Transport World Africa September/October 2014 by 3S Media

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COVER STORY ORY Y Renault Trucks: cks: Entering a new era a in Southern Africa ica

INSIDE

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THIS ISSUE E

Barbara Mo mmon, CEO Partnersh MCLI, – Ten ip for Progre Years of ss on the Maputo Cor ISSN 1684-7 946 Septem ridor P26 ber/Oct ISSNober 1684-7 2014 946 Vol.Mar/Ap 12 No.r 2013 5 / R50.00 Vol. 11 incl. VAT No. 2 / R40.00

REGULARS

incl. VAT

WAREHOUSING

Editor’s Comment Inspiration is everywhere! FESARTA Implementing uniform loads through Africa

2 5

Cover Story Renault Trucks: Entering a new era in

6 8

Southern Africa Regional News

COMMERCIAL VEHICLES 10 12

FAW makes history in South Africa Light commercials make light work

FLEET MANAGEMENT

Inventory movement and control

SUPPLY CHAIN LOGISTICS Fast-tracking growth in Africa

Enabling African growth and expansion

Managing change in supply chain evolution

SADC urged to take on the North-South Corridor

PORTS Mozambican port propelling the region forward

The quest for employee wellness Driving core values A great return on investment

14 16 17

TRAINING

The future of railway management in Africa

FUEL Finding the right lubricant at the touch of a button

Providing relief to skills-strapped industry

36 38

RAIL TECHNOLOGY 39

AIR CARGO

CORRIDORS A decade of partnered progress on the Maputo Corridor

Entering a New Ne w Er Era a in So

Renault Tuthern Africricaa rucks

July air freight volumes expanded

10 20

TWA | Sept/Oct 2014

EDITOR’S COMMENT

Inspiration is everywhere!

Publisher Elizabeth Shorten Editor Simon Foulds • simon@3smedia.co.za Head of design Hayley Mendelow Senior designer Frédérick Danton Designer Kirsty Galloway Contributors Raymond Abraham, Barney Curtis, Mario Landman, Barbara Mommon

Editor in action

VISIT A TRANSPORT OPERATOR and hear how they are uplifting their employees. I hear how an OEM is assisting the industry in empowering drivers to help improve the bottom line. I listen to CEOs from a diverse range of industries talk about the future and the growth potential in Africa. I speak to a transport operator who is buying trucks to meet the growing expansion of his company. I meet a car guard who is studying to be an engineer. Inspiration is everywhere. You do not have to look far to find it. I always find it amazing that, when times are tough, I come across inspirational stories that always have the effect of changing my mindset into a positive one. Yes, the tough times are still there but tackling them with a more positive attitude makes a world of difference. I have a friend who says they have stopped watching the news and reading newspapers because it is too depressing. There are inspirational stories out there and we need to feature these as well. Feel free to send me your inspirational industry stories. In this issue, I look at driver wellness, a competition geared towards uplifting truck drivers, a discussion at the recent Global Community Growth, Innovation and Leadership event between CEOs, 10 years of the MCLI, as well as managing change in the supply chain, inventory movement and control, plus the future of railway management. As always, a varied and interesting read. Enjoy!

Simon Foulds

TWA | Sep/Oct 2014

Chief sub-editor Tristan Snijders Sub-editor Beatrix Knopjes Client services & production manager Antois-Leigh Botma Production coordinator Jacqueline Modise Marketing manager Hestelle Robinson Digital manager Esther Louw Distribution manager Nomsa Masina Distribution coordinator Asha Pursotham Financial manager Andrew Lobban Administrator Tonya Hebenton Printers United Litho JHB • t +27 (0)11 402 0571 Advertising sales Hanlie Fintelman • h.fintelman@lantic.net t +27 (0)12 543 2564

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www.3smedia.co.za Annual subscription: R300 (incl VAT) subs@3smedia.co.za ISSN 1684-7946 © Copyright. All rights reserved. All articles herein Transport World Africa are copyrightprotected and may not be reproduced either in whole or in part without the prior written permission of the publisher. The views of contributors do not necessarily reflect those of the publishers.

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FESARTA COMMENT

by Barney Curtis, chief executive officer, FESARTA

Implementing uniform loads through Africa In 2011, the East African Community (EAC) carried out a project to determine the optimal load limits and overloading control procedures for East Africa.

HE PROJECT was carried out because East Africa had fallen a bit behind COMESA (Common Market for Eastern and Southern Africa) and SADC in keeping its Acts and Regulations up to date with these matters. It is an accepted principle between the three Regional Economic Communities (REC) in the COMESA/EAC/SADC tripartite alliance that, if one REC led a regional project, it would be done on behalf of the other two RECs. The other two RECs would participate in the project and hopefully adopt the outcomes of the project. Most of the outcomes of this project had already been adopted by COMESA and SADC, so there were only a few (e.g. super single tyre load limits) that these two RECs needed to adopt. This adoption is still outstanding. An important point from this project is that the EAC is a REC that produces Acts of Parliament that supersede the national legislation in EAC member states. This is unlike COMESA and SADC, which produce recommendations to member states. The outcomes from the project have already been included in a new EAC Act, and it now remains for EAC to draw up Regulations to give effect to the Act. It is very important that the right regulations are drawn up, not only because they will become law in East Africa, but also because COMESA and SADC should be adopting them as recommendations to their member states. A second important process underway in East Africa is the drawing up and signing of a Load Charter; an agreement between the transporters and authorities in the member states along the Northern Corridor (Kenya, Uganda, Rwanda and Burundi). The transporters are agreeing to abide by the load control legislation and the authorities are agreeing to treat the transporters fairly.

The Charter is almost ready for signing This Load Charter is in some ways similar to the earlier Load Accreditation Programme, now the Road Transport Management System (RTMS), in South Africa. It makes sense to use the experiences learnt from RTMS in the implementation of the Load Charter. With the above in mind, a workshop was held in Kampala, Uganda, on 18 and 19 August, in which all the related load limits and overloading control matters tabled and deliberated on. The workshop was hosted by the Northern Corridor Authority, and funded by the SubSaharan Africa Transport Policy Programme (SSATP). It is expected that the outcomes from the workshop will be used in the final recommendations/legislation for member states in East and Southern Africa. FESARTA held its AGM, also funded by SSATP, at the same venue on 20 August.

Barney Curtis TWA | Sept/Oct 2014

COVER STORY

RENAULT TRUCKS

Entering a “ W new era in Southern Africa

e are very optimistic about our prospective performance in the market in 2014,” says Herman Venter, general manager for commercial sales at Renault Trucks Southern Africa. “We are aiming to steadily increase our market share within the next 36 months.” Renault Trucks is present in over 100 countries with 14 000 employees globally. Although Renault Trucks’ primary focus is the design, manufacture and sale of commercial vehicles, it does a great deal more than that to ensure its customers’ satisfaction. It aims not only to advise customers during the decision-making and purchasing processes via recommendations, expert insight and financing solutions, but also to maintain customer service throughout vehicles’ operating lives.

This is a big year in the history of Renault Trucks in Southern Africa with the company launching two new product ranges in October.

TWA | Sep/Oct 2014

COVER STORY

Building on the legacy of more than a century of innovative French trucking know-how since 1894, Renault Trucks supplies transport professionals with the tools they need to more efficiently conduct their business. The company forms part of the Volvo Group, the world’s second largest manufacturer of commercial vehicles, which provides it with access to the best resources and expertise.

New ranges coming in October In October 2014, Renault Trucks SA will be introducing the new C-range intended for light construction and long haul applications, as well as the K-range, aimed at heavy construction applications. Renault Trucks currently has the successful Kerax, Midlum and Premium Loader ranges in its stable. The manufacturer is currently deploying significant resources to ensure that the new ranges deliver maximum reliability for when they are introduced into the country. They are undergoing exacting quality trials and are also being tested under actual operating conditions. Ruggedness, working comfort, payload, pulling power, new engines, low fuel consumption and easy body mounting all make these trucks the perfect tools for demanding construction businesses. The cab is one of the most striking features offered by these new robust vehicle

ranges it is more spacious, more comfortable and more ergonomic with its use of rotating buttons. A step on the side has been incorporated into the design, allowing drivers to easily check their loads. The vehicles will also offer failsafe ruggedness with reinforced protection for all exposed parts liable to suffer impacts. The design of the new Renault Trucks range of vehicles is dedicated to achieving efficiency. Renault’s designers have chosen to focus on the truck’s role as a tool serving fleet owners – a tool enabling them to carry out their assignments as efficiently as possible. Saving fuel has been a major component of the trucks’ design, resulting in the vehicles’ aerodynamics being modelled to obtain the highest possible air-penetration performance. “We believe Renault Trucks supports fleet owners, specifically in the construction industry, in their contribution to the development of the region’s economies. Trucks play a truly vital role in Southern Africa, not just in carrying goods but in ensuring that a vast range of services continues to operate,” says Venter.

Expert local support In South Africa, Renault Trucks’ dealer network is integrated with that of Volvo Trucks, and offers customers caring, innovative and efficient support. With the introduction of the new range, Renault Trucks SA will also reaffirm the brand’s commitment to its South African customers, with advanced service and aftermarket offerings introduced with the launch of the new product ranges. “As transport operators expand their operations throughout the region, we know our Renault Trucks dealers are there to capture this market demand and support customers every step of the way. We believe our dealers are experts in their field and completely customer-focused, and are able to provide our customers in the region with unparalleled support and service,” says Venter. “The new K and C ranges will create a completely new platform for Renault Trucks SA and set the brand for the future. We are working hard to put everything in place for the success for our customers.”

Renault Trucks dealers are there to capture this market demand and support customers every step of the way

MAIN IMAGE Renault Trucks Kerax LEFT Renault Trucks workshop

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TWA | Sep/Oct 2014

REGIONAL NEWS

Read more on www.transportworldafrica.co.za

SOUTH AFRICA

MOZAMBIQUE

Investment in road infrastructure Mozambique will unlock economic growth creates five toll

OVER THE NEXT financial year, the Department of Transport (DoT) says it will focus its energy on investing in developing the country’s road, rail, maritime and aviation infrastructure networks in order to help unlock the full potential of the economy. Sindisiwe Chikunga, Deputy Minister of Transport, says, “Integrating all forms of transport is key to economic growth.”

The DoT tabled the National Transport Master Plan at the end of the second quarter of the 2013/14 financial year, which Cabinet has since referred to the Inter-Ministerial Committee for consultations with the Presidential Infrastructure Coordinating Commission. The plan seeks to integrate different modes of transport, with the aim of bolstering economic activity and eventually growth. Chikunga adds, “With the DoT’s budget not able to fund road infrastructure development,

there is need for government to come up with funding models. “We have to find a way and actually begin to discuss the issue of funding models for infrastructure development, particularly roads. “We believe this is a discussion that all of us need to participate in so that we do not merely criticise when different funding models are introduced. We must be able to find the most effective funding model for our infrastructure development and support it.”

SOUTH AFRICA

Special economic zones roll-out ACCORDING TO THE DTI, the roll-out of special economic zones (SEZs) is on track. Dr Rob Davies, Minister of Trade and Industry, says, “Within the next three months, we will be passing all the regulations necessary to establish a SEZ board so that we can go ahead and establish SEZs. We have already fast-tracked a couple of them.” Earlier this year, President Jacob Zuma approved the Special Economic Zones Bill. The Bill, which supports a broader-based industrialisation growth path, also aims to support balanced regional industrial growth and the development of more competitive and productive regional economies. “Simultaneously with processing the legislation, we

TWA | Sep/Oct 2014

embarked on a process, together with the provinces, of conducting feasibility studies on potential SEZs, some IDZs (industrial development zones] and the other forms provided in the Act.” Public consultations are underway for the Harrismith Trade Port in the Free State to become an IDZ. To date, five IDZs have been designated, which are Coega, East London, Richards Bay, O.R. Tambo and the newly designated Saldanha Bay, in October 2013. Work is also well advanced on industrial sector SEZs, including two potential platinum value chainbased SEZs – one in the North West and another in Limpopo.

roads FIVE NEW TOLL ROADS in Mozambique look set to be operational before the end of the year. Affected are the Matola/Boane, Marracuene/Lindela, Vanduzi/Changara, Nampula/Nacala and Monapo/Ilha de Moçambique roads. Cadmiel Muthemba, from the Mozambique Ministry of Public Works and Housing, says, “The development of public-private partnerships with the exclusive participation of national companies will enable those sections to be maintained by consolidating the user-payer concept. Only two toll roads currently operate in Mozambique – in Maputo province, managed by South Africa’s Trans African Concessions, and in Tete with Estradas do Zambeze.

