South Africa’s rising logistics costs : an uncertain future
Date
2014-12
Journal Title
Journal ISSN
Volume Title
Publisher
AOSIS Publishing
Abstract
A country’s competitiveness can be severely hampered by an uncompetitive freight logistics
system. During the first decade of the 21st century, two in-depth models were developed
for South Africa which provide a framework for measuring and improving the country’s
freight logistics system – the cost of logistics survey and the freight demand model. These
models also allow for the development of scenarios for key identified risks. The objectives of
this study were to provide an overview of South Africa’s surface freight transport industry,
identify key risks to national competitiveness and suggest ways in which these risks could
be mitigated. Freight flows were modelled by disaggregating the national input–output
model into 372 origin–destination pairs and 71 commodity groups, followed by distancedecay
gravity-modelling. Logistics costs were calculated by relating commodity-level freight
flows to the costs of fulfilling associated logistical functions. South Africa’s economy is highly
transport intensive. Excessive dependence on road freight transport exacerbates this situation.
Furthermore, the road freight transport’s key cost driver is fuel, driven in turn by the oil
price. Scenario analysis indicated the risk posed by this rising and volatile input and should
provide impetus for policy instruments to reduce transport intensity. As such, this study
concluded that a reduction in freight transport intensity is required to reduce exposure to
volatile international oil prices.
Description
Havenga, J.H., Simpson, Z.P., De Bod, A. & Viljoen,
N.M. 2014 South Africa’s rising logistics costs: an
uncertain future. Journal of Transport and Supply Chain
Management 8(1):1-7, (Art. #155), doi:10.4102/jtscm.v8i1.155.
The original publication is available at http://www.jtscm.co.za
The original publication is available at http://www.jtscm.co.za
Keywords
Transporation -- South Africa -- Costs, Freight and freightage -- South Africa -- Costs, Petroleum prices -- Prices -- South Africa
Citation
Havenga, J.H., Simpson, Z.P., De Bod, A. & Viljoen,
N.M. 2014 South Africa’s rising logistics costs: an
uncertain future. Journal of Transport and Supply Chain
Management 8(1):1-7, (Art. #155), doi:10.4102/jtscm.v8i1.155.