Economic growth in South Africa, expected to remain sluggish in 2017, could be stimulated if the South African Government were to fast track its expenditure on strategic infrastructure projects, especially those in the transport sector. This is the view of David Kruyer, MD and founder of Cape Town based Concargo, a supply chain and road freight logistics company.
“In February 2015 Government announced plans to spend R813 billion on infrastructure over a period of three years. However spend to date has been lower than anticipated,” says David, “But if Government is serious about keeping to its expenditure plan – and stimulating economic growth – it needs to fast track infrastructural spend and focus on projects in the transportation industry.”
South Africa’s transport infrastructure has a direct impact on the growth of the economy, contributing 48% to GPD, and determines the efficiency with which our country does business. “Upgrading our transport infrastructure will go a long way to improving South Africa’s growth prospects.”
David, who has spent the past three decades in the highly cyclical supply chain and road freight logistics industry, believes better days lie ahead provided we, as a country, make the necessary infrastructural investments as soon as possible.
“No matter the sector, business needs to get things from A to B which requires an efficient and reliable transport sector. Road, at 86%, carries the majority share of freight compared with other modes, followed by shipping and then rail.
“Road is currently regarded as being the most reliable, predictable and cost effective mode of inland transportation and the development of transport corridors, such as the Trans-Kalahari Corridor, have gone a long way to growing trade with neighbouring countries,” he adds.
“2016 was a tough year for business and consumers alike, exacerbated by the increase in fuel costs, the weakening of the Rand, political instability and a slow growing economy. It not only impacted South Africa but other African countries too with a number of projects being put on hold and mining production lower than expected. However, we are starting to see positive cross border movement, we are transporting sugar into Mozambique and are negotiating the logistics of getting steel to Tanzania.”
David expects demand for effective, economically viable transport services to increase in the years ahead. ‘Increasingly, truck and rail services will be required at short notice to transport large volumes of cargo from seaports to their destinations, both in South Africa and into the hinterland. Getting goods or equipment to customers in an efficient and economically viable way is paramount to business success.
“Whether we are required to supply 1 to 100 trucks, or more, at short notice when a ship docks and cargo needs to be discharged, planning the move of massive pieces of equipment across the country to implement strategic infrastructure projects, or out-of-gauge cargo on a long haul, the focus is meticulous planning and delivering on time and within budget.”
In its 30 years of business, Concargo has dealt with many unusual projects which have required intricate pre-planning and creative thinking to meet client transport requirements.
These include managing the transport and logistics for big budget movies (such as Blood Diamond and Home Alone), co-ordinating and managing the transport and logistics for international events (such as BMW’s global media launch of its 650 cabriolet series in Cape Town) and high security transportation and escorting of Grade 12 examination papers from SA printers to the education ministries in various Southern African countries.
The company has also successfully transported abnormal cargoes such as large wind towertubes for renewable energy projects and 9m wide mining bucket wheel reclaimers, moved from Saldanha to Sishen South mine over the steep Piekeniersberg Pass.
Even though South Africa currently permits some of the largest vehicle combinations in the world for general freight haulage, at a maximum general vehicle mass of 56 tonnes, moving heavy-lift cargo remains a challenge as each province requires different permits and a police escort. “Because time is money, a more efficient and streamlined national permit system would certainly help to speed up delivery and boost efficiency,” David asserts.
Moving goods over borders into neighbouring countries is even more complex but is 40% of Concargo’s business which is why they have developed strategic business partnerships with companies in the SADC region. These local companies keep in close communication with statutory officials and other authorities to ensure a seamless and coordinated customs process.
One of the positive developments taking place in the freight industry is the use of sophisticated IT systems and tracking in order to monitor the status of the shipment anywhere in Southern Africa. “An innovative tracking and tracing system ensures transparency in the entire supply chain and our Proof of Delivery Image System (PODIS) allows customers to track shipments 24/7, 365 days a year.”
In a country greatly in need of job creation and skills development, David believes it will also become increasingly important to showcase transport logistics as a career. “Transport logistics in Africa is a vibrant and exciting industry to be part of. It’s a growing industry and in celebration of our 30th anniversary we are taking on four graduates as interns this year,” he concludes.