EAST AFRICA

$223.5 million to boost trade TRADE IN the East African Community has been given a boost by the African Development Bank (AfDB) agreeing to fund the upgrade of a busy regional road key to increasing the movement of goods in the region. $223.5 million has been granted by the AfDB for the project. The road being upgraded runs from Taveta to Voi in Kenya and is being rehabilitated to create another major transport corridor in the region. This will then link the Port of Mombasa with northern Tanzania and landlocked countries in the region. Source: AllAfrica.com

REGIONAL NEWS SOUTH AFRICA

Increased support for automotive sector SUPPORT FOR THE automotive sector is set to increase says Rob Davies, Minister at the Department of Trade and Industry. Davies was speaking during the DTI budget vote in Cape Town. “First, we see acceleration in the automotive sector, where the Automotive Production Development Programme (APDP) has already supported significant new investment in the sector. Projected capital expenditure for 2014 is anticipated to reach a record level of R7.9 billion.” The work of the APDP has been acknowledged by big industry role players, such as the National Association of Automobile Manufacturers of South Africa, who have largely attributed the relatively high levels of capital expenditure to this programme. The APDP’s objective is to raise the volume of cars manufactured in South Africa to 1.2 million annually by 2020, as well as to diversify the component chain. Adds Davies, “In the coming year, the APDP will undergo an early review. This will make us take stock of efforts and determine what more can be achieved in growing the industry in South Africa.” In other efforts to grow the sector, the Automotive Supply Chain Competitiveness Initiative was launched last year to enhance localisation, production and supplier capabilities. According to Davies, this was proving to be a success and his department would continue to expand the programme. “Since the introduction of the Automotive Investment Scheme (AIS) in 2010/11, public sector-approved incentives amounted to R6.3 billion and supported investments worth R23 billion by original equipment manufacturers in the automotive sector. “The intention of the AIS is to grow and develop the automotive sector through investment in new and replacement models, as well as the manufacturing of automotive components. The objective here is to increase plant production volumes, sustain employment and strengthen the automotive value chain. “Given that automotive comprises 30% of our industrial sector, with strong linkages to other manufacturing sub-sectors, the impact of such investment on our domestic economy is significant.” Davies says the automotive sector employs over 100 000 people and concludes, “It is an important sector that we will continue to support.”

Rob Davies, Minister at the DTI

KENYA

Enhancing efficiency at Mombasa port THE MOMBASA Port Community Charter (MPCC) is being launched in East Africa, aimed at enhancing infrastructural development and improving efficiency in clearing cargo. The MPCC brings together 24 agencies to both coordinate and improve efficiencies at the port. Once the MPCC is implemented, it is envisaged that it will lead to doubling trade in the region to KSh2.9 trillion (R350 billion) by 2016. It is also expected to enhance the flow of transport along the Northern Corridor from the port through to

SADC

East Africa update TRADE MARK EAST AFRICA, which is instrumental in assisting countries in East Africa improve the free flow of freight through the region, gives TWA an update on what is happening in the region. Northern Corridor Importers and businesses in Rwanda and the rest of the Northern Corridor can soon expect timely and efficient services at the Port of Mombasa. This follows the signing of the Mombasa Port Community Charter by Kenya and the regional public and private agencies involved in port affairs. The charter, signed at the Port of Mombasa, is expected to improve efficiency and boost trade across East Africa. The charter will, among others, aid the establishment of logistical and transport infrastructure, improve operational efficiency and facilitate regulation and oversight engagement. Karin Andersson, chairperson of the board of TradeMark

Uganda, Rwanda and Burundi. The commissioning of Berth 19 at the port is set to increase the container handling facility. The development of the new berth, which commenced in July 2011, has seen the total quay length of the Mombasa Container Terminal grow to 840 metres. Construction is also underway for a second container terminal at the port, which will have a capacity of handling 1.2 million twenty-foot equivalent units annually. The Port of Mombasa connects the Northern Corridor markets, including Kenya, Uganda, Rwanda, Burundi, Southern Sudan and the eastern DRC.

East Africa, said the port, being the gateway to numerous countries, will ease the cost of doing business. Customs The single customs territory (SCT), whose major objective is to overcome the hurdle of slow and costly movement of goods and services and also improve the business environment in the region, is yet to be fully operational even after the lapse of the 1 July deadline. In the Northern Corridor, the SCT project has moved on from its lengthy pilot stage to an advanced stage, but not all goods have been added onto it. Tanzania and Burundi, which make up the Central Corridor, began implementation on 1 July but are piloting with only a few products. Border posts Local and regional traders using the Tanzania-Burundi border post will no longer spend much time crossing the border, under a pilot basis implementation of the One-Stop Border Post in Kabanga,Tanzania, and Kobero, Burundi.

TWA | Sep/Oct 2014

COMMERCIAL VEHICLES

FAW makes history in Coega IDZ, and surrounding areas in the Eastern Cape, is set for substantial growth after FAW Vehicle Manufacturers South Africa officially opened its vehicle manufacturing plant in July this year.

HE OPENING OF THE latest expansion in local vehicle manufacturing marked a historic moment in the South African automotive industry. As the first South African-built FAW commercial vehicle rolled off the assembly line at the FAW Vehicle Manufacturers South Africa production plant at Coega, Jacob Zuma, who officiated the opening, said the new plant was indicative of a positive future for the industry. “This is the culmination of a $60 million investment in the Eastern Cape, as well as the start of resurgence in the primary automotive industry, second-tier industries and the creation of many new jobs.” President Zuma said: “Following our BRICS trade agreements, this massive investment by a Chinese corporation augurs well for the future of the partnership between our countries. “The establishment of the FAW Coega plant has the added advantage that South Africa remains seen as an investment target of choice. This is an example to other global companies, which can rest assured that the South African government is doing everything possible to maintain its world-class offering as a springboard into unlocking the potential of the African continent,” said Zuma. “Our focus in the next five years is to provide a sustainable energy mix for the country. Energy security is key to enhancing South Africa’s global competitiveness. President Jacob Zuma “As far as the current strike in the metal industries is concerned, I trust that this will be resolved amicably, without violence, reaching a speedy resolution. This is in the interest of all of South Africans,” Zuma continued. “Opening the FAW plant here in Coega will remain a remarkable example of the positive cooperation that we as South Officiating the Africans can attract from foreign invesopening of the historic FAW tors. It is imperative to job creation, manufacturing our growth and future prosperity,” plant in Coega Zuma concluded. earlier this Minister of Trade and Industries Rob month – Mr Qin Huanming, vice Davies, in his address, indicated that president of the FAW’s decision to build commerChina FAW Group cial vehicles locally from completely Corporation, knocked down kits (CKDs), being President of the Republic of South the first OEM to do so across its Africa, Jacob entire range in South Africa, is a clear Zuma, and Harris indication that Government’s immiMoodley from nent plan to extend the Automotive FAW South Africa

“This massive investment by a Chinese corporation augurs well for the future of this partnership between our countries.”

TWA | Sep/Oct 2014

Production Development Plan to the commercial vehicle CKD manufacturers, bus manufacturers and local component manufacturing industry, will attract further expansion in the automotive industry. Qin Huanming, vice-president of the China FAW Group Corporation, said: “As a shining pearl on the African continent, South Africa enjoys sound political, economic and legal systems, as well as excellent infrastructure and abundant labour resources. These favourable conditions have strengthened FAW’s confidence to invest in South Africa.” The decision to build the FAW plant in South Africa was very significant from a global perspective, as it is one of the most important and largest investments made by a Chinese entity in South Africa to date. The total investment was financed by China FAW Group Corporation and the China-Africa Development Fund together with FAW Africa Investment Company. This collaboration speaks volumes to the growing interest from global Chinese industry in unlocking the true African potential.

A number of firsts for FAW Vehicle Manufacturers South Africa At a cost of $60 million towards the establishment of the modern, high-quality vehicle production plant and its entire associated infrastructure, it is truly the largest recent vote of confidence in the local vehicle industry. The Coega plant with its build capacity of 5 000 units per annum, represents the first high-quality Chinese manufacturer to set up and contribute on this scale in the Eastern Cape region. FAW Vehicle Manufacturers South Africa is the first OEM to locally build its entire range

COMMERCIAL VEHICLES

South Africa of commercial vehicles sold here; 14 models spanning the medium, heavy and extra-heavy commercial vehicle segments. Henceforth all FAW trucks in South Africa can carry a badge of honour: ‘Made in South Africa’. Future plans include the commissioning of a body-building facility at the Coega plant. Tipper truck bodies, mixers and customised trailers will be built in the facility, adjoining the main plant. FAW will be the first South Africa-based OEM to offer its body-building facility to other commercial vehicle manufacturers. Originally announced in 2012, the decision to construct the local FAW plant was not one that was taken lightly, explained FAW Vehicle Manufacturers South Africa: “We could have gone to Kenya or Tanzania, where FAW has been present in sales and service for over 30 years. In the end we chose South Africa because of the infrastructure. It then came down to a choice between East London and Coega.” In the end Coega was chosen because, “the infrastructure is perfect.”

The first phase of the Coega plant, covering 103 000 m2 of land and a 28 000 m2 plant – complete with training facilities – allows the company to provide its extensive client base with a sense of pride and patriotism by buying local. The plant will ramp up to produce 5 000 trucks per annum, supplying trucks to the South African market, as well as to the rest of Africa, in both right- and left-hand-drive derivatives. Plans in place estimate that 40% of production will be destined for the South African territories, while 60% will be exported. FAW remains positive about the future and the growth plan that has been formulated for the FAW brand in South Africa. FAW, internationally, rose as a result of the political dispensation in China, which allowed more free-market enterprise and encouraged overseas exports. “As China grew then, so will Africa grow now, and FAW is ideally placed to benefit from the demand for vehicles on the continent as we have established a solid presence, www.faw.co.za where it counts,” concluded Qin Huanming.

TWA | Sep/Oct 2014

COMMERCIAL VEHICLES

Light commercials make Operators are spoilt for choice when choosing a light commercial vehicle for their operations. Simon Foulds speaks to GWM, Ford, GMSA and Nissan to ﬁnd out what we can expect from them over the next few months and why their vehicles are best suited to your business. New vehicles over the next twelve months

Hannes Oosthuizen

Hannes Oosthuizen – brand manager at GWM HO: There are a number of changes coming to the Steed line-up, including a new diesel engine, special edition off-road-oriented models, and additions at the top aimed at the leisure market. We are confident that we will soon be offering the most complete and extensive pick-up lineup available in the South African market. Note that many derivatives of the current Steed 5 will continue, even with the addition of new Steed 5E and Steed 6 models.

Veralda Schmidt – manager: media relations at Nissan VS: We have just introduced our new Patrol pickup into the market. This follows hot on the heels of the NV350 panelvan and NV350 Impendulo taxi. The NV200 seven-seater combi and panelvan was launched last year. Existing light commercial vehicles such as the NP200 pickup, NP300 hardbody pickup and the Navara pickup are also holding their own in the market.

Optimistic about the road ahead

Dawid van der Merwe

Ian Nicholls

Dawid van der Merwe – fleet operations manager at Ford South Africa DvM: We are launching an exciting new line-up of vehicles that will expand our commercial vehicle fleet substantially. We will be entering the two-tonne sector with the introduction of Transit, which will be available in panel van and chassis cab derivatives. We will also be introducing the 12- and 18-seater Tourneo bus. A new derivative of the Ranger, specifically designed for heavy duty work, is also on the cards in the next 12 months. More will be revealed later this year. Ian Nicholls – vice-president of GM South Africa Operations at GMSA IN: We launched the sixth-generation Isuzu pickup into the South African and south-east African markets during the first half of last year. The pickup was launched in East Africa earlier this year and is in the process of being launched to our left-hand-drive markets in sub-Saharan Africa. The sixth-generation pickup is assembled at our vehicle assembly plant in Port Elizabeth. Additionally, we build and sell the sub-one-tonne Chevrolet Utility, which has led in its segment of the market for over 9 years in a row.

