector is in a constant state of evolution, driven by factors like market access, supply and demand, and customer expectations. The past few years have shed light on a variety of focus areas, including speed, reliability, and visibility.

Logistics operators should focus on delivering a consistently high standard of service while maximising revenue and minimising costs to gain and sustain market share over time. In the SME sector, striking this balance is a make-or-break factor.”

System inefficiencies carry disproportionate SME impact

In South Africa’s citrus export sector, the Citrus Growers’ Association reported that logistics inefficiencies cost more than R1.6bn over one year. Costs included additional labour, extended cold storage beyond contracted periods, and higher transport expenses linked to port delays.

For SMEs, similar disruptions carry a greater impact due to limited cash flow, narrower margins and reduced operational buffers. Where larger firms can absorb such costs, smaller businesses often cannot.

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South Africa’s high SME failure rate reflects this vulnerability, with many businesses not surviving beyond five years, leaving limited capacity to recover from repeated supply chain disruptions.

Delivery performance

Delivery issues remain among the most common complaints recorded by the Consumer Goods and Services Ombud.

More than 20% of online shoppers say they will not return to a retailer after a late delivery and may discourage others from buying from the same business, placing direct pressure on fulfilment performance.

Logistics technology

For SMEs, consistent delivery performance has shifted from a competitive advantage to a baseline expectation.

Logistics technology is increasingly being used to improve efficiency through route optimisation, predictive planning and better visibility across supply chains.

FedEx is among global logistics operators investing in digital transformation to improve tracking, coordination and operational efficiency across shipments. Similar approaches across the sector are enabling businesses to reduce delays, improve accuracy and respond faster to disruptions.

These systems allow businesses to identify issues earlier in the delivery cycle, manage exceptions more effectively and maintain communication with customers during transit.