Freight Innovations: Expect dramatic changes in the logistics industry by Delia Cooney from Freight Innovations
is said to be 2,9% down from 4,5%, it is unlikely that this refers to food inflation, which undergoes significant price fluctuations. This is directly linked to the fuel price as this is regularly amended in the form of a fuel surcharge. It has been stated in the media that the costs are also influenced by crime, as reports indicate that huge fraud The professional team at Freight Innovations comes takes place in with quick action and expertise. They are Hayley transport compaSmith, Account Manager; Delia Cooney, National nies due to diesel Sales Manager and Robertha Jass, Directors theft. Assistant. Not only is the economy under duress from the effects onducting business in the world of Covid-19, but the use of petroleum post Covid-19 has proven to be has also lessened and with the advent extremely difficult and South Africa is of the Teslas in the world, the future no exception. Consumer buying patmay hold financial difficulties for the terns have changed the landscape with oil producing countries. With artificial lessened discretionary income. Due to intelligence at the forefront of develbusiness people working from home opment, this may affect farming by and the resultant lifestyle changes, reducing the reliance on labour and cosmetic products are moving off the expediting mechanisation, influenshelves a lot slower. Appliances including television sets and various kitchen cing job creation. This should have a domino effect and reduce the costs of accessories are being purchased online farming, which should reduce the end as shoppers avoid malls, increasing price for the consumer. Whilst climate pressure on logistics and last mile change continues to dominate, polludeliveries. With Amazon expanding tion has escalated and non-compliance its footprint in Southern Africa and by municipalities has escalated sewerTakealots’ expansion, opportunities age disposal, which has resulted in raw for cost-effective deals for consumers effluent contaminating drinking water, are prevalent, shifting the emphasis to rivers and dams. Undoubtedly, this will lower costs and rental overheads. further impact the economy. This will have a domino effect. Many Whilst medical costs are relatively malls have lost rental income and with stable, hospital shares reflect a much the new regulation regarding anchor lower return as preparation for the tenants being unlawful at a subsidised pandemic did not result in hospitals rental, the scene is set for a transibeing utilised – it had the opposite tion in property portfolios. Consumer effect. Although the role of doctors’ trends include grocery shopping online practices, which included surgical and and fast delivery from most supermartheatre facilities, increased in imporket chains, minimising the potential tance as this offered operating services, of promoting product sales through hospitals were reserved or limited due optimum displays and merchandising. to Covid-19. This also prevents impulse buys which The cost of would usually be a reliable source of doing business in turnover. South Africa has Some industries have shed embecome more ployment which is likely never to be complex with recreated, with tourism, restaurants, the prolonged curios and beauty treatments being attacks on truck the most affected. Although inflation
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drivers and hijackings. Once extrapolated, this have resulted in increased costs for most products and with the cost of insurance rising, the consumer will foot the bill for crime yet again. Insurance companies are hiking premiums and including exclusions as well as increasing excesses in a bid to cut costs as crime increases. The pandemic resulted in the wide distribution of highly valuable personal protective equipment, which became the target of organised crime and hijackings. This type of cargo is currently virtually uninsurable and tutelage depends on the supplier, again impacting the cost of doing business as well as the product. Online tutorship has increased, lowering the use of vehicles and subsequently affecting the motor industry. With large corporates making factory production of tyres redundant, smaller players are entering the market to supply stock, directly influencing job cuts and increasing the role of logistics in the logistics value chain. Pressure on Cape Town Port has lessened due to the pandemic and ships being unable to travel. Much of the sea freight cargo appears to be routed via Durban Port which has improved service levels after a long battle with service failures and delays. The continuation of stable food supplies in South Africa to supply the domestic markets, as well as neighbouring countries remain under pressure due to a variety of factors, which include the ongoing drought in certain areas, political uncertainty, unrest and trucks being continually attacked, which has had an impact on transit times due to trucks only being able to travel during the daylight hours. With huge challenges in the food supply, less purchasing power due to job losses could affect sales. The resulting economic downturn would be lower prices and the ultimate creation of employment in the long run. South Africa is once again the financial leader in the continent. Nigeria fell back after the country surpassed the South African economy in recent years. The Nigerian gross domestic profit contracted by 6,1% in the second quarter of 2020. The stage is set for interesting developments on the continent, with logistics playing a pivotal role in growing the economy. Freight Innovations will fight the fight alongside you in these tough times. Visit them at www.freight-innovations.co.za and click on the red instant quote box to quickly get a price to send anything anywhere. Contact +27(0)86-177-7913 or e-mail agri@freight-innovations.co.za or www.freight-innovations.co.za for more information. 35