TWA | Sep/Oct 2014

HO: Yes, the South African love affair with pickups will continue, because they fit the way we as South Africans work and play. Cost is a worry – as these vehicles are becoming increasingly more sophisticated, costs are going up and affordability may become an issue. Manufacturers will have to find ways to address this at the lower end, which isn’t always easy because most of these vehicles are developed with other markets in mind. DvM: We want to offer our customers – whether they are fleet customers or those buying passenger vehicles – the full range. With almost 70% of all new vehicle sales going to fleet buyers, the fleet sector is a big segment within the overall motor industry. There is huge potential with the increased focus and support to develop business within South Africa and the SADC states. With an extensive product line-up, Ford can accommodate individual fleet requirements no matter the size of the fleet. IN: In many of the markets in Africa, light commercial vehicles are a dominant force and this will continue to be the trend in the future. We are also currently looking at opportunities to grow production volumes from South Africa into new markets in Africa – with a key focus on the light commercial vehicle segment. The sixth-generation Isuzu pickup, which is assembled in both right- and

COMMERCIAL VEHICLES KZN

light work left-hand-drive versions at our South African production plant, forms an important part of our growth plans on this continent. We anticipate that this segment will grow in the future as more African countries stabilise and accelerate investments into infrastructure and other areas of the economy. Transport currently accounts for over 45% of infrastructural investment (into roads, ports and so on) on the continent. In South Africa, we secured a 20% share of the overall light commercial vehicle market in 2013 and hold a similar share level this year. VS: Yes, we are optimistic. The Nissan LCV range is the most comprehensive in the market starting with the NV200 half-tonne pickup right through to the class-leading Patrol pickup with a payload of 1 090 kg and a towing capacity of 2 500 kg. Couple that with the NP300 hardbody workhorses and the tough and attractive Navara and there is a pickup for every businessman or private owner. The two vans, NV350 and NV200, are extremely versatile as panel vans and come in very comfortable people movers for the hospitality and transport industry.

New technology for efficiency HO: As with passenger cars, the focus will increasingly be on smaller-capacity turbocharged diesel engines. At present the focus is on our 2.0 litre VGT power plant, which features such green technologies as exhaust gas recirculation, variable geometry turbocharging and common-rail direct injection. It meets Euro IV emissions standards. A six-speed manual transmission further improves the fuel economy potential. Our new â&#x20AC;&#x2DC;entry-levelâ&#x20AC;&#x2122; diesel engine will also be of a 2.0 litre capacity. DvM: Our Transit and Tourneo ranges have impressive fuel efficiency, with combined fuel consumption from as low as 7.0 litres/100 km and CO2 emissions of only 186 g/km. The vehicles also feature a shift indicator, advising drivers when to change gear for maximum fuel efficiency. IN: The exterior styling of the new KB benefits from extensive computer analysis of the airflow around the vehicle supported by fullscale wind tunnel testing to prove the theory in practice. A key area of aerodynamic focus was the airflow over the roof and load box of

the vehicle, a known critical area. On the new KB, this critical airflow has been smoothed to flow cleanly over the tailgate with reduced drag. This has a positive impact on fuel economy and performance while reducing noise levels in the cab. As with the previousgeneration Isuzu KB, the sixth-generation KB range is powered by a selection of the latestgeneration diesel and petrol engines. VS: Our light commercial vehicle sport all the latest safety technologies, class-leading fuel consumption and DataDots come standard on all Nissan vehicles.

Advice when purchasing new light commercial vehicles HO: When it looks too good to be true, it generally is. GWM is not the cheapest offering on the market and the closing price gap is reflected in the high quality of the vehicles. You may be able to find cheaper offerings, but what about back-up and support? DvM: Total cost of ownership is key when considering a vehicle for your fleet. One should consider the full service offering such as comprehensive warranties like Fordâ&#x20AC;&#x2122;s four-year/120 000 km fully comprehensive manufacturer warranty and free three-year AA assistance one gets with every Ford product. Competitive pricing on maintenance, service and collision parts will also assist in lowered fleet costs. A national dealer network is also important, ensuring fast and comprehensive support throughout our borders. IN: Select a vehicle that is durable, reliable, has a strong reputation and is backed by outstanding levels of support both from a sales and service perspective. The Isuzu pickup offers this and more, including an excellent residual value and an affordable overall cost of ownership experience.

TWA | Sep/Oct 2014

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FLEET MANAGEMENT

The quest for employee Bakers SA, a prominent transport logistics company in KwaZulu-Natal, became the ﬁrst ﬂeet company to complete the roll-out of the Fleet Owner Workplace programme designed by Mercedes-Benz South Africa and their corporate social responsibility partner, Corridor Empowerment Project (CEP). Simon Foulds attended the launch of this event at Bakers SA’s head office in Pietermaritzburg.

HE AIM OF THE programme is to assist fleet owners in taking a holistic approach to employee health and wellness, based on a proven model. Collaboration embodies the ethos of MBSA, as the company strives for the sustainability of the transport sector in South Africa, with employee well-being being central to this. The Fleet Owner Workplace programme is essentially an extension of the MBSA workplace wellness strategy that has entrenched the health of the company’s employees for over a decade, adding to the automotive giant’s ability to achieve profitable growth and contribute to the socioeconomic success of the country. MBSA’s leading role in this regard started in the late 1990s in response to the debilitating effect of HIV

and Aids on productivity, and has since expanded in focus to encompass health and wellness more holistically. This includes a focus on lifestyle ailments such as cardiovascular diseases, cancer, diabetes and chronic respiratory diseases. Dr Clifford Panter, manager for Health, Safety, Compensation and Benefits at MBSA, says, “Our drive for excellence translates into benchmark achievements in the field of occupational health and safety. However, pockets of excellence can never be sustainable. So, for more than two decades now, we have made it a mission to share the lessons we have learned around employee health management with businesses and communities around us. This is based on our first-hand experience of the benefits of a healthy workforce to the sustainability of our business.” Examples of this mission are the Siyakhana and Trucking Bakers SA celebrated the signing of their Workplace Wellness policy with Wellness projects that MBSA has supported as part of its stakeholders involved in the Fleet Owner programme initiated by MBSA. (from corporate social responsibility programme for many years. left) Mpho Nkhumeleni, sales manager, Daimler Truck and Bus; Tersia Stroh, The former lends workplace wellness support to small and acting national secretary, National Bargaining Council for the Road Freight medium enterprises around MBSA’s production plant in and Logistics Industry; Abdool Tayob, chief executive, Bakers SA; Shabir Tayob, director: marketing and logistics, Bakers SA; Mayur Bhana, divisional manager: East London; the latter targets the road freight industry in group corporate affairs, Mercedes-Benz South Africa; Themba Mthombeni, collaboration with partner CEP. operations director, Corridor Empowerment Project The concept for the Fleet Owner Workplace programme came about as a result of MBSA’s involvement in the Trucking Wellness project, an initiative of the National Bargaining Council of the Road Freight and Logistics Industry, which provides education and basic health care services to truck drivers along the major freight routes in Southern Africa. This includes dissemination of information, testing and treatment of HIV and Aids and other KEY OUTCOMES OF THE FLEET lifestyle illnesses. OWNER WORKPLACE PROGRAMME: • Increase understanding around, and reduce A need was identified the impact of, HIV and Aids and other to provide a more holistic lifestyle diseases approach to the manage• Increase capacity to prevent and ment of health and wellmanage disease ness by the fleet owners. • Benefit employee health, life expectancy and job retention As a provider of transport • Informating, educating and screening around solutions to the freight health issues industry, MBSA is able to • Assist fleet owners to develop, implement, support fleet customers monitor and evaluate a sustainable and their truck drivers with Workplace Wellness programme (including the development of policies, systems additional benefits that will and processes) enhance their profitability.

TWA | Sep/Oct 2014

FLEET MANAGEMENT

wellness Kobus van Zyl, MD of Daimler Trucks and Buses South Africa, states, “South Africa’s trucking industry forms the veins and arteries of the economic heart of this country, pumping prosperity to our people. The accomplishments of the trucking sector are also the success of Daimler Trucks and Buses South Africa, as a flourishing commercial vehicle supplier. We cannot disregard the varied issues that affect the larger trucking community. Healthy, skilled truck drivers are but one of the ideals we have chosen to throw our weight behind as a corporate thought leader. With our ongoing commitment to the sector, our slogan, ‘Trucks you can trust’, is easy to translate into a mantra for the industry, ‘Truckers you can trust’.” MBSA also provides its commercial vehicle customer base with dedicated driver training programmes that equip truckers with product knowledge to enhance safety and reduce the cost of vehicle ownership. The valueadd for MBSA clients does not end there, however, with products such as the Fleetboard telematics systems and Charterway fleet management services further reducing the downtime of fleet vehicles.

LEFT Shabir Tayob, director: marketing and logistics, Bakers SA (left) and Abdool Tayob, chief executive, Bakers SA (right), receive a certificate for participation in the Mercedes-Benz South Africa Fleet Owner Workplace Wellness programme from Mpho Nkhumeleni, sales manager, Daimler Truck and Buses SA RIGHT Abdool Tayob, chief executive, Bakers SA (centre), is joined by Johan Opperman, Bakers SA National SHEQ Manager (left), and staff members from the Workplace Wellness Committee in signing the policy that now governs employee wellness in the company

Bakers SA, as the first MBSA client to implement the Fleet Owner Workplace programme, shares the company’s commitment to employee well-being. Abdool Tayob, chief executive of Bakers SA, says: “This initiative forms one of the many components that testify to the partnership relationship shared between Bakers SA Limited and MBSA. Furthermore, this is a manifestation of MBSA’s concern for the health of professional drivers that operate their exceptional products.” TWA | Sep/Oct 2014

FLEET MANAGEMENT

Driving core values Safety is one of Volvo’s core values. Simon Foulds speaks to Philip Phasha, driver training manager at Volvo, about eliminating driver fatigue and safety. How critical is driver wellness within the transport and logistics sector?

Is it important just for longdistance truck drivers, or also for inner-city truck drivers?

Driver wellness is crucial. If you have a driver who is not well, this could impact the fleet operator’s business.

It is important for any driver behind the wheel of a truck.

How important is it to have a healthy driver behind the wheel of a truck and why? It is very important. If a driver is unhealthy, they will not concentrate and this will affect their ability to do their job and perform at their best. Back left: Johannes Thabana, Solly Ncala, Timothy Sibisi, Gregory Makhudu, Rubik Stevens, Phillip Phasha, Hadley van Ster From left: Alvin Naicker, Gareth Quiens, Solly Mampho, Zama Skosana

What are you doing to improve and increase driver wellness? At this stage, Volvo does not have a formal programme for driver wellness, as most of the training is around product knowledge. We are in the process of improving our training programme to include classroom-style training with a focus on health and first-aid training.

What are the best ways to both educate the driver and transport operator on the importance of driver wellness? Fleet owners should have induction sessions for their drivers, which should include a wellness programme that reflects the benefits of living a healthy lifestyle.

What part do you play in training drivers and why? At Volvo Trucks, we ensure that drivers understand how to use our products efficiently so it can meet fleet owners’ expected results. At the vehicle handover, we have highly informative basic driver training, which includes:

• defensive driving techniques • fuel consumption • safe load securing. The vehicle’s handbook is customised to the chassis so the driver knows all the vehicles’ intricacies. We also offer Train the Trainer training should a big fleet company require it. There we will cover: • driver recruitment • presentation skills • driver incentive schemes • how to deal with accident reporting • vehicle pre-trip checks • basic training with annual refresher courses should the fleet company require it.

