transport world africa jan/feb 2015

Commercial Vehicles FMCG expansion

Supply Chain Logistics Understanding capabilities

Logistics Port of Durban

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Andrew Layman, CEO, Durban Chamber of Commerce – KZN: SA’s burgeoning industrial hub P31

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COVER STORYScania – Growing

market shareP6

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Commercial Vehicles FMCG expansion

Supply Chain Logistics Understanding capabilitiesLogistics Port of Durban


Andrew Layman, CEO, Durban Chamber of Commerce – KZN: SA’s burgeoning industrial hub P31ISSN 1684-7946 January/February 2015 Vol. 13 No. 1 / R50.00 incl. VAT

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34 38

REGULARSEditor’s Comment Staying safe is in your belt 2FESARTA In memorium 5Cover Story Scania – Growing market share 6Regional News 8

COMMERCIAL VEHICLESHCV trucks 2015 10 Expanding into the FMCG market 12The road to vehicle load management 14

TRAILERSMeeting specifi c needs 16

TYRESPutting tyre safety fi rst 17

LUBRICANTSEnhancing the bottom line 19

FLEET MANAGEMENTEmpowering independence 20Advice when insuring 21Mature risk retention strategies 22

SUPPLY CHAIN LOGISTICSUnderstanding supply chain capabilities 24

WAREHOUSINGFat and lazy supply chains 27

CORRIDORSKZN – SA’s burgeoning industrial hub 31

PORTS

Port of Durban 34The reefer peak season 37

TRAININGThe human investment 38

ALCOHOLBehavioural implications 39

AIR CARGOAir freight still fl ying high 40

1TWA | Jan/Feb 2015

2 TWA | Jan/Feb 2015

EDITOR'S COMMENT

It never ceases to amaze me how many truck drivers on

our roads do not wear seat belts.

You would think, in a country where over 12 000 people

are killed on our roads yearly that safety should be top of

mind and that it starts with your seat belt.

Apparently not!I recently saw a video shot by Volvo in Sweden, which shows

two dummies in an articulated truck; the driver

dummy was wearing a seat belt while the pas-

senger dummy was not. The truck with the two

dummies was then rolled down an embankment

similar to the ones we have on our highways.

Inside, a camera filmed the two dummies.

If every truck driver and his assistant saw this

video, the first thing they would do, as soon as

getting into the truck, is fasten their seat belts.

The video shows the dummy without the seat

belt hitting the roof of the truck, before bounc-

ing around the cab, hitting the windscreen, the

steering column and then being propelled into

the dummy driver (still wearing its seat belt).

Needless to say, neither dummy would have

been pulled out unscathed and, in all likelihood,

the dummy being tossed around the cab would

have killed or, at the very least, seriously injured

the dummy driver.

It turns out that most drivers not wearing seat

belts in this situation are flung out of their vehicle

and are killed by the impact of their own truck

rolling on top of them.

Hopefully neither you nor your drivers are like the unfastened

dummy described above.

There is no time like now to drive home the importance of wear-

ing a seat belt in a truck. Just because the driver sits above the

traffic does not make them less susceptible to the real dangers

of being thrown out of their truck in the event of an accident.

In this issue, we take a look at what some of the industry’s big-

gest names are bringing to the heavy commercial vehicle sector

in 2015, and how some others are expanding into the FMCG

market with ever-growing light commercial vehicle ranges. We

also get some solid advice on fleet insurance and risk manage-

ment – key operational factors that all owners and operators

need to be aware of. We are offered some interesting insight into

the capabilities and ideal operation of supply chains, and uncov-

er how KwaZulu-Natal is becoming a national industrial hub,

along with how things are currently looking at the Port of Durban.

As always, a varied read. Enjoy!

Simon Foulds

Publisher Elizabeth Shorten

Editor Simon Foulds • [email protected]

Head of design Hayley Mendelow

Designer Kirsty Galloway

Contributors Raymond Abraham, Martin Bailey, Barney

Curtis, Rhys Evans and Mario Landman

Chief sub-editor Tristan Snijders

Sub-editor Beatrix Knopjes

Client services & production manager Antois-Leigh Botma

Production coordinator Jacqueline Modise

Marketing and digital manager Esther Le Roux

Marketing specialist Philip Rosenberg

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

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ISSN 1684-7946 © Copyright 2015. All rights reserved.

