South Africa's logistics barometer
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A presentation done Professor Jan Havenga (Logistics Professor: Stellenbosch University), at the Transport Forum SIG: "Driving down cost in the Supply Chain" on 3 September 2015 in Durban, hosted by Transnet. The topic of the presentation was: "Logistics Barometer".
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South Africa's logistics barometer
- 1. South Africa’s Logistics Barometer Jan Havenga Department of Logistics Stellenbosch University
- 2. Logistics costs as a % of GDP – a 12 year time series
- 3. 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
- 4. South Africa’s logistics costs in perspective
- 5. Logistics cost components tracked over time
- 6. South Africa’s freight profile…. Current freight Future freight
- 7. 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
- 8. Tonne-kilometres by mode and typology
- 9. 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
- 10. 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
- 11. 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
- 12. Collaboration – 5 spheres • Freight owners • Logistics service providers • Infrastructure owners • State owned operators • Regulator 12
- 13. Maritime Cost Components Surface 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
- 14. 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 Index1979=100 World GDP World TEU
- 15. Containerisation propensity causes the “multiplier” to disappear 0% 10% 20% 30% 40% 50% 60% 70% %containerised Year Global trend for all freight
- 16. Container Penetration Factor (the Ceiling is 100%) 0% 20% 40% 60% 80% 100% 120% Ferrochrome Iron&steelbasicindustries Ferromanganese Wood&woodproducts Industrialchemicals Food&foodprocessing Otherchemicals Citrus Machinery&equipment Vegetables Transportequipment Paper&paperproducts Deciduousfruit Othermanufacturingindustries Non-metallicmineralproducts Motorvehicleparts&accessories Rubberproducts Metalproductsexcl.machinery Electricalmachinery Bricks Furniture Textiles&clothing Tobaccoproducts Pharmaceuticals&toiletries Cotton Printing&publishing Dairy Livestock(slaughtered) Subtropicalfruit Viticulture 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
- 17. 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 Index1979=100 TEU History Extrapolated (10 yrs history) Extrapolated (20 yrs history) Extrapolated (30 yrs history) GDP Index Commodity-based forecast
- 18. 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 Index1979=100 TEU History Extrapolated (10 yrs history) Extrapolated (20 yrs history) Extrapolated (30 yrs history) GDP Index Commodity-based forecast 100% containerised
- 19. 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 90 100 1820 1824 1828 1832 1836 1840 1844 1848 1852 1856 1860 1864 1868 1872 1876 1880 1884 1888 1892 1896 1900 1904 1908 1912 1916 1920 1924 1928 1932 1936 1940 1944 1948 1952 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 Tradeas%ofworldGDP GDP(trillion$)currentprices GDP (trillion $) current prices Trade as a percentage of GDP Iwasborn University Firstjob Relocalisation is real – the speed and disaggregation is still unsure
- 20. 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 Index=1990 Trade as a percentage of GDP GDP (trillion $) current prices Global container trade volume as percentage of global volume