What are the advantages to the company in doing this kind of training and, once completed, how often, if at all, are the drivers retrained? The advantages are that the company’s fleets will have a longer lifespan. Training leads to sustainable business and lower operation costs. Volvo provides on-the-job training at the handover of the vehicle. Once it is completed, we have a refresher course every two years at the fleet owner’s request. Although the training contributes to personal development, the challenge is the high turnover of drivers in the industry.

What advice would you give to a transport operator who wants to improve the wellness of their company’s drivers? Companies should revisit the working conditions of the drivers, including resting areas, and ensure that these facilities are hygienic and safe to use. They should make sure drivers have balanced shifts and long hours should be monitored. They should also ensure that drivers go for routine medical check-ups.

TWA | Sep/Oct 2014

FLEET MANAGEMENT

A great return on investment Alexander Taftman, product ct and marketing director at Scania South Africa, tells Simon mon Foulds why Scania’s driver competition is beneﬁcial to everyone.

CKNOWLEDGING the driver is critical because, according to Taftman, the driver is the most important component in the transport machinery. “It is not simply a case of just driving a truck from point A to B. The driver plays a critical role in ensuring the total operating costs of the vehicle are kept down to a minimum. “The driver can influence up to 60% of the truck’s total operating costs. Therefore, with continuous training, the driver will have a positive impact towards the bottom line of a transport operation.” Scania’s Driver of the Year competition takes place every second year and this year’s one took place in five regions within South Africa, as well as in Namibia, Botswana and Tanzania. “With this event, we want to put the focus on the driver, giving him the publicity he so justly deserves.”

PRIZES First place: R50 000 voucher for a big department store Second place: R30 000 competing in this competition is voucher empowered to be a better driver Third place: R15 000 voucher and that is what he takes back Fourth and fifth place: R5 000 voucher to the company he works for. “The whole point of the comThe transport owner whose driver wins the competition petition is to teach the drivers how to be gets a R250 000 discount a positive force within a company and on the purchase of his next ensure they play a positive role in containScania truck or the use of a ing overall operating costs. Not all of the Scania rental truck for free for drivers can win but each one learns how six months. to be a better driver. Plus, they also leave with relevant information regarding their health and wellness – which is also a critical factor for every driver and transport operator.”

We want to put the focus on the driver

Total operating costs For the 2014 competition Scania measured driving skills and truck knowledge and brought total operating costs into the equation. “It is actually quite interesting when an operator looks at the total operating costs as a pie chart, and sees how much of it can be affected by the driver behind the wheel of the truck. So, if you look after the driver and motivate him, he can be a great return on investment for your transport operation.

Educational event “Why have we done this as a competition? It is for the excitement and adrenaline and simply because it is fun.” The event started with qualifying theory tests in April from where the regional finalists were selected to progress through to the regional heats and finals. The top three drivers from each region will compete in a national final in Johannesburg during October.

Optimising customers operations “During this competition we mixed theory with practical tests to choose the top 24 Scania drivers. Every driver

Transport solution optimisation Another key aspect of this event is empowering the driver to be aware of what to look out for when doing a vehicle and trailer inspection. “Every driver should do a preinspection check before every trip, because they are then able to point out to their managers if they see any potential faults with the vehicle. This ensures less downtime due to either a breakdown or an accident. “During the competition we empower drivers on what to look out for to ensure the truck they are going to drive is safe use. This enables them to advise the owner or maintenance department if there is a fault with the vehicle between service intervals, ensuring minimal downtime. “At the end of the day, this event ensures each and every company whose drivers participated sees a better and improved driver, which is a win-win situation for everyone, including fellow road users.”

TWA | Sep/Oct 2014

FUEL

Finding the right lubricant at the touch of a button Using the right lubricant not only protects and prolongs the life of vehicles and equipment, but can also help save on maintenance and fuel costs. By Raymond Abraham, commercial technical manager: Shell South Africa

HELL’S ONLINE TECHNOLOGY is helping businesses tap into its expert technical information to match the right lubricant to their vehicles and equipment. Originally designed for use by Shell’s own technical staff, this information is now available to customers globally – giving them instant access to a vast bank of data on engines, lubricants and oils, including the quantities required and oil drain intervals. The service is quick and easy to use: by simply logging on to the Shell LubeMatch site, customers can select the vehicle or equipment type and make or model from an extensive database. This generates an instant report,

TWA | Sep/Oct 2014

recommending the best lubricant to help that particular equipment to run smoothly. The lubricant recommendation can be printed out. LubeMatch has been developed together with original equipment manufacturers’ recommendations. LubeMatch can be found for most types of vehicles and equipment from cars, motorcycles and trucks to buses, vans, tractors, heavy machinery and industrial equipment. Built around a deep knowledge of the operation and lubrication needs of heavy-duty diesel engines, Shell’s scientists and engineers have developed a range of lubrication products using technology that adapts chemically and physically to the changing conditions within the engine.

FUEL

Certain heavy-duty diesel engine oils can improve fuel economy by reducing frictional and pumping losses. It is crucial that the oils also provide the right level of protection to avoid engine wear. Working in its laboratories and with leading companies and original equipment manufacturers, the company has clearly demonstrated the benefits that highquality fuel economy oil can bring. Shell Rimula heavy-duty diesel engine oils provide protection in three critical areas: acid control, deposit control and wear control. Its adaptive technology also provides reduced viscosity for improved fuel economy. Quality lubricants are essential, as low-quality oils may fail to protect vital components from combustion acids that escape into the crankcase in the engine, leading to corrosion that may cause catastrophic engine failure. Shell Rimula oils contain powerful antioxidant agents that adapt chemically to neutralise acids before they can damage the oil and engine. Dirt in the engine – whether it’s piston deposits or crankcase sludge – can also reduce its efficiency and increase fuel costs. Shell Rimula diesel engine oils contain molecules that adapt to remove and stop deposit-forming particles from coming together to form sludge, to help keep engines clean and protected. Low-quality oils may fail to keep components apart, which can cause hot spots, excessive wear and high maintenance costs. Shell Rimula diesel engine oils have adaptive

molecules that are designed to protect the engine by reacting under heat and pressure to form a protective film that helps to reduce wear. This three-way protection has put Shell Rimula diesel engine oils at the forefront of the development of lubricants that enhance fuel economy and equipment protection in the toughest conditions. In another innovative move, the new Shell miGarage mobile app allows customers to find the best lubricants for their vehicle or equipment using Shell LubeMatch, with additional benefits. The app makes it possible to email a recommendation directly from a mobile device and access previous vehicle or equipment searches with a ‘last searched’ functionality. It also allows customers to save their favourite vehicles or equipment to allow for fast access to lubricant recommendations. Customers can also keep up to date with all the latest Shell Lubricants news, promotions and product information and even use their mobile device as a torch, using the app’s built-in LED flash (available for devices with camera flash only). This is just another way Shell is using technology to make it easier for its customers across the globe to save on fuel and maintenance costs.

THE AUTHOR

RAYMOND ABRAHAM is Shell South Africa’s commercial technical manager

TWA | Sep/Oct 2014

PAGE STRAP CORRIDORS

A decade of partnered progress on the Maputo Corridor In February 2004, MCLI issued its ﬁrst formal press release. Within, it explained that a “new private sector group has taken a bold initiative to promote the Maputo Corridor as a ﬁrst choice transportation route linking South Africa’s landlocked northern provinces and neighbouring states to world markets.”

ORMER SOUTH AFRICAN President, Nelson Mandela, and the then President of Mozambique, Joaquim Chissano, soundly established the framework for the development of MCLI when they jointly launched the Maputo Development Corridor at an investment conference in Maputo in June 1996. The launch of the Maputo Development Corridor (MDC) came at a time of pressing economic growth imperatives from a Mozambican economy ravaged by 15 years of civil

PROUD SUPPORTER OF THE MCLI

TWA | Sep/Oct 2014

war and a newly liberated South Africa emerging from decades of economic isolation. The MDC emerged as the response to these imperatives and aimed to stimulate regional cooperation and economic integration by restoring the traditional trade route linking South Africa’s landlocked northern provinces of Gauteng, Limpopo and Mpumalanga to their nearest port in the Mozambique capital of Maputo. The port had suffered a sharp decline during the civil war and was in dire need of rehabilitation. The Maputo Development Corridor had four key objectives: • rehabilitating the primary infrastructure network along the corridor, including road and rail links between South Africa and Maputo, the border post and the port of Maputo • maximising investment in the potential of the corridor area and in added opportunities that infrastructure rehabilitation would create • maximising the social development and employment opportunities on the corridor and increasing participation of historically disadvantaged communities • ensuring sustainability by developing policy, strategies and frameworks that ensure holistic, participatory and environmentally sustainable approaches to development. In line with the SDI framework, which was to rehabilitate and re-establish the traditional trade route between South Africa

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CORRIDORS

and Mozambique, which had been destroyed during the 17 year civil war in Mozambique and during the isolation of South Africa during the apartheid years, the MDC became the foundation for the work of MCLI. With an initial investment in rehabilitation of basic infrastructure in Port Maputo and the completion of the N4 toll road from Gauteng to Maputo, the environment was perfectly poised for trade to begin to return to this traditional route from Gauteng. It was a meeting of stakeholders that were gathered at short notice from all across the corridor that began this initiative and which resulted in the development of an organisation that has reached its 10-year mark and has taken its model to 29 countries around the world. In the first meeting at City Deep Terminal in August 2003, and a similar meeting in Nelspruit in early September 2003, stakeholders from Mozambique and South Africa, from both the public and private sector, identified the opportunities and constraints impacting on the use of Port Maputo, the terminals, the road and the railway line. The key issues that were identified were: • negative perceptions about Port Maputo • no container lines calling the port • lack of rail service on the corridor • limited border operating hours • congestion and delays • lack of an institutional framework on the corridor. It was these issues that were the core reason for MCLI’s establishment and, added to the mandate of these first stakeholder meetings, was sufficient for the infrastructure investors, cargo owners, and service providers to commit to setting up an organisation to deal with these constraints. At MCLI’s inception in 2004, there were initially eight founder members. These eight companies saw and acted on the need for a coordinated effort on behalf of the business sector to present to government the requirements for sustained investment into the MDC. A joint effort was undertaken by these organisations to expand their individual focus into a synergistic effort for the greater good of all parties. These companies do indeed represent a cross section of key players, either along the MDC or in their particular industry sectors in the region. It was recognised from the outset that in order for the Initiative to be successful, the public sector needed to be represented on the MCLI board. The South African National Department

MCLI’s success has been its advocacy and lobbying to ensure improvements in the freight logistics environment on the corridor

of Transport, seeking to roll out its National Freight Logistics Strategy in the province, through the Mpumalanga Provincial Department of Roads and Transport, recognised the institutional framework for publicprivate consultation that had already been built in the province by MCLI and joined as a foundation member. The Maputo Port Development Company, Mozambique International Port Services (the container terminal), TSB (Transvaal Sugar), Manganese Metal Company, Maputo Fresh Produce Terminal, Matola Coal Terminal, Trans Africa Logistics, Trans African Concessions, with the expert guidance of Brenda Horne, on secondment from the then BHP Billiton-owned Manganese Metal Company, stepped in to fund a small office and operational team to support Horne. The organisation’s vision was and still is, to coordinate corridor stakeholders to become the ‘go to’ organisation on the Maputo Corridor by creating a cost-effective, continuous, reliable logistics route, creating an enabling environment for further investment and development and ensuring positive returns for all stakeholders. With the indomitable passion, energy and commitment of Horne to the MCLI vision, and a clear mission to partner with all stakeholders to create a sustainable, highly efficient transportation route, an increasingly favourable climate

TWA | Sep/Oct 2014

CORRIDORS

The implementation of Transnet’s road-to-rail strategy is imperative if the transport infrastructure on the corridor is to be retained

for investment and new opportunities for the communities are being created along the corridor. These objectives are encapsulated in what has become the slogan of the organisation “Working together to make the Maputo Corridor the first choice for the region’s stakeholders.” MCLI’s greatest success has been its advocacy and lobbying role to ensure improvements in the freight logistics environment on the corridor. This, with the considerable mandate of its private sector members, has been crucial to ensuring that. More importantly, MCLI has been extremely successful in bringing together a range of public and private sector stakeholders on the corridor. In MCLI’s 10-year history, it has continued to work with key departments on the

