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South Africa’s Logistics Barometer
Jan Havenga
Department of Logistics
Stellenbosch University
Logistics costs as a % of GDP – a 12 year time series
South Africa’s freight demand
What does it say about how we manage freight
transport?
I’ve not seen a single transport indicator, where South
Africa is lower than world average
South Africa’s logistics costs in perspective
Logistics cost components tracked over time
South Africa’s freight profile….
Current freight Future freight
Demand side
• Reshoring (trade reduction)
• Lower choice
• Consumption at source
• Recycling at source
• 3D printing
• Less Waste
Supply side
• More efficient trucking
• Drivetrain
• Fuel
• Driving habits
• More efficient logistics
• Scheduling
• Visibility and collaboration
• Lower empty haul
• Modal shift
Solutions
Tonne-kilometres by mode and typology
Rail friendly freight – The case for corridors
• Natal economic
corridor
• Natal rail friendly corridor
We estimate that between 40 and 60% of corridor
freight is rail friendly
• Cape economic
corridor
• Cape rail friendly corridor
What the Barometer has achieved:
• Positioning (modes/network design)
• Ongoing discussion around improvements
• Policy effects
• Shareholder involvement
• Industry involvement
• Demand management
• Forecasting
• Capital planningIndustry discussion
• Service design
Consistent reference and benchmark source
The demise and renaissance of rail
• Demise: 1985 to 2005
• Loss of density
• Lack of investment
• Inadequate regulatory
landscape
• Poor market space
identification
• Management issues
11
But what about ports?
• Rail renaissance: 2006 →
• Core business focus
• Demand management
• Market space identification
• Investment
Collaboration – 5 spheres
• Freight owners
• Logistics service providers
• Infrastructure owners
• State owned operators
• Regulator
12
Maritime Cost ComponentsSurface Cost
Components
Port Ocean
Delays increase:
1) Transport cost
2) Cycle stock cost
3) Safety stock cost
4) Administration cost
Delays increase:
1) Transport cost
2) Cycle stock cost
3) Safety stock cost
4) Administration cost
Extending the barometer to a full blown trade view
Demand forecasting - A thought on container forecasts
• Global state-of-practice uses a GDP multiplier for forecasts, this has
been proven to be a misleading approach
-
500
1 000
1 500
2 000
2 500
3 000
Ind
ex 1
979=
100
World GDP
World TEU
Containerisation propensity causes the “multiplier” to
disappear
0%
10%
20%
30%
40%
50%
60%
70%
% c
on
tain
eri
se
d
Year
Global trend for all freight
Container Penetration Factor (the Ceiling is 100%)
0%
20%
40%
60%
80%
100%
120%
Ferr
och
rom
e
Iron &
ste
el bas
ic indust
ries
Ferr
om
anga
nese
Wood &
wood p
roduct
s
Indust
rial
chem
ical
s
Food &
food p
roce
ssin
g
Oth
er
chem
ical
s
Citru
s
Mac
hin
ery
& e
quip
ment
Vege
table
s
Tra
nsp
ort
equip
ment
Pap
er
& p
aper
pro
duct
s
Deci
duous
fruit
Oth
er
man
ufa
cturi
ng
indust
ries
Non-m
eta
llic
min
era
l pro
duct
s
Moto
r ve
hic
le p
arts
& a
ccess
ori
es
Rubber
pro
duct
s
Meta
l pro
duct
s excl
. m
achin
ery
Ele
ctri
cal m
achin
ery
Bri
cks
Furn
iture
Textile
s &
clo
thin
g
Tobac
co p
roduct
s
Phar
mac
eutica
ls &
toile
trie
s
Cott
on
Pri
nting
& p
ublis
hin
g
Dai
ry
Liv
est
ock
(sl
augh
tere
d)
Subtr
opic
al fru
it
Vitic
ulture
2009 2040LK31
These commodities are 100%
containerised – No more so
called multiplier
Historic container
growth rate faster than
GDP
Future container growth
rate faster than GDP
Base
Extrapolated container forecasts versus
commodity-based forecast – what the error causes
0
2000
4000
6000
8000
10000
12000
1979
1984
1989
1994
1999
2004
2009
2014
2019
2024
2029
2034
2039
Index 1
979=
100
TEU History Extrapolated (10 yrs history)
Extrapolated (20 yrs history) Extrapolated (30 yrs history)
GDP Index Commodity-based forecast
100% containerised growth shows container limits
0
2000
4000
6000
8000
10000
12000
1979
1984
1989
1994
1999
2004
2009
2014
2019
2024
2029
2034
2039
Index 1
979=
100
TEU History Extrapolated (10 yrs history)
Extrapolated (20 yrs history) Extrapolated (30 yrs history)
GDP Index Commodity-based forecast
100% containerised
A final thought on demand side – the future of trade 19
0%
5%
10%
15%
20%
25%
30%
35%
0
10
20
30
40
50
60
70
80
90
10018
20
18
24
18
28
18
32
18
36
18
40
18
44
18
48
18
52
18
56
18
60
18
64
18
68
18
72
18
76
18
80
18
84
18
88
18
92
18
96
19
00
19
04
19
08
19
12
19
16
19
20
19
24
19
28
19
32
19
36
19
40
19
44
19
48
19
52
19
56
19
60
19
64
19
68
19
72
19
76
19
80
19
84
19
88
19
92
19
96
20
00
20
04
20
08
20
12
20
16
Tra
de
as
% o
f w
orl
d G
DP
GD
P (
tril
lio
n $
) c
urr
en
t p
ric
es
GDP (trillion $) current prices Trade as a percentage of GDPI w
as b
orn
Univ
ers
ity
Fir
st jo
b
Relocalisation is real – the speed and disaggregation is still
unsure
The short view confirms reversal
50%
100%
150%
200%
250%
300%
350%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Ind
ex =
1990
Trade as a percentage of GDP GDP (trillion $) current prices Global container trade volume as percentage of global volume
Thank you!
www.sun.ac.za/logisticsbarometer