All articles herein Transport World Africa are copyright-

protected and may not be reproduced either in whole

or in part without the prior written permission of the

publisher. The views of the authors do not necessarily

reflect those of the publishers or FESARTA.

Editor in action

Staying safe is in your belt!

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5TWA | Jan/Feb 2015

FESARTA COMMENT

by Barney Curtis, CEO, FESARTA

THIS MILESTONE cannot be allowed

to pass without FESARTA paying tribute

to one of its most ardent supporters,

since it was formed in 1993.

That he chaired FESARTA for more than eight

years, gives testimony to his support for the

regional association.

It was not just his occupying the chairmanship

that we remember him for. He openly and pub-

licly voiced his support whenever the opportunity

arose. Whether at a regional conference, or at a

high-level meeting with overseas dignitaries, his

message was always the same, regardless of

who was listening – give support to FESARTA. He

always wanted action. He was tired of hearing the

same old problems over and over again.

Of course, he knew all the problems, right down

to the last detail. Nobody was better equipped for

this, because he wasn’t just a very senior person

in Cargo Carriers, one of the largest and most-

respected transport companies, but he was also

a ‘hands-on’ man. He travelled extensively and

picked up details from drivers, customs agencies,

transporters, financiers and anyone else who was

prepared to give information.

His knowledge of African countries is well

known and unlikely to be surpassed.

He could speak nine African languages with

exceptional fluency and socialised with many

leaders of these countries, and was always

up-to-date with the latest political happenings.

Of course, he read avidly about African affairs

and international finances. He knew why a coun-

try was going through difficult times and could

link the economy with its financial position. Even

potential investors would seek out his input on

where and how to invest.

Mike never baulked at what he needed to do

to achieve FESARTA’s objectives and always

responded to email requests with valuable input.

He was prepared to travel to any meeting any-

where on the continent, if it could help FESARTA.

There was at least one occasion where he used

the Cargo Carriers plane to take us stakeholders

to a meeting in Beitbridge! Even though Mike

spent many of his earlier years crawling through

the bush on some exercise or other, he never let

the side down when it came to being dressed

for the occasion. Jacket and tie, or suit, was the

order of the day.

I don’t think I ever saw him in a pair of shorts

and, when it came to a regional conference, or the

FESARTA AGM, it was only ever a neatly pressed

suit. We will all miss Mike very much.

For his outspoken approach, his knowledge, his

desire to help and his seemingly endless energy.

You are now at peace, Mike, though I’m sure

the trucking industry is still somehow with you!

Barney Curtis

In memoriumIt is with great sadness that I write this column following the passing of a true transport legend. Mike Scott passed away near the end of 2014 at the age of 75.

UPON HEARING OF this tragic loss, numerous industry profes-sionals offered their condolences:

Jean Kizito Kabanguka, manager: Transport and Infrastructure, AfB, Ivory CoastI am deeply saddened by the death of Mr Scott. I met with him in 2009 in Mombasa and was impressed by his dedication in serving the fed-eration, as well as his great sense of humour.

My deepest condolences to his family and FESARTA – his second family.

May his soul rest in peace.

Lovemore Bingandadi, transport specialist, SADC, BotswanaWe at SADC share Mike’s family’s loss of a loved one and FESARTA’S loss of a true champion and advocate of the trucking industry. I personally remember Mike fondly for his many jokes in Shona, my home language, and his untiring lobbying for the industry.

His memory will spur us to urgently complete the unfi nished business of harmonising transport regulations in our region.

Famba zvakanaka shamwari… Go well, my friend!

Dave Watts, SAAFF, DurbanI am so sorry to hear of Mike’s passing. He was a real stalwart in our region and our businesses. He will be sorely missed.

Paul Maiyo, chairman, Kenya Transport Association, KenyaWe are deeply saddened by the untimely death of Mr Mike Scott.