This communication and engagement has ensured that there has been a continuous stream of communication to stakeholders on the corridor. Constraints on the corridor have been addressed through direct engagement with all stakeholders in a working group environment. MCLI’s lobbying has also resulted in the extension of border operating hours in 2007, and the engagement with border authorities has ensured 24-hour operations for the festive period – something MCLI profoundly hopes to see extending into standard

corridor, namely customs in the form of Alfandegas and the South African Revenue Service, as well as the departments of transport of the three corridor countries of Mozambique, South Africa and Swaziland. Alongside these issues, the high visibility of the organisation in the freight and logistics sector has ensured that networking and working groups of the organisation are populated by stakeholders from every sector of services on the supply chain. It has been enormously successful in establishing an interface and platform for engagement between the government and private sector to the highest level in both sectors and is acknowledged in Africa as a model for corridor institutional frameworks and partnerships between public and private sector. The wealth of industry knowledge and expertise in the board of directors, and the strong membership base has given MCLI the credibility and credence required to ensure that the corridor is kept top of mind.

operation. In real terms, the increased tonnages through Port Maputo, from 4 million tonnes in 2003 to a projected 20 million tonnes at the end of 2014, are testimony to the success of the marketing mandate given to MCLI in its early years. The impact of the road infrastructure on the economic growth of the region has been substantial, and has been the single biggest factor in ensuring the sustainability of the corridor. While the completion of the rail rehabilitation in 2008 was another key milestone, rail services continue to be challenged; mostly by the pricing structure of services by Transnet Freight Rail, which challenges the movement of bulk commodities to the port. The implementation of Transnet’s road-to-rail strategy is imperative if the transport infrastructure on the corridor is to be retained at sufficiently high levels, and in order to ensure the future competitiveness and cost-effectiveness of the Maputo Corridor. The recipe behind the success and how MCLI achieved

TWA | Sep/Oct 2014

CORRIDORS

EDITORIAL COMMENT By Barbara Mommon, CEO MCLI It is a great privilege to be part of this dynamic organisation that is MCLI and as we celebrate our 10th year of operation, I am acutely aware of the enormous contributions made by the many role players who have been instrumental in driving the establishment and continued functioning of MCLI since its inception. It has truly been a partnership of effort between stakeholders across all sectors on the corridor and has established a great legacy to those who were instrumental in its establishment. It is the partnerships that have given credence, credibility and impetus to MCLI’s work and continue to be crucial to everything that we do. As we look at how much the corridor activities have grown in what is essentially a very short time, we cannot help but feel indebted to those individuals who put muscle behind their ideas and dreams, and made MCLI a reality. We have highlighted some of these very important personalities in this publication. Looking ahead, the challenges are in some ways very different to those of 2004. The incredible changes that have happened over this 10-year period bode well for the next decade. We look forward to continuing to narrow the gap between public sector service providers and the private sector role players and, in so doing, we keep the vision of an efficient, effective and reliable transportation route at the top of our minds. There is much work still to be done. The border post remains the biggest area of focus. Although I believe we are closer than ever to the implementation of a 24-hour one-stop border post at Lebombo/Ressano Garcia, it remains the single biggest issue hampering trade and economic development in the region. Nonetheless, I am confident that we will see some positive developments in this regard, as the level of planning, discussion and activity around its implementation slowly gather momentum.

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the sustainability of this collaborative mechanism lies, according to MCLI CEO Barbara Mommen, in the passionate leadership and active secretariat and committed board of directors, and an institutional framework with the right mix of partners is crucial. “Everything hinges on the quality of the relationships built through the supply chain.” Beyond that, though, the active support of members and stakeholders behind the early framework created by the first Premier of Mpumalanga, Dr Mathews Phosa, and by former presidents Chissano and Mandela, have helped to develop a sound framework for ongoing political will in the region. The challenges remaining on the corridor are largely focused around the border facility and systems. It is the challenging disconnect between the excellent political will at executive level and the lack of capacity for implementation at administrative level that is no more evident than in the current status of the Lebombo/ Ressano Garcia border post. The years of delay in implementing the mandated one-stop border post remain unfathomable. While the customs modernisation programmes of the South African Revenue Service and the Single Electronic Window implemented by Alfandegas in Mozambique in September 2012 have been instrumental in speeding customs clearing at the border post, the congestion and delays that afflict the border post between 00:00 and 08:00 the following morning are costing the region dearly. In all of this, though, the Maputo Corridor is one of Africa’s success stories in terms of regional integration between the three corridor countries of Swaziland, southern Mozambique and the Mpumalanga and Gauteng provinces of South Africa. In this case, the infrastructure investment has paid huge dividends in supporting the regional integration imperatives of the SADC region. The imperatives for regional integration have been long hailed as a necessity for Africa’s ability to compete globally and to ensure that African economies develop towards deeper and more sustainable industrialisation. The Maputo Corridor has proved that without infrastructure and continued investment in improvements, and without a driving force in the form of a corridor institution steering communication, information and the coordination of efforts, regional integration does not happen. MCLI faces considerable challenges in the coming years as it positions itself in a shrinking economic scenario in South Africa, and as the challenges for relevance in a changing environment make the sustainability of the organisation a continuous balancing act. It is inevitable that MCLI will have to move towards a service-oriented organisation and this is something that is already being planned.

TWA | Sep/Oct 2014

ADVERTORIAL

NGULULU

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Ngululu Bulk Carriers is RTMS certiﬁed and achieved its ﬁnal PBS assessment. In order to stay on top of its game, NBC puts technology and innovation at the centre of its business strategy.

UNNING A successful transport business is never easy. As Afrikaans-speaking people say, transport business is trane sport, that is to say, transport is a ‘tears sport’ type of business. Managing Ngululu Bulk Carriers’ (NBC) 400-plus fleet of truck/trailer combinations is definitely not child’s play. Luckily, there is a dedicated team of men and women at the helm of NBC, making sure that the wheels are well oiled and the machines are performing optimally. In a quest to stay abreast of developments and adopt the latest technology in the transport industry, Ngululu completed the Road Transport Management System (RTMS) and passed the final Performance Based Standards (PBS) assessment, to be implemented on certain routes. This is a major achievement for NBC. The RTMS accreditation is evidenced by the yellow diamond-shaped sign on the company’s trucks. RTMS is a voluntary scheme that has been initiated by the industry and supported by the Department of Transport. RTMS encourages consignees, consignors and transport operators in the road logistics value chain to implement a vehicle management system that encourages roadworthiness of vehicles and driver wellness and discourages overloading. Through this system, road wear is reduced, road safety improves,

driver fatigue is reduced and productivity levels increase, culminating in satisfied customers as anticipated service levels are maximised. This leads to improved competitiveness while at the same time contributing immensely to the environment through reduced carbon emissions. Through the system, the company gets subjected to regular compliance audits that ensure the highest standards are maintained at all times. Freddy Sinthumule, CEO of Ngululu Bulk Carriers, says the system is fully functional. He goes on to say that there are many benefits to implementing the system. Such benefits come from a reduced number of vehicles that result in improved safety for drivers and other road users, as there is less congestion on the roads. The PBS allows for a special design that has a higher payload, which directly reduces the number of vehicles deployed on an approved route. The other benefit Sinthumule mentions is that the system is environmentally friendly. This is because less emission is released into the atmosphere due to the reduction in vehicles. Also, because of the strict adherence to standards, driver wellness +27 (0)13 230 5800 is a top priority. www.ngululubulkcarriers.co.za

TWA | Sep/Oct 2014

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WAREHOUSING

Inventory movement and control Design is the fundamental component of the entire warehouse operation, according to Martin Bailey, chairman of Industrial Logistic Systems. He tells Simon Foulds what key elements are involved in operating an efficient warehouse.

OOKING AT THE latest trends in improving the movement and control of goods in a warehouse, Bailey says companies are relying more and more on better systems. “This includes systems such as better scanning, voice systems, and various technologies to improve efficiency and productivity. Increased levels of mechanisation give you better efficiency, better accuracy and faster response.”Regarding the latest trends in the design of warehouses, Bailey states there are increased levels of automation as labour becomes more expensive, less efficient and more difficult to control. He adds that automation is becoming cheaper. “Automation also significantly improves security, speed, accuracy and reliability. At the same time, it reduces the reliance on ERP systems because it needs its own software when doing detailed warehouse picking. You see the warehouse of the future having higher levels of automation, especially with a rapidly declining labour efficiency.”

Lifespan

“There are a multitude of different options available and the blend of the best technology and related IT systems is vital to ensuring the total operation is optimised. It needs to be well researched and well thought out before choosing the technology and system suited to the warehouse specifications.”

Designing flexibility

Martin Bailey

Designing a warehouse with the flexibility of handling an unpredictable future, at the same time minimising your cost-to-serve, is not an off-the-shelf product. “It is almost impossible to have infinite flexibility and, at the same time, great efficiency. Usually, as you mechanise processes, you improve efficiency but reduce flexibility. So what is more important? If your business is stable for the long term, throw flexibility out of the window. If your business is highly variable, you live with the inefficiencies of flexibility. A 3PL, third-party logistics provider, will typically focus on flexibility, as most contracts are for three years; whereas an owner-operator will typically plan for a 10-year horizon.”

An important aspect is ensuring the warehouse can be utilised efficiently over at least the next five to ten years. “Ensure the warehouse integrates with a total business plan and into a logical supply chain philosophy. If the facility is compatible with the rest of the business objectives, problems tend to be minimised. In many cases, the warehouse is the ‘stepchild’ of the business, receiving little investment into appropriate resources. When an investment into the warehouse is well focused on the actual business needs then a warehouse operation has a sustainable shelf life.”

Location A vital aspect is location. “It significantly affects transport costs and transport is usually the largest cost contributor to the supply chain, and being close to the customer significantly improves service.”

Picking Achieving the most cost-effective, accurate and productive picking technique and technology is, according to Bailey, probably the most difficult, yet important, component of many designs.

TWA | Sep/Oct 2014

SUPPLY CHAIN LOGISTICS

Fast-tracking growth Innovation is no longer an option, but rather a necessity. Companies that are on top of market changes maintain their competitive advantage.

Y DOING SO, these organisations are creating and adopting innovative business models. This was one of the key messages from Frost & Sullivan’s GIL 2014: Africa – The Global Community of Growth, Innovation and Leadership annual congress. Simon Foulds conversed with industry leaders in attendance at the Cape Town event. One of the key events at this congress was the CEO panel: ‘Gateway to Africa’, which provided valuable insights on South Africa’s future role in channelling investment into the continent. On the panel were Charles Brewer of DHL Express, Sunil Joshi of Neotel, Gert Schoonbee of T-Systems and Chris Whelan of Accelerate Cape Town. The panel was moderated by Hendrick Malan, operations director, Africa: Frost & Sullivan.

Investment appeal From the left – Hendrick Malan, operations director, Africa: Frost & Sullivan; Chris Whelan of Accelerate Cape Town; Charles Brewer of DHL Express; Gert Schoonbee of T-Systems and Sunil Joshi of Neotel

Malan says, “Until recently, South Africa was viewed as the growth area in Africa as well as the gateway to the continent. We have lost the status as the largest economy in Africa. As a company facilitating companies coming into Africa, Frost & Sullivan has seen a change. Whereas in the past companies came to South Africa first and then headed north, they are now moving directly either to West or East Africa. Companies are by-passing us and the country is being left out of this critical part of the game. If it continues like this, we run the risk of eventually missing out on playing a crucial part of the African renaissance. Has the country lost its appeal, and why?” Brewer adds, “South Africa was the gateway into Africa because historically, from a logistics point of view, companies

had no choice and, irrespective where you were coming from in the world, to enter Africa you had no choice but to do so through South Africa. There was only one decent point of entry into the continent and South Africa was that point of access. “Cape Town and Durban are doing a fantastic job of branding themselves from a tourism point of view but a terrible job in terms of branding itself in terms of great places to do business. “Another real problem is that you cannot get visas or intercompany visas. If you want to attract business to South Africa, you have to make it easy. Every year we produce a ‘connectiveness report’ that compares 108 countries. One of the aspects we look at is how easy it is to move trade, people, finance, communication and information through the respective countries. “Why does Singapore beat Malaysia? Why is Dubai better than Bahrain or Saudi Arabia? Why are the UK, France and Poland preferable to the emerging Eastern European countries? It is because they all recognise that the easier it is to do business, the more likely that companies will establish operations there.” Whelan states, “What’s interesting for me is looking at trends. I believe South Africa is still in a very strong position now but I am not wildly happy about the direction we are travelling in. Charles makes the point about connectiveness and there are a few things that you have got to get right. South Africa’s National Development Plan speaks about some of the opportunities, but South Africa has some immense challenges that need to be addressed. I do not think we have lost it but we do need to very quickly pull our socks up and undergo a more collaborative approach between government and business because, at the moment, we seem to not want to talk to one another.”

