Logistics And Logistics Case Study

Key transport related challenges confronting logistics and supply chain managers

Introduction

It is no secret that with so many different modes of transport there is bound to be disadvantages and challenges that need to be faced in the supply chain. These challenges have all sorts of implications in the present as well as in the near future. Challenges range from local issues such as the instability in fuel prices and carbon emission requirements to cross-boarder issues that arise when delivering to other countries (Henderson 2014)

Volatile fuel prices

The volatility of fuel prices in South Africa has forced many business to re-evaluate logistics costs, as rise in the price will result to an upswing in various road and delivery costs.

But

Coupled with the continuous rise of petrol and diesel prices, this industry is heavily burdened and will not easily absorb a carbon tax.

The Carbon tax burden will fall largely on the road freight industry, which has low margins and keeps the wheels of the economy turning. The new tax laws are set to put a certain decline in South Africa's competitiveness even further. While the Road Freight Association probably agrees with the purpose and efforts to reduce greenhouse gas emissions and climate change, it is also strongly believed that South Africa cannot afford another tax.

Carbon tax will especially have an extremely serious impact on the cost of logistics, rendering road transport uneconomical, with over 80% of freight is currently moved by road. Transport costs are already unacceptably high – 14.6% of GDP as already indicated by a recent blog post (Dove Tail Business Solutions 2013).

Inconsistent loading and offloading times and delays at border

It has been recently highlighted (Henderson 2014) that loading and offloading turnaround times often exceed four hours for a linehaul vehicle, while delays at Beitbridge and Chirundu (Zimbabwe) averaging 24 to 48 hours heavily impact on cross-border turnaround times.

Cross border facilities have failed to conform and adapt with the massive increase in fleet activity over the past five to 10 years (Henderson 2014). Factors ranging from the lack of standardisation of documentation between regional governments to little to no incremental investment in facilities and other factors such as little training and increasing skills of staff and an insufficient number of officials results in the inefficiency of these border post which leads to delayed delivery and has an impact on the logisitical companies in