The trend towards the outsourcing of logistics is continuing in transport, storage, distribution and operations planning. This is according to Cobus Rossouw, chief business development officer at Imperial Logistics.

“Key drivers of this trend are the benefits of multiparty scaled operations, the specialisation and complexity associated with integrated supply chain management and the increasing skills shortage within organisations. Companies are increasingly acknowledging that they do not have the core competencies in-house to efficiently handle their own logistics and supply chain needs.”

“In an increasingly global marketplace, with complex supply chains and logistics challenges, a supply chain partner that can plan and execute logistics, and that offers the scale and expertise that most companies lack, can add enormous value.”

“While the outsourcing trend continues to gain momentum there is still plenty of room for growth in this business. According to the latest State of Logistics Survey, at least 50% of logistics in South Africa is still managed in-house.”

“Another trend that is impacting the industry, is greater consolidation in the retail supply chain and increased rationalisation of capacity among logistics service providers. In parallel, there has been convergence in supply chain and logistics execution, which depends on specialised expertise and capabilities to address appropriate underlying cost drivers.”

“Leading retailers are increasingly consolidating their supply chains. Forward thinking retail and consumer organisations are visibly taking control of their own inbound supply chains in order to unlock logistics opportunities from the factory gate of their suppliers and to reduce inventory holdings of inbound materials though integrated planning.”

“This trend is having a significant impact on what brand owners must do by themselves,” Rossouw adds. Domestic and international suppliers, and their logistics service providers, need to adapt as their customers accept delivered product.”

“A burgeoning focus on road safety and compliance is also changing the logistics landscape. Clients are increasingly demanding greener, safer transport solutions. With the cost pressure on logistics there will always be a place in the market for lower cost, less sophisticated logistics providers.”

“But companies aiming to lead the industry must shape up in terms of safety and sustainability.”

“Environmental issues – along with road congestion and South Africa’s high logistics costs – are also driving another trend: the expansion of intermodal logistics. While the intermodal capabilities in South Africa requires investment by all stakeholders, it will become increasingly important in reducing road congestion and greenhouse gas emissions, and in lowering transport costs.”

“Logistics leaders not thinking about intermodal may find themselves derailed in the long term.”