Mother company investments Malan asks, “How difficult is it to obtain finance from overseas head offices to expand operations in South Africa and the rest of the continent?” Schoonbee answers, “Germany does not discriminate against Africa as a continent. So when we compete for capital against other countries it is not a competition against the various countries themselves – rather it is a competition of good business fundamentals. That is why the growth of the country is so

TWA | Sep/Oct 2014

SUPPLY CHAIN LOGISTICS

in Africa important because if the country is not growing then our business cases are under threat. “We have always had excellent support from our global CEO who is really supportive of us in South Africa and within the continent. As long as we have a good business model, they give us all the investment that we need.”

Gateway to Africa Malan goes on to ask, “What makes a great gateway into Africa? Does South Africa still rank high on the continent?” Joshi states, “South Africa has a great system. Though we have our challenges and the country is a 20-year-old democracy that is going through growth pains like many other countries, it has huge potential. In order for us to grow, a shift towards domestic consumption is going to be important for us. That is going to drive really big growth for our own country regardless of what happens around us. Look at the export market and the way the rand/dollar exchange rate has gone south is actually a blessing in disguise. We need to take advantage of it and if we do, we will actually be able to export a lot more goods because then we are a lot more competitive. “One thing we cannot ignore is that we are competing against the aggressive Chinese, along with the innovative Indians, Brazilians and Russians. There, productivity rather than innovation is the name of the game. They do not sleep, we get to take our weekends off, and that is the shift in our own mindset that we have to get through as individuals, irrespective of what part of the operating environment, political or otherwise, we operate in. “There is a shift needed. This has to take place in all states of competitiveness. We are a competitive nation and in order to take what is rightfully ours into the global market place, we need to be better than the rest. If we are, then we are the gateway into Africa.”

then my tagline would be ‘South Africa – it’s a great place to start’.” Whelan concludes, “A few years back, I met a businessman from Singapore who described his country as ‘China Light’, which might sound a little bit offensive to lot of people; but Charles’s point is right: South Africa is a great place to start – why not base yourself here? We are a knowledgedense, service-oriented economy and we need to play to our strengths, drive it and be relentless.”

RECOGNISING COMPANIES IN AFRICA Africa’s top industry performers were acclaimed at Frost & Sullivan’s influential awards banquet held in Cape Town during August. Thriving in the current business environment requires an approach that is visionary and incorporates innovation and game-changing strategies. Frost & Sullivan’s Best Practice awards, based on a rigorous selection methodology, highlight the achievements of market-leading companies that deliver excellence and best practices in their respective industries. Delivering the welcome speech and keynote address, Hendrik Malan, operations director for Frost & Sullivan Africa, noted: “The Frost & Sullivan Best Practice awards programme acknowledges exceptional industry achievements. The selected awardees have demonstrated innovation, competitiveness and leadership in meeting the particular demands of doing business in Africa.” A total of 23 awardees were drawn from diverse sectors, including information and communication, chemicals and materials, energy, transportation, healthcare and finance. The ICT sector was strongly represented by Mi-Fone, T-Systems, ZTE, Intersec, Global Voice Group, Skyvision, Mahindra Comviva, Djibouti Data Center, EOH Cloud Services, Xlink, IBM, Health Window and Orange. Recipients were honoured for categories such as enabling technology, technology innovation, customer value enhancement, competitive strategy leadership, outstanding entrepreneurial spirit and vertical market penetration.

Value proposition for SA Malan asks, “If you had to treat South Africa like your company, if you were the CEO of South Africa, what would your value propositions be that you take to the international market?” Says Joshi, “For me it would be as a service differentiator, because we are leaders in the design industry and service sectors. Innovation starts in South Africa and then goes north.” Schoonbee says, “I would say it starts with our people. South Africa as a country has an incredible richness of diversity with moments of brilliance where we outperform the rest of the world. I think the biggest problem we have is that we do not believe this.” Brewer continues, “People, stability, capability and infrastructure are our strengths. All other places in Africa are tough places: Nigeria, Kenya, Tanzania and so on. If you are a new business visitor coming into Africa and you choose Lagos, Nigeria, as your first destination, then be prepared for a whole different world. If we work out who we want to be,

T-Systems: Gert Schoonbee (managing director), Henrik Malan (operations director for Africa, Frost & Sullivan)

DHL Express: Charles Brewer (managing director), Sumesh Rahavendra (head of marketing)

Sasol: Dr Thulani Dlamini (manager: research & development), Henrik Malan (operations director for Africa, Frost & Sullivan)

Barloworld Logistics: Liesl De Wet (senior manager: sustainability), Henrik Malan (operations director for Africa, Frost & Sullivan)

TWA | Sep/Oct 2014

SUPPLY CHAIN LOGISTICS

Enabling African growth and expansion Imperial is rolling out a unique strategy, enabling clients’ African growth and expansion while minimising their risks and the continent’s complexities.

LIGNED WITH, and designed around, clients’ needs, it is fitting that Imperial’s unrivalled approach to Africa started with discussions with clients, according to Imperial’s Africa division CEO, Dougie Truter. “It was sparked by dialogues with leading multinationals aiming to benefit from the consumerisation of Africa,” he reveals. “Through conversations at the highest level – with manufacturers and brand owners in the pharmaceutical, FMCG and general retail sectors – Imperial’s Africa strategy was conceived, with regional cluster thinking as one of its cornerstones.” The International Monetary Fund predicts that no continent will grow more strongly than Africa over the coming years, while McKinsey and Company statistics reveal that the region’s consumer-facing industries are expected to grow by over $400 billion by 2020. It is for these reasons that global companies are increasingly setting their sights on Africa. “Along with the opportunities, however, come challenges and risks,” Truter cautions. “There is no ‘one size fits all’ approach to the African consumer or the African market. Distinct consumer segments exist, with significant variation by country. The legal systems are as varied as the languages spoken. Cash presents risks and challenges. The complexity of doing business in Africa cannot be overemphasised,” he stresses, and cites the example of a multinational aiming to grow in Africa, but having to deal with hundreds of small distributors spread across a host of countries, and expecting from them the same governance and control as they would have with a large, world-class distributor. The aim of Imperial’s approach, Truter states, is to minimise the risks and complexities for clients seeking to enter or grow in the African market; to simplify business in Africa for them, and offer a single point Dougie Truter, of contact that can deliver world-class Imperial’s Africa division CEO service, standards, governance and control. The group is doing this by offering a total, end-to-end value proposition that is summed up in its catchphrase: “Get you there; sell your product; build your brand.” It is a strategy that is built on the foundation of Imperial’s understanding of the dynamic and ever-expanding demands of the African consumer, as well as knowledge and experience – built up over more than 40 years – of the continent’s challenges.

Our strategy is about working with, and for, Africa. We will uplift and upskill people in the countries in which we operate

TWA | Sep/Oct 2014

Outlining the evolution of Imperial’s Africa strategy, Truter notes that it began with transport companies in South Africa that offered cross-border services. From this more traditional transport-based service, Imperial expanded its service offering with distributor capabilities, in order to meet clients’ selling needs. “We moved into Africa’s consumer market with the acquisition of CIC Holdings, through which we are now operating extensively within the FMCG industry, with a service offering that includes distributorships, merchandising, warehousing, distribution, debtors’ administration and staffing solutions.” Imperial entered the pharmaceutical space with the acquisition of Imperial Health Sciences – which is one of Africa’s leading pharmaceutical and healthcare supply chain service providers, specialising in multichannel solutions for delivering essential medicines, and consumer health products in South Africa, to Namibia, Botswana, Mozambique, Zambia, Kenya, Tanzania, Malawi, Uganda, Ethiopia, Rwanda, Zimbabwe, Ghana, Ivory Coast and Nigeria. Today, Imperial is the only company that can take products from manufacturing to the point of purchase in both a Southern African and pan-African context. ‘Build your brand’ refers to the group’s brand activation services – to its unique ability to ‘pull’ products through the value chain to the consumer. The latest development in this space is Imperial’s acquisition of mobile firm Resolve Mobile. On a continent where mobile is the primary mass communication source, and cell phone advertising and marketing is set to grow rapidly, it’s a significant move, Truter notes, adding that Imperial has plans to leverage its mobile capability to offer clients digital marketing opportunities. These would be supported on the ground. In addition, the group is exploring brand-building avenues for clients, which include mobile promotions with rewards of airtime or vouchers for brand-loyal consumers. “This is more accessible for African consumers and less risky than cash discounts,” he explains. Notably, it is an effective mechanism to build brand, rather than retailer, loyalty. Imperial is also adding significant value to clients’ brands through its ‘feet on the ground’, Truter states, and explains the phrase: “This refers to Imperial’s ability to give brand owners access to consumers via ‘feet on the ground’, specifically through our people in-country who are talking directly to consumers.” In addition to benefiting its clients, this approach is enabling Imperial to contribute to job creation, training and skills development across Africa. “Our strategy is about

SUPPLY CHAIN LOGISTICS

working with, and for, Africa. Training is critical, particularly in-country training. We will uplift and upskill people in the countries in which we operate. Our businesses in these countries will be ‘Africanised’; they will have support from and report to South Africa, but they must manage themselves.” Imperial Health Sciences’ Supply Chain Academy, which has become one of Africa’s leading providers of training and development for people working in the public health supply chain, reflects Imperial’s commitment to skills development in Africa. It offers programmes – including in-country training – from basic to postgraduate level, to ensure that the supply chain is given the focus it warrants in the healthcare sector in developing countries. Imperial’s pan-African strategy focuses on Nigeria and Ghana in West Africa and on eight East African countries – namely Kenya, Tanzania, Rwanda, Uganda, Burundi, Ethiopia, South Sudan and Somalia. Truter elaborates: “In East Africa, Kenya is our operations base, since many multinationals have African head offices and manufacturing facilities there. In addition to this, its Port of Mombasa is a gateway to East Africa. In West Africa, our focus is on acquiring good infrastructure.” Imperial’s acquisition of Nigerian logistics company MDS gave the group instant 3PL (third party logistics) capability in Nigeria and Ghana. Truter stresses, however, that acquisitions are just one element of the organisation’s approach to building its capabilities in Africa and customising its

Local expertise experience in outsourced value chain management in order and assets to drive clients’ competiveness. “Our strategy is to leverenable growth age, partner and acquire, and not necessarily in that order,” for clients in the he explains. “Imperial will leverage its existing experience, African consumer market expertise, resources, capabilities and geographic footprints. Where we need to build on this, we will partner with other organisations to meet our clients’ needs, or we will acquire the necessary capability.” While the group may not actually acquire physical assets, he says that clients can rest assured that Imperial’s African partners will be ‘Imperial Enabled’. The term – which the organisation has trademarked – refers to partners, subcontractors and suppliers having the training and expertise to offer clients the same level of service they could expect from Imperial. With clients like GlaxoSmithKline, Johnson & Johnson, Procter & Gamble, Bayer, AstraZeneca, Pfizer and South African manufacturer Tiger Brands already benefiting from Imperial’s Africa strategy, Truter’s assertion that it has been an ‘easy sell’ is well founded. “This is a journey that began with our clients’ needs; it is a journey that we are taking with and for our clients. While the path is constantly being refined and built on, the support we have garnered makes it clear that Imperial is on the right track as we strive to enable our clients to unlock the full potential of www.imperiallogistics.co.za Africa,” he concludes.

