The road ahead

South Africa’s skills shortages continue to bog down the logistics industry

Land freight transport must be given strategic priority, while the need to address skills shortages in the logistics industry must be given top priority, according to the 8th Annual State of Logistics Survey.

South Africa’s freight industry has been complimented by international experts as being efficient and globally competitive. However, skills shortages – which range from driving a truck, bus or coach to more learned positions in fleet management and supply chain management – continue to dog the industry.

This state of affairs was echoed by international strategist Chantel Ilbury, who told delegates at the recent annual conference of the South African Association of Freight Forwarders in Cape Town that the freight sector was in a prime position to continue growing despite global economic woes.

“We have looked at the various scenarios for the transport sector and have labelled them as fast-forward, gridlocked, stalling, and running on empty. At present, the freight industry sits in the fast-forward scenario and we believe this is where it will stay in the foreseeable future,” she said.

The reason for this, according to Ilbury, was that the industry was “globally competitive and efficient” and that the country was continuing to perform well, leaving it in the premier league at present. She warned, however, that unemployment and the lack of education were “red flags” that could see the country being downgraded to a rating of second division.

A similar sentiment was expressed by Cobus Rossouw, chief integration officer of IMPERIAL Logistics, in a preface to the 8th Annual State of Logistics Survey, which was released late in May by the Council for Scientific and Industrial Research (CSIR), Stellenbosch University and IMPERIAL Logistics.

In it, he complimented the industry for being “(a) leader in complex, emerging and dynamic logistics environments”, but added that it had “achieved success despite severe skills shortages, lack of scale and geographical impediments”.

References to South Africa’s skills shortage in the transport and logistics industry have become a regular occurrence in this logistics survey and previous others, and the shortage is seen as one of the impediments to the growth of the industries.

Rossouw said logistics was fast becoming relevant to all South Africans. “In the consumer market, logistics management is recognised as a core competence of international giants investing in South Africa and as an underlying cause of domestic performance gaps.” In the commodity markets, in particular, logistics constraints are compromising export efficiency and limiting development of the African continent’s potential.

Having described the government’s commitment to substantial capital investment to improve logistics infrastructure, Rossouw said logistics was still regarded by most as an impediment to the competitiveness of South Africa as a country and to the organisations that operated locally.

The reality was that the logistics challenges facing South Africa were continuing, with increased fuel costs, insufficient investment in intermodal capabilities and inadequate maintenance of over-strained roads, thus exposing the soft underbelly of our geographically challenged economy.

“For logistics to become a competitive weapon for South Africa, change is required: change to the mindsets that shape our perceptions about logistics; change in the way we think about the opportunities that the logistics profession offers; change to the credit we give ourselves when we succeed among complex logistics challenges,” said Rossouw.

He added that South Africans needed to recognise that the logistics profession offered immense opportunities for talented people across multiple spectra of society.

Logistics execution, such as controlling transport or warehouse operations, would remain a critically important function in manufacturing, distribution and retail organisations.

Logistics planning – including forecasting, demand management, materials, production and replenishment planning as well as vehicle routing – offers great career opportunities for people with analytical and decision-making capabilities. Logistics management, including tactical and strategic aspects, is becoming increasingly important for company competitiveness and provides fantastic aspirational opportunities.

In her executive summary of the survey as scientific editor, Nadia Viljoen from the CSIR stated that South Africa’s challenges regarding education and training, job creation targets, unemployment, regional integration and socioeconomics are shared by its BRICS counterparts (Brazil, Russia, India, China).

“Poor succession planning and a lack of mentorship are worsening the loss of skills from the logistics and supply chain management sector.

There is a great need for on-the-job training, and human resource functions need to work more closely with supply chain staff to define internal training programmes,” she added.

Graduates need to bridge the gap between their broad knowledge base and the management skills required of logistics and supply chain managers, Viljoen noted.

Role models and graduate training programmes play a vital role in helping young graduates focus their career development.

“The management skills required by logistics and supply chain managers are rapidly diversifying, and employees need to pursue broader areas of learning to remain competitive.

Cultivating the human capital that already exists in organisations is crucial to address the skills shortage on the high-skills end of the spectrum,” she said.

According to Viljoen, for South Africa to become more competitive amid global changes and uncertainties, it is necessary that land freight transport be elevated as a strategic priority and that infrastructure planning takes into account the operational characteristics and needs of logistics systems. Enhancing the quantitative research that provides decision support for planning and industry strategy requires more comprehensive datasets, made possible only though industry co-operation and input.

“Finally, it is critical – from a sustainability point of view – that the imperatives of a lowcarbon economy and skills development remain top priorities,” she added.

The logistics costs survey has served as a macro-economic measurement tool for eight consecutive years. According to the survey, logistics costs rose from R323-billion in 2009 to R339-billion in 2010. Transport costs rose by 16.2% – attributable to steep fuel price increases – while inventory carrying costs dropped by 19.9% due to record low interest rates. Logistics costs as a percentage of gross domestic product decreased from 13.5% in 2009 to 12.7% in 2010.

Road accidents, which relate to driving skills, constitute the largest proportion of externality costs associated with road transport. National costs for road accidents are estimated at R13.8-billion per annum, while carbon dioxide emissions would have added another R6.5- billion to the transport bill if these emissions were taxed.

Udo Rypstra

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This edition

Issue 58