Mike’s death is not only a big blow to his family but also to the entire membership of FESARTA and indeed the larger transport fraternity, which he served with deep conviction, diligence and dedication.

We remember him as a solid voice of truckers during his tenure as chairman of FESARTA. Mike stood out as a champion of truth and justice, and was always prag-matic in his approach to matters of concern to members of the federa-tion and the industry. Mike will be dearly missed by all of us.

On behalf of the board of directors and members of Kenya Transporters Association, I wish to convey our deepest condolences to the family, friends and the entire membership of FESARTA for this tragic loss. May you fi nd peace, courage and strength in this time of grief.

May God rest his soul in everlasting peace.

s,

as

rs


COVER STORY

GROWING

WE ARE certainly very pleased with the

results we achieved during 2014, where

we closed the year with 12% market share.

We had 8% market share in 2012 and 10%

in 2013. We were somewhat surprised with the growth of

the extra-heavy truck market, considering the underlying

economic situation.

“However, the market was fairly robust with reasonable

customer confidence; although the market took a bit of a

dive in the middle of 2014. We are taking orders for 2015,

so the market seems to be holding up fairly well, and we

are pleased with our market share in South Africa.

Neighbouring countries“If we look at surrounding markets, Namibia will see

another record set in terms of truck volumes,

making us clear local market leaders, and in

Botswana, 2013’s record sales will be exceeded

as well.

“Tanzania has been a tough market for the

company due to a combination of heavy

rains destroying the roads and an influx of

competition from the Far East, which has

been challenging.

“These three countries are our captive

markets that fall under Scania Southern

Africa. We have also performed reason-

ably well in these three regions where we

work with independent importers – Zambia,

Zimbabwe and Malawi – and we are fairly

pleased with our growth here.

“There has been good growth in the export

market and we are starting an operation in Beira,

Mozambique. To date, we have sold a handful of

commercial vehicles there and significant further growth

is expected as we establish a new dealership in the port

town, during the first quarter of 2015. From a low base,

we foresee GDP growth in the country of between 7% and

8% and we also foresee an increase in demand for trans-

port in the region. It is important for us to be at Beira to

support our South African customers transporting goods

into Zimbabwe and, because of its strategic position,

we are also able to accommodate transport operating

in Tete. Mozambique is quite an exciting market for us in

the future.

dive in the middle of 2014. We are tak

so the market seems to be holding u

are pleased with our market share in S

Neighbouring countries“If we look at surrounding marke

another record set in terms

making us clear local mar

Botswana, 2013’s record sa

as well.

“Tanzania has been a to

company due to a com

rains destroying the road

competition from the Fa

been challenging.

“These three countrie

markets that fall unde

Africa. We have also

ably well in these thre

work with independent

Zimbabwe and Malawi

pleased with our growth

“There has been good g

market and we are starting a

Mozambique. To date, we hav

commercial vehicles there and signif

is expected as we establish a new d

town, during the first quarter of 2015

market share

Scania Southern Africa had a good 2014 and believes 2015 will also see growth, albeit not in similar

numbers. Steve Wager, MD at Scania SA, tells Simon FouldsSimon Foulds

how the company has grown and where it expects growth in 2015.

SCANIA

7TWA | Jan/Feb 2015

COVER STORY

Services“We have also seen good growth in both our

after-sales and services businesses. A new

service we offer customers is maintenance

of clients’ trailers. So we are creating a

one-stop-shop solution. Trailer maintenance

is offered in Europe but is fairly new in

South Africa.

“We will not be able to offer this service

across South Africa just yet due to the foot-

print of our dealerships and we are looking at

expanding this in the future,” explains Wagner.

Scania SA currently has 17 dealerships

in South Africa, two in Botswana, four in

Tanzania and three in Namibia. There are

two dealerships each in Malawi, Zambia

and Zimbabwe.

2015“We are expanding the Fleet Management

offering introduced in 2014. The ‘Control

package and Monitoring package’ was

already introduced in 2014. In 2015, we will

introduce further services such as ‘Driver

Coaching’, in which a driver trainer will moni-

tor the performance of a driver through the

FM system and give continuous coaching over the phone.