TWA | Sep/Oct 2014

Future-prooﬁng our clients supply chains

Smart stands for sustainable, measurable, adaptable, resourceful and transformational solutions. At Barloworld Logistics, we go to great lengths to design, implement, operate and manage smart supply chain solutions.

Simply put, ethical, economical and environmentally friendly solutions. Solutions that reduce costs, increase efﬁciencies and improve carbon footprints.

With innovative software and cutting edge technology we’re able to track, monitor and measure the impact on the environment at every turn. Our culture of operational excellence enable us to ﬁnd new ways to minimise waste while maximising productivity, proﬁtability and performance.

While world-class corporate governance and global best practices ensure we create a sustainable future for our clients’ business as well as our own. A

To see how our smart supply chain solutions can improve your triple bottom line, call Mike Fanucchi 011 445 1600.

www.barloworld-logistics.com

SUPPLY CHAIN LOGISTICS

Managing change in supply chain evolution Globalisation of the economy and rapidly advancing technology have accelerated change in the business environment. Technology makes it possible to communicate more effectively in support of change.

HE ABILITY TO MANAGE and adapt to change is an essential competency that all firms need today. Alan Milliken, senior manager on the Supply Chain Capability Development Team at BASF in the USA, talks to Simon Foulds about managing the change. In general, change management is the process of transitioning individuals or an organisation to a desired future state. In supply chains, most organisation change is driven by external innovations and the need to keep pace in a highly competitive environment. Firms who have succeeded in integrating adaptation to change across the organisation will find it easier to effect and control changes in policies, procedures and tools in supply chain management.

Failing to effect change Many supply chain improvement efforts fail to achieve the stated objectives and ensure changes are sustained going forward. Change management is important in enabling a sustainable competitive advantage via improvement initiatives. From a supply change improvement perspective, change management is the process, tools and techniques required to manage people through the planned change in a way to assure the effort results in the desired business outcome and

a change in the organisational culture to ensure sustainability of the improvements.

Selecting the process to change The process should start with a systematic diagnosis of the current process. This evaluation makes the need for change clear to all stakeholders. However, the business must also determine if it has the capabilities required to implement the change. Concentrate first on the changes that are expected to provide the most benefit.

Developing the vision and plan A vision for the change mission is needed: e.g. provide company-wide demand planning process excellence through the implementation of best practices enabled by the latest advanced planning software. Goals must also be clear: e.g. increase on-time delivery performance, reduce production and distribution costs, and reduce inventory. Elements that can be quantified (e.g. increasing on-time delivery performance from 90% to 95%) as well as elements that can be difficult to quantify (e.g. improving teamwork between sales, marketing and production) should be included as benefits. The work plan should include key change management components, such as education/training and performance management. Improvement projects often fail to deliver the desired results because these components are either omitted or are not properly planned and resourced. The education and training component must address all stakeholders and competencies within the organisation. In supply chain management, some generic competencies such as collaboration, teamwork and communications are very important, and separate training classes may be necessary to ensure success when improving cross-functional processes. At the very least, the relationship between such generic skills and successfully integrated processes must be addressed in the change management process.

People in the change management process The key components of success in any business are people, processes, and technology. If we view things from the perspective of these

TWA | Sep/Oct 2014

SUPPLY CHAIN LOGISTICS

Alan Milliken, senior manager on the Supply Chain Capability Development Team at BASF

three components, we can determine to a large extent whether or not we will succeed with improvements. For example, let’s assume we program our demand planning system to provide better decision-making support, and we design an improved process that requires key stakeholders to review and use the new reports. One can see the bottom-line benefits resulting from this change. But people are resistant to change, with the biggest issues being: “We have always done it this way,” and “What’s in it for me?” Therefore, the change management process must align expectations, communicate the need for change, and provide education and training to support the transition.

demand forecasts to improved service, costs and inventory. Leadership must understand and communicate the idea that improved demand planning helps sustain and increase revenues through customer satisfaction. Improved demand planning results in lower production costs and decreases distribution costs. A more accurate demand plan enables the business to operate with lower inventories. In nutshell, leadership must effectively communicate the need for change to all stakeholders and counter resistance to change by aligning the objectives of the change project with the overall strategies of the firm.

Leadership’s role

Keys to successful change management

To successfully implement a change, we must first educate leaders and gain their commitment to, and support for, it. Simply approving a spending plan is not sufficient commitment and leaders must communicate why the change is needed, and what the expected benefits are. They need to champion the effort. A key function of leadership is to relate the need for change directly to the business value proposition. For example, if the change objective is to improve the demand planning business, leadership must relate this objective to the benefits that are expected in terms of revenues and profits. One way they can do this is to relate more accurate

From a macro perspective, two things occur when we do not manage change well. First, we do not receive the expected return on investment for the efforts we put in. Second, without a change management process, the benefits we receive from a change are short-lived because as soon as the focus is removed, people tend to revert back to the old ways of doing things. Therefore, to better manage change and ensure sustainable improvement, we must first understand why improvement efforts fail to produce desired results and then act to integrate change management into all supply chain improvement projects.

TWA | Sep/Oct 2014

SUPPLY CHAIN LOGISTICS

SADC urged to take on the North-South Corridor Despite the obvious beneﬁts to the continent’s development, intra-Africa trade links are disturbingly low, with the majority of the region’s trade occurring with Europe, America and China.

CCORDING TO RESEARCH by Ecobank, a Togo-based bank, only 12% of African countries trade with each other. By comparison, 60% of Europe’s trade is within its own continent and the figure is around 40% in North America. Emmanual Chaves, CEO of Mozambique Airports, at the recent North-South Corridor Development: China-Africa Cooperation Forum, urged SADC to take the North-South Corridor’s development on as a regional challenge. Chaves said, “Countries like Malawi, Zambia, and Zimbabwe will be well served with alternatives to taking their products out of the continent through maritime and railway transport and I encourage the region to focus on the project because Africa should not have to wait for long to have the corridor operational, so that we can give more options to landlocked countries.” The North-South Corridor, which South Africa has been charged with championing as part of the Presidential Infrastructure Championing Initiative, was introduced to address this very issue. Eight of Africa’s 52 states are currently linked to the project, with clear aims of expanding the project all the way to Cairo. Ofentse Sibetlo, DTI’s deputy director of economic infrastructure and logistics, states, “The greatest challenge for the continent was around infrastructure development and that while the eight African countries linked to the NorthSouth Corridor were glaringly different, they shared similar core issues around underdeveloped infrastructure. Of the 19 projects identified, 7 have been classified as priority projects,” according to Sibetlo. These include Dar es Salaam, Durban port developments in South Africa, Harare Beit Bridge and Mozambique, among others. “One of the greatest challenges is the issue of alignment between each state. When we do site visits at Beit Bridge, there is a glaring issue that shows we are not as aligned as we should be, as this is seen as country specific, and there is a belief that we will connect at the borders.” In November last year, South Africa called for more private sector collaboration. “As much as it is countries that trade, it is more companies that trade and there is now an urgent need to expand on our ideas,” Sibetlo concluded.

According to Africa Infrastructure Country Diagnostics, Africa will need to spend a minimum of $93 billion a year over 10 years to meet its infrastructure needs, which call for a very substantial program of infrastructure investment and maintenance. Sinohydro in South Africa, the state-owned Chinese hydropower engineering and construction company, has 500 overseas projects under construction. Li Quanshen, chief representative of Sinohydro adds, “There are 280 projects currently under construction in Africa with a contract total of $21 billion. In Mozambique, more than 10 small projects are under construction. In Zambia, there are 14 projects valued at $1.8 billion, while in Angola, there are 47 projects with a contract amount total of $4.7 billion. We have the capacity, we are ready and looking for collaboration with our local partners.” Asked what projects Sinohydro currently had underway in South Africa, Quanshen indicated that South Africa’s trading rules made it difficult, but that they were determined to overcome the hurdles they had been presented with in the past. The 6th Forum on China-Africa Cooperation is scheduled to take place in South Africa in 2015. This triennial ministerial meeting between China and Africa is expected to: • review the achievements of transport and infrastructure projects between 2012 and 2015 • prepare potential projects for 2015 to 2018 and the Pretoria Action Plan • address capacity building and skills development • explore the potential investment from China and other BRICS countries • identify feasible projects in SADC • identify the cooperative partners with China, especially for SEZs.

TWA | Sep/Oct 2014

PORTS

Mozambican port propelling the region forward Port Maputo has a mission of charting regional growth, by providing an attractive, competitive and integrated port service piloted by innovation and integrity.

T IS LINKED to the industrial hub of South Africa, Johannesburg, by the Maputo Logistics Corridor Initiative, offering an alternative port of exit to South Africa’s biggest port in Durban. Port Maputo’s commercial director, Johann Botha speaks to Simon Foulds about the port and its role.

• Port Maputo contributes 18% of the total customs revenue of the country and 26% of the southern region.

What makes Port Maputo an asset to the country and to Southern Africa?

What is the size of the ships the port is able to accommodate?

• From a macro perspective, Port Maputo is located at the centre of the global logistics chain, serving the hinterland from Southern Africa and being the closest to the Asian markets. • The geographical advantage of Maputo is now being exploited. The shorter road and rail distances to South African customers is becoming more attractive with road and rail improvements and border crossing initiatives delivering success. • We believe the efficiency at Port Maputo is the highest in the region. We also provide flexibility as part of the service offering and the approach of a tailored service to each customer, to incorporate their unique requirements, is proving to be extremely successful. • The appetite for investment in Mozambique is at an all-time high and as these opportunities are realised, the more the growth plans will come to fruition.

We can accommodate vessels with about 60 000 t GRT as follows: • max sailing draft: 12 m • width: 32.5 m • length: 250 m. However with the dredging (to -14 m) planned for 2015, we will be able to receive vessels up to 80 000 t GRT.

What are the operating hours of the port? The port works 24 hours a day (in two shifts) all year, except for 25 December and 1 January.

How many cranes operate at the port, and what types of cranes are they? The port operates bulk and break bulk operations using ships’ gear but also have two mobile harbour cranes (60 t and 40 t capacity respectively). The specialised container terminal has two of its own gantry cranes (currently being refurbished) and three mobile harbour cranes.

How many movements per hour?

Table 1 How much volume moves through the port annually? 2010

2011

2012

2013

Throughput in tonnes

7 560 281

10 908 942

14 117 050

15 628 010

Container

1 212 921

992 116

844 228

1 546 482

143 119

125 718

101 128

112 624

8 773 202

11 901 058

14 961 278

17 174 492

Containers TEU´s Total Throughput

Container performance is 15 cycles per hour (one container per lift, per crane). Bulk cargo is handled using skips or grabs at 200 t per hour.

What is the average waiting period for ships entering the port? On average, the vessel waiting time is less than 24 hours but for container vessels it is less than 12 hours.

How much volume moves through the port annually? In 2013, we handled 17.1 million t and the forecast for 2014 is 19.4 million t. For specifications see Table 1.

Can you please outline the port facilities and what each handles? • MCTL – car terminal • STAM – sugar terminal • TCM – Matola coal terminal coal and magnetite • MOZAL – aluminium terminal

TWA | Sep/Oct 2014

PORTS

• STEMA – grain and fuel terminal • MLSC – vegetable oil and molasses terminal • DP World Container Terminal • MICD Intermodal Container Depot • General Cargo Terminal – steel coils and pipes, bagged cement, gypsum, bagged rice • MPDC Bulk Minerals Terminal – ferrochrome, chrome ore, phosrock, iron ore • Cabotage Terminal of Maputo – local and imported cars, cabotage cargo.

What ship repair facilities does the port offer? These are not available in Mozambique.

How many ships can be accommodated at any given time? We have 14 berths at the main port and 4 dedicated berths at Matola port.

