The South African Treasury said in its Budget Review on Wednesday that there was a need to address the national logistics chain so as to reduce the cost of doing business in South Africa, improve customer service, improve the quality of the asset base and meet social and developmental objectives.
“The South African system of national logistics is characterised by escalating costs, bad service delivery, poor response to customer needs, and a weak skills base. The situation is further exacerbated by under-investment in infrastructure. Monopoly control within certain modes of transport, poorly defined institutional relationships and few incentives within the rail and ports to reduce costs give further rise to inefficiencies in the delivery of services” the Treasury said.
The cumulative result is high logistics costs to the economy and reduced international competitiveness, with the logistics costs as reported in the first annual state of logistics survey conducted by the Council for Scientific and Industrial Research represent 14,7% of GDP in South Africa, compared with 8,5% in the US economy.
In 2003, the South African Cabinet approved the creation of a task team to conduct an investigation into the state of national logistics and develop a national logistics strategy to realign the system to the needs of the economy.
Among the various issues being considered is the separation of infrastructure from operations, the roles of government and the private sector in national logistics and infrastructure provision, introducing competing operators across the spectrum of logistics services, and the enforcement of existing regulations.
The task team has consulted with key industry stakeholders regarding bottlenecks in the national logistics system and consultants have been commissioned to conduct further research.
A draft freight logistics strategy is under review by the Minister of Transport.
Areas proposed for focus in 2005 include a ports regulator, corporatisation of the National Ports Authority, the separation of infrastructure and operations within state-owned transport utility Spoornet, increasing the level of outsourcing and private sector funding in rail transport, establishing a framework for self regulation in road transport, and assessing the appropriateness of changing gross vehicle mass limits and licence fees for heavy vehicles.
Infrastructure has become a major bottleneck for the South African economy, with coal exports for instance dropping in both 2003 and 2004, while other coal exporting countries such as Australia have had volume gains in these years. – I-Net Bridge