“In terms of product, the biggest event for us this year is

us refocusing on our construction vehicle range. We have

a proven product from Europe and will be relaunching our

products into the South African marketplace.

“On the pre-owned side of our business, we will continue

expanding our coverage. And regarding our rental busi-

ness, we have grown this sector to 400 vehicles and it

has become its own business unit within the company,”

says Wagner.

RegionsSince taking over the helm of the company in South Africa,

Wagner restructured Scania SA into five regions, each with

its own regional director.

“The idea behind this was to shorten the decision-making

process, empowering the directors to operate the business

locally, dealing directly with customer issues. It has paid

dividends and keeps us closer to our customers. We can

adapt fairly quickly to a customer’s situation and be more

flexible in running the overall business from Johannesburg.

“The country is far too big to handle everything from one

central location and customers appreciate the difference it

now makes for their operations.

Parts centre“We have worked hard at ensuring parts availability is

delivered in the shortest possible time, ensuring customers

experience minimal downtime.

“As a consequence of this, a new central parts ware-

house was opened in 2011. It is located in Johannesburg,

which has helped to cut lead times of parts into Southern

Africa dramatically.

“Over the past year, we spent time improving our system

and, from 2015, service will improve even further.

Driver training“Every vehicle sold includes two days of free driver training

and this year we are introducing Driver Coaching as part of

our Fleet Management solution.

“We know drivers can influence up to 60% of the total

cost of a long haul operation, so wise customers know how

important it is to continually train them.

“With fuel and tyres being a big part of operating costs, it

is important that drivers know how to save on the operator’s

fuel bill as well as wear and tear on tyres.

Operators“I think the pressure on operating margins for operators

will continue, forcing them to look even harder at total cost

of operations.

“How Scania can assist customers is through our Total

Operating Economy, which includes total cost of operation

plus uptime. Through this, we are able to present a good

offering to operators and, in speaking to customers to find

out what variables they look at before purchasing a truck,

we find, almost without fail, that the top three variables

are uptime, fuel economy and price. Price is usually third

because customers realise it is worth paying a premium for

a fuel-efficient, robust vehicle. Our whole philosophy and

approach is to work closely with the customer to find the

right total solution for them, which also includes finance

and insurance,” Wagner concludes.

OPPOSITE The Scania G-Series is a versatile and formidable range of heavy trucks

ABOVE Steve Wager, managing director at Scania SA

“We have worked hard at ensuring parts availability is delivered in the shortest

possible time, ensuring customers experience minimal downtime.”

Steve Wager, managing director, Scania SA

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REGIONAL NEWS Read more on www.transportworldafrica.co.za

IT IS ESSENTIAL for South Africa and Botswana to

grow economic ties and investments as this will form a

fi rm foundation for mutual benefi ts.

This is according to Minister of International Relations

and Cooperation, Maite Nkoana-Mashabane.

Addressing the second Bi-National Commission

between South Africa and Botswana, in Gaborone,

Nkoana-Mashabane said the existence of 34 signed

agreements and memoranda of understanding between

the two countries demonstrated the depth and extent of

bilateral cooperation.

States Nkoana-Mashabane: “Our task today is to review

progress made in the implementation of the bilateral

agreements/memoranda. It is only by working together

that we can succeed and move our cooperation forward.

“We have made good progress, but more remains to

be done.”

Strong cooperation exists between South Africa and

Botswana. The two countries continue to cooperate in

various fi elds such as energy, water, justice, immigration,

culture, transport, science and technology, defence and

security, agriculture, tourism, minerals, education, sports

and recreation, health, trade and industry, and issues

related to regional integration.

South African companies also remain some of Bot-

swana’s major trading partners.

SADC

Focusing on growing economic ties

CELEBRATING THE END of an era, UD Trucks donated the last of its U41

range, a UD40, to the Legends Rhino Orphanage in Limpopo.

As the last vehicle rolled off the assembly line in Rosslyn, staff gathered to

see the end of an era in the MCV range, as the company embarks on its new

range, to be introduced from 2015.

The company sold more than 13 000 units of the range since its introduc-

tion in 1996.

Rory Schultz, acting MD at UD Trucks Southern Africa, says, “Although this

might be the end of our current MCV range, UD Trucks has an exciting future

ahead of it. From 2015, we will be introducing various new models over the

following years, which is set to not just renew our product offering to our

customers, but also challenge the way one thinks about

the local transport industry.”

In the company’s tradition of celebrating the last unit

coming off the assembly line, management and staff

wanted to mark the occasion in a signifi cant way.

Schultz adds, “Seeing that the legendary U41 range is

now extinct, so to speak, we wanted to help the Rhino

Orphanage prevent a living legend, the rhino, from going

extinct as well.”

Aubrey Rambau, general manager of manufacturing at

the assembly plant, says, “It is a privilege to get involved

in an issue that affects the local community. Many of our

staff members who work on the assembly line have been

part of the U41’s journey since its introduction 18 years

ago. We are all proud to play a role in the production of

this legendary range, and even prouder that one of our

vehicles will be used for such a good cause.”

SOUTH AFRICA

A legend for a legendary cause

DENMARK IS AIMING to improve trade with South

Africa, utilising the country as a springboard into the

rest of the continent.

This is according to Mogens Jensen, Danish Minister

of Trade and Development Cooperation, following a meeting in Cape

Town with Rob Davies, Minister of Trade and Industry.

Total trade between South Africa and Denmark has steadily been on the in-

crease, with total trade at R2.9 billion in 2009 having increased to R3.4 billion

in 2011. In 2013, total trade increased to R4.8 billion.

South Africa and Denmark’s bilateral trade and investment relations are

governed by the European Union and South Africa‘s Trade, Development and

Cooperation Agreement.

Davies says, “The total exports to Denmark from South Africa increased

from R1 billion in 2009 to R1.4 billion in 2011, with the exception of 2010

(R917 million), 2012 (R1 billion) and 2013 (R890 million). The decrease in to-

tal exports from South Africa to Denmark in 2012 and 2013 can be attributed

to a decline in external demand, due to slow recovery in the EU.”

During their meeting, the ministers also discussed bilateral investment trea-

ties and the Tripartite Free Trade Area.

SOUTH AFRICA

Danes view South Africa as springboard into Africa

ing in Cape

aass

9TWA | Jan/Feb 2015

REGIONAL NEWS

ONCE ESTABLISHED, it is envisaged that the

Grand Free Trade Area

(GFTA) will be the larg-

est bloc on the African

continent serving as a

launching pad for the

establishment of the

Continental Free Trade Area in 2017.

Being launched in mid-December 2014, the GFTA, also

known as the Tripartite Free Trade Area of COMESA-EAC-

SADC, links 26 African countries. With a combined popu-

lation of 625 million people and a GDP of $1.2 trillion,

these states account for half of the membership of the

African Union and 58% of the continent’s GDP.

During a ministerial meeting of the Tripartite Sectoral

Committee of the Common Market for Eastern and

Southern Africa (COMESA), East African Community

(EAC) and the Southern African Development Community

(SADC) in Bujumbura, Burundi, in October, it was agreed

that the GFTA would be launched at the Tripartite Sum-

mit of Heads of State and Government to be held in

Egypt in mid-December 2014.

Sindiso Ngwenya, secretary general of COMESA and

chairperson of the COMESA-EAC-SADC Tripartite Task

Force, says, “The GFTA offers signifi cant opportunities

for business and investment within the bloc and will act

as a magnet for attracting foreign direct investment into

the region. The business community, in particular, will

benefi t from an improved and harmonised trade regime,

which reduces the cost of doing business as a result of

the elimination of overlapping trade regimes.

“The launching of the GFTA is the fi rst phase of

implementing a developmental regional integration

strategy that places high priority on infrastructure

development, industrialisation and free movement of

business persons.”

AFRICA

The Grand Free Trade Area

A SECOND COMPANY, City Couriers, has joined hands with the Mercedes-

Benz South Africa (MBSA) and Corridor Empowerment Project’s Fleet Owner

Workplace Programme.

The aim of the programme is to assist fl eet owners in taking a holistic ap-

proach to employee health and wellness, based on a proven model.

City Couriers is a logistics solutions provider with a nationwide and cross-

border footprint that operates more than 250 vehicles.

The Fleet Owner Workplace Programme is an extension of the MBSA work-

place wellness strategy that has entrenched the health of the company’s em-

ployees for over a decade, adding to the company’s ability to achieve profi table

growth and contribute to the socio-economic success of the country.

Dr Clifford Panter, manager: Health, Safety, Compensation and Benefi ts,

MBSA, states, “Our drive for excellence translates into benchmark achieve-

ments in the fi eld 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 fi rst-hand experience of the benefi ts of a healthy workforce to the

sustainability of our business.”

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 an education

and basic health-care service

to truck drivers along the

major freight routes in Southern

Africa. This includes dissemina-

tion of information, and testing

and treatment of HIV/Aids and

other lifestyle illnesses.

SOUTH AFRICA

Supporting fl eet owners in educating driver wellness

IN A MOVE that promises to rid Kenyan roads

of overweight trucks, transport companies

operating along the Northern Corridor have

embarked on self-regulation to curb overload-

ing of trucks.

Despite the presence of tough law enforce-

ment, trucks in the region – especially those

leaving the Mombasa port – have been

accused of overloading as transporters seek

to squeeze more profi ts from each trip made

along the corridor. The development of the Axle

Load Control Charter was spearheaded by the

Northern Corridor Transit Transport Coordina-

tion Authority and the Kenya Transporters

Association, whose members control more than

70% of the total heavy commercial vehicle fl eet

operating along the Northern Corridor.

Government agencies that are part of the

effort include the Kenyan Ministry of Transport

and Infrastructure, the National Transport

Safety Authority, Kenya Maritime Authority,

Kenya Ports Authority, Kenya Police Service,

Kenya Revenue Authority and Kenya Pipe-

line Company.

EAST AFRICA

Self-regulation among Northern Corridor truckers


COMMERCIAL VEHICLES

HCV trucks 2015Simon FouldsSimon Foulds speaks to some of the big names about what the heavy commercial vehicle sector can expect in 2015.

OPERATING COSTS are the

most important

factor to take into

consideration before purchas-

ing a heavy commercial vehicle,

especially when you consider

that fuel and tyres constitute

60% of a truck’s operating costs.

What can the market expect this

year within the heavy commer-

cial vehicle sector?

Are you feeling optimistic about business in 2015?RS We at UDTSA are very

optimistic about the road ahead.

During 2014, we have seen the

commercial vehicle industry

perform better than expected

against all the difficult economic

conditions and factors. The

last two months have showed

a great improvement in the

purchasing managers’ index,

which is a result of expanding

manufacturing activities after

recent weakness. Overall, it looks

like South Africa’s economy is

on its way to recovery and we

are optimistic to see this trend

continue into 2015.

AT Yes, we are surely

positive. We expect modest

growth in South Africa next

year and even greater growth

in the Southern African region.

With the financial recovery in

Europe and North America, the

demand for African commodities

will increase. Scania South

Africa will have an even broader

product range in 2015 and it will

continue to expand, in order to

meet more customer needs from

different industries and types

of transports.

EvdB FAW has a strong

range of competitively priced

models across the segments,

and we are sure that we will

be in a position to fill the

requirements of a big part of

the market – especially those

looking for vehicles that are

tough, reliable and affordable.

Our vehicles are known for their

good fuel efficiency and this

in itself will play a big part for

decision-makers.

Do you have any new heavy vehicles in the offing? RS UD Trucks

Southern Africa is particularly

excited to be launching a new

extra-heavy commercial truck

into the Southern African market

in the first quarter of 2015. The

Quester will be a complementary

product to our current product

line-up, and the Quon and

Quester will be targeted at

different applications and

industries in the EHCV segment.

AT It is of particular importance

to Scania to expand its range of

vehicles, both trucks and buses,

driven by alternative fuels. This

will be an important contribution

to our aim of optimising

transport solutions and

minimising carbon footprint. We

will also introduce a wider range

of products for the construction

sector, backed up by tailored

service, finance and warranty

packages. This will bring added

value to the operators doing

tipping and mixing operations.

EvdB We are not currently

planning on launching any new

heavy commercial vehicles in

2015. We have a very exciting

new medium commercial vehi-

cle that we will be bringing into

the market.

Are there any new technologies you have recently introduced or will be introducing to market in the near future?Quon Green EHCV UD Range

Rory Schultz, acting MD, UD Trucks

Eugene van der Berg, national sales manager, FAW

Alexander Taftman, marketing director, Scania

11TWA | Jan/Feb 2015

COMMERCIAL VEHICLES

RS The Quester will be

introduced with factory-fitted

telematics, as well as a unique

fuel couch system that will help

improve drivers’ economical

driving abilities. Our cabs

are designed in a way that

everything is in sight, in reach

and easy to control. The

Quester’s cab is a well-planned

driver’s environment that results

in safer and more efficient

driving. The cab boast features

like an ergonomic dashboard

design, driver’s information

display, in-vehicle diagnostics,

plenty of storage space, a

safety-tested cabin (passed the

ECE R29/AIS029 crash test), and

ergonomic driver and auxiliary

passenger seats.

AT In Q3 2014, we introduced

the Scania fleet management

system. The entry level moni-

toring package comes free of

charge with every new Scania

truck or bus and will help all

operators get a better view on

the basic cost drivers of their

transport operation. We have

also upgraded our vehicle range

for fuel and chemical transports

to be in line with the latest safety

levels applied in Europe. This

includes adaptive cruise control,

lane departure warning and an

advanced emergency brake

system. Combined, these fea-

tures not only drastically improve

safety, they also creates a more

comfortable driving environment.

EvdB FAW trucks are built

to last and are strong and

rugged enough to run in the

sometimes-harsh African envi-

ronment. This also means that

the vehicles are solid and safe

enough to protect the driver. In

the current economic situation,

simplicity is the key to keeping

vehicles efficient.

Finally, what advice do you have to offer owners and operators? RS Buy the

correct truck for the application

– buy a dependable truck that’s

easy to maintain and not too

complicated, but which offers

you all the bells and whistles

you need but none you don’t.

Ensure there is enough support

from accredited dealers along

the routes.

AT Look beyond the price tag

of the vehicle. Take all cost and

income factors into considera-

tion before you make a decision.

Do not just buy a truck or a bus,

buy a total transport solution

and, with that, build a partner-

ship with a supplier that you can

truly rely on.

EvdB A fleet owner should

look for a company that – while

being a major player in the

industry, with a national after-

sales support footprint, includ-

ing an AA assist facility – is still

small enough to care about

each and every fleet owner and

vehicle. The simplicity of our

vehicles plays a big role when

going cross-border, as we all

know the tough conditions and

poor roads can put a lot of

pressure on the performance of

your vehicle.

Scania R-Series range

“Look beyond the price tag of the vehicle. Take all cost and income factors into consideration before you make a decision.” Alexander Taftman, Scania


Manufacturers are expanding their ranges, targeting the FMCG market where Manufacturers are expanding their ranges, targeting the FMCG market where

smaller loads can be transported with ease during inner-city travel. smaller loads can be transported with ease during inner-city travel. Simon FouldsSimon Foulds

looks at the models on off er to the FMCG market, asking manufacturers why their looks at the models on off er to the FMCG market, asking manufacturers why their

vehicles are ideal for South African cities and operating conditions.vehicles are ideal for South African cities and operating conditions.

COMMERCIAL VEHICLES

Why should FMCG companies utilise your light commercial vehicle? LN Our light commercial

vehicles such as the Chevrolet

Spark Pronto and Utility and

the Isuzu KB have low running

costs backed by a five-

year/100 000 km warranty, with

strong after-sales support from

our parts distribution centre

located in Port Elizabeth.

JS Volkswagen Commercial

Vehicles offers the largest range

of panel vans and pick-ups in

South Africa. The panel van

offering ranges from the Caddy

(>700 kg payload/3.2 m3 load

space for the Caddy Panel Van

and 800 kg/4.2 m3 for the Caddy

Maxi Panel Van) through to the

Transporter (1 000 kg/6.7 m3) and

the Crafter (1 500 kg/9 m3 for the

Crafter 35 and 2 400 kg/15.5 m3

for the Crafter 50). The pick-up

range includes the Transporter

and the Amarok (both in single

and double cab). Over and

above exceptionally fuel-efficient

2.0 TDI engines across the

range, the Caddy Panel Van also

offers a 1.6 ℓ petrol engine. The

range delivers class-leading fuel

economy, which benefits cost

of ownership.

DvdM We have noticed

a general shift in business

requirements to reduce

inventory levels to the lowest

levels possible. Simply put,

inventory is cash tied up and

thus restricts one very important

business survival element – cash

flow. One of the options for a

company to reduce inventory

levels requires delivery of goods

in smaller batches and more

frequently, as and when required.

Recognising this shift in business

requirements, it is recommended

that suppliers of goods explore

more cost-effective transport

solutions that will enable them

to deliver smaller batch orders,

faster and more efficiently. Given

today’s challenges of traffic

congestion and high fuel cost,

transporting goods in large,

underutilised delivery trucks is

not the most cost-effective way

of delivering goods. Utilising

LCVs, and to some extent MCVs,

in lieu of HCVs could offer some

significant cost savings for

a company.

DS The H100 has proven

itself not only to be very reliable,

but also very versatile, and

capable of fulfilling many different

applications. The totally flat

load deck means no space is

wasted on protruding wheel

wells, which means more cargo

can be loaded. Fitting a canopy

VW Caddy

Expanding into the


COMMERCIAL VEHICLES

can further increase the volume

that can be carried. Backed

by an excellent warranty and

roadside assistance, downtime is

minimised and, with the standard

service plan that is included,

customers can budget better for

maintenance costs. Loading and

offloading usually gets done by

hand, therefore a low deck height

is ideal.

NK The latest addition to the

growing range of Foton Tunland

one-tonne pick-ups, the single-

cab workhorse, does what its

name suggests by being an

excellent all-round vehicle for a

multitude of applications.

This new workhorse is far

from being a stripped-down,

budget bakkie. Instead, it

has a car-like interior.

Why are your vehicles the best in terms of fuel consumption in inner-city travel? LNThe Spark Pronto uses

only 7 ℓ/100 km in urban

driving (5.4 ℓ combined),

making it the lightest LCV

in South Africa in terms of

fuel usage. Our Utility 1.4 is the

lightest vehicle in terms of fuel

consumption in its class, using

only 9.2 ℓ/100 km in the urban

environment (7.2 ℓ combined).

The Isuzu KB 2.5 LEED low-

pressure turbo engine model

delivers fuel economy of just

7.9 ℓ/100 km. The vehicle is also

fitted with low-rolling-resistance

highway tyres for maximum

fuel efficiency.

JS Our 2.0 ℓ TDI engines deliv-

er best-in-class fuel consumption,

and high torque availability offers

ease of driveability. The entire

range also offers class-leading

safety features, including driver

airbag, ABS and ESP.

DvdM Ford Motor Company

elected to focus on four key

brand pillars – quality, green,

safe and smart – when designing

vehicles to provide fleet custom-

ers with the best transport solu-

tion for most business applica-

tions. By designing and building

quality transport solutions that

meets customer expectations

and incorporating sophisticated

system technology systems to

ensure maximum safety for the

occupants and other road users,

Ford products feature smart, intu-

itive technologies such as sync

with Bluetooth and voice control

(on certain models) designed to

connect with the world in an easy

and safe way. Considering Ford’s

focus on sustainability, we are

focusing on creating vehicles with

improved fuel economy, reduced

CO2 emissions and, very impor-

tant for the fleet owner, a lower

overall cost of ownership. The

Ford Transit 2.2 offers a com-

bined fuel consumption as low

as 7 ℓ/100 km and CO2 as low

as 186 g/km. Additional features

such as a shift indicator, provides

further opportunities for achieving

additional fuel savings.

DS The H100’s 2 600 cc

naturally aspirated engine deliv-

ers very good fuel consumption,

and the engine