What have been the latest infrastructure developments at the port? Our current concession area is 140.6 ha, with an additional 5 500 ha available for expansion. The following developments have been completed: • the expansion of the port cargo gate to allow for six road lanes servicing the movement of trucks into and out of the port • the rehabilitation and upgrade of the road network inside the port with the addition of a perimeter ring-road of 2.1 km to improve traffic flow • the rehabilitation of cargo sheds to provide much needed covered storage capacity with three shed already completed. Planned developments include: • the expansion of the coal terminal to a capacity of 30 million t • the provision of an additional general bulk terminal with a capacity of 8 million t • the expansion of the car terminal to 15 000 slots • the expansion of the container terminal to a capacity of 300 000 TEUs

• the rehabilitation of berths to provide two deep-water berths with a draft of 14 m • the development of a Port Rail Master Plan to guide rail investment and efficiency improvement within the port.

Infrastructure • New slab at the bulk terminal • Additional bulk shed for rock phosphate • New internal rail lines • Matola coal terminal expansion Phase 3.2 • Car terminal expansion Phase 2

What future expansion plans are in the pipeline to expand the port?

• Berths 1 to 4 rehabilitated (for car carriers) • Gate 1 expansion and road rehabilitation

Short term (2014 – 2015) • Definitive bulk terminal • Upgrade of berths 6 to 8 • Container terminal expansion (includes additional yard; new rail terminal) • Car terminal Phase 3 • New northern boundary road • New wind and dust barriers • Additional jersey blocks • Two excavators and two backators • Tug boat replacement • Automated cargo systems.

• New MICD facility

Equipment • 12 x new payloaders • 1 x Ram Revolver • 14 x skeletal trailers • New fenders for all berths • Additional tug boat with 65 000 t bollard pull • Pilot boat replacement

Johann Botha, commercial director, Port Maputo

Medium term (2016 – 2020) • Matola coal terminal expansion – Phase 4 • Channel dredging – 14 m • Bulk terminal Phase 2 (loading equipment) • Sugar terminal expansion • Rehabilitation of arrival/departure rail yard • Internal rail shunting model • Containers terminal expansion to berths 15 and 16.

Commoditie

2010

2011

2012

2013

BULK CARGO (tonnes)

7 474 788

10 798 679

13 917 586

15 320 078

CONTAINERS (TEUS)

14 964 981

21 612 803

27 863 666

30 678 757

CAR TERMINAL (tonnes)

85 493

110 263

178 514

180 491

TWA | Sep/Oct 2014

TRAINING

Providing relief to skills-strapped industry Rapid professionalisation of the supply chain and logistics industry results in highly skilled professionals needing to further upskill quickly. Mario Landman head of the ILSCM (Logistics and Supply Chain Management), discusses how the industry can navigate these choppy training waters.

HE CURRENT MANAGEMENT training challenge facing the industry was brought into stark relief during the recent SAPICS convention where I chatted to a number of key company representatives who have been forced to promote key staff members to new levels of tactical and strategic management positions. This has resulted in a situation where highly experienced professionals, who may have just focused on warehousing and fleet management, have found their positions professionalised to the level of supply chain manager. The watershed 2013 CSIR State of Logistics Report looked at the results of this sudden onset of professionalisation in some detail and found that the focus on transforming individual positions to management positions required a broad componentry of skills, underpinned by a broader view of the economy and in-depth managerial development. In addition, the Scarce Skills List published by the Department of Labour, revealed that the sudden professionalisation of the industry will open approximately 132 000 positions. That doesn’t mean that there are now 132 000 new vacancies but rather that there are 132 000 tactical and strategic positions required within key professional areas such as management, control, supervision or tactics. In turn, each of these areas needs to be made up of the correctly proportioned number of operational, tactical and strategic personnel.

There is disparity between academic development and the needs of the industry

THE AUTHOR

MARIO LANDMAN, head of the Institute of Logistics and Supply Chain Management (ILSCM)

Where are all the managers? The reality is, however, that while there are currently enough operations personnel, there are not enough supervisory elements built into the logistics industry. This therefore results in enormous pressure to boost the number of supply chain managers at strategic and tactical levels, as opposed to purely functional operators. To pull the necessary personnel through the ranks of each of these four disciplines, the industry will differentiate between tactical managers and operational people within each band and where tactical managers are already positioned, they will be uplifted to the broader supply chain management level. The problem with achieving this is that tactical people urgently require tertiary qualifications like a Higher Certificate, or a

TWA | Sep/Oct 2014

minimum of a Bachelor’s Degree on a strategic level. To date, professional bodies have offered a myriad of international qualifications that the industry in general has agreed warehouse and fleet managers must have. Unfortunately, these courses have a specific focus in the form of certificate courses in specific areas. Due to its relative youth as a formalised professional discipline, the supply chain and logistics industry has not yet developed a fully mature accompanying academic discipline, resulting in a scenario where very few professionals have a logistics-specific tertiary qualification. It is virtually unheard of to find anyone with a Master’s degree in Logistics, let alone a Doctoral degree, working in the industry.

An academic backbone For the industry to continue growing as it is at present, this academic discipline must grow with it. But there is disparity between academic development and the needs of the industry. The first reason for this is that it is simply not practical for already employed supply chain and logistics professionals to attend residential universities, given that the majority of them are full-time employees. Another problem is that for many management professionals, it has been 20 years or more since they were on the receiving end of a course or lecture, so it will take time for them to re-adopt a ‘student/learning’ mindset and often they achieve this only after they have failed their courses. This is where the ILSCM has a role to play in growing the current managerial skills base within the industry, as it aims to address the specific need for higher education degrees and management training for professionals. With supported distance learning, students have the flexibility of distance learning, with course materials and other necessary resources being sent in the post or made available online. This allows employed students to study at their own pace. Contact classes are supplementary, not compulsory, and contact with lecturers is technologically mediated using tools such as white boards and online platforms. The local supply chain and logistics fraternity is in dire need of dedicated, tailored degrees. Far from being a death sentence, this is an opportunity the sector should welcome and feel supported in achieving. We honestly feel that there is a model to support the industry in achieving this and we hope to take the industry to far greater heights with this strategy.

RAIL TECHNOLOGY

y a w l i a r f o a c e i r r f u t A u f n i e t h n T e m e g a man The importance of a viable transport infrastructure system is closely connected to the economic, technological and social renaissance of Africa. By Simon Foulds

ORMAN FRISCH, global director of business development for railway solutions at Huawei Technologies, outlines how Africa can benefit from improved rail communication. Railways in Africa still use outdated legacy analogue trunking systems. The systems are unable to maintain reliable and secure radio communication, directly impacting customer satisfaction for the cargo sector. The introduction of GSM-Railway (GSM-R) will see the railways obtain a more effective communication system with an unprecedented track record of delivering reliable and secure rail communication services and also receive a cost-effective digital replacement for the existing in-track cable and analogue railway radio networks. Over the past years, the promising sector of GSM-R technology, which provides digital wireless and IP railway communications, has reached major milestones. GSM-R is an international wireless communication standard for railway applications. It is the mainstream in railway communication and is widely used by railways across the globe. The system provides seamless communication between train and control centres. Through this system, communication performance is guaranteed at speeds of up to 500 km/h and this makes it far superior to traditional analogue communication systems. In March 2014, Huawei Technologies, in partnership with Bombardier, was appointed as the official GSM-R provider by Zambia Railways for the Chingola-Livingstone Railway. This partnership will see Huawei provide the GSM-R technology as well as transmission equipment and Bombardier will deliver the train signaling solution, which will have the railway system running according to the European Train Control System standard. This is a standard backed by the European Union to enhance cross-border interoperability of rail traffic allowing railway operators across the world to

benefit from the procurement of signaling equipment following a single Europe-wide standard for train control and command systems. Due to high incidents of vandalism in Africa, Huawei and Bombadier tailored the European Railing Traffic Management System solution to reduce wayside equipment on the Zambian railway tracks. This means that, to

“The migration of Africa’s railway communication systems will, in future, bear great fruit.” Norman Frisch, Huawei a great extent, the equipment that transmits the signaling is located on board the train and not on the ground next to the railway tracks. For the GSM-R system, specially designed microwave transmission links between the base stations (backhaul) will dramatically reduce installation costs and allow less vulnerability to vandalism and theft than commonly used fixed transmission networks. This solution is a system that can be adopted throughout the continent. The migration of Africa’s railway communication systems to GSM-R and ERTMS will bear great fruit in the future. This is a solution to the challenge faced by African countries with national railway management systems that currently do not communicate between each other. With the adoption of GSM-R, African countries not only have the opportunity to utilise a reliable and secure rail management system but can also expand trade relations across the continent.

TWA | Sep/Oct 2014

AIR CARGO

July air freight volumes expanded Strong mid-year results disguise patchy regional performance.

IR DATA RELEASED by the International Air Transport Association (IATA) for global air freight markets show 2.3% growth in demand (measured in freight tonne-kilometres, or FTKs) over June 2013. That is however slower than the 4.9% growth reported for May. Nevertheless, overall growth for the first six months of 2014 stands at 4.1% compared to the same period in 2013. That is much stronger than the weak 1.4% increase reported for the full-year 2013 over 2012 levels. The strengthened growth has been underpinned by improving global trade and stronger business activity over the past year. Tony Tyler, IATA’s director general and CEO, says: “At the halfway point of the year, it is clear that overall cargo demand is much stronger than in 2013. Carriers in Asia-Pacific and the Middle East have been the biggest beneficiaries of the improved market conditions. Europe is doing reasonably well, albeit still in recovery mode. The weak spot is the Americas.

“The general improvement in the economic environment is always good news for air cargo. This may not however, be a recovery as usual. First there are a lot of risks out there – from conflicts and sanctions to potential national defaults and fear of the Ebola outbreak. Second, while air cargo is slowly emerging from two years in the doldrums, time has not stood still. Logistics has become an even more intensely competitive sector. Shippers value faster end-toend transit times, greater reliability and improved efficiency. More clearly than ever, the building blocks for the future of air cargo are found in global programmes such as e-Freight and Cargo 2000. These are helping the entire value chain to deliver on the expectations of their customers.” Data for July shows a strong increase in air cargo. Compared to July 2013, FTKs rose 5.8%. This is an acceleration in growth from June, when cargo demand grew at less than half that rate. The strong growth mirrors positive developments in some key regional economies. After a slowdown at the start of the year, global business confidence and trade are showing signs of improvement again, especially in AsiaPacific. Global air cargo volumes have now surpassed their previous July peak, in 2010, and look set to continue to increase. Taylor adds, “Overall, July saw growth accelerate. That’s good news and it reflects the continued strengthening of business conIATA facts fidence at a global level. But the air cargo African carriers grew 4.8% in June, much stronger industry is moving at two speeds, with a sharp than the year-to-date average of 3.1%. Growth divide in regional performance. European carhas been affected by a slowdown in some African economies, notably South Africa. Improving trade riers reported anaemic growth of just 1.8% data, however, points to a more optimistic outlook while all other regions reported solid gains of for the rest of the year. Capacity grew 0.3% in June, 5% or more on the previous year. In particular, year-on-year, whereas, in July, African carriers’ the 7.1% growth reported by airlines in AsiaFTKs grew 11.3%. However, African freight volumes remain highly volatile, and given the slowdown Pacific is encouraging as it demonstrates a in South Africa this year, it is too early to say recovery in trade and a positive response to that prolonged growth acceleration is underway, China’s economic stimulus measures.” capacity grew at 4.5%.

The strengthened growth has been underpinned by improving global trade

Tony Tyler, director general and CEO, IATA

Index to advertisers Babcock DAF

Grindrod

Barloworld Logistics

Imperial Logistics

Connecting Africa: Transport Infrastructure Ctrack

Saryx Information System Scania

21 4

Inter Africa

Shell

KZN Growth Fund Trust

Swaziland Railway

3 IBC

Mercedes-Benz

IFC

Total

FAW

10 & 11

Ngululu Bulk Carriers

Trans African Concessions

Frost & Sullivan GIL 2014

28 & 29

Renault Trucks SA

World Wind Logistics

TWA | Sep/Oct 2014

OBC

22 30 & 31

OFC, 6,7

RADAR/5144/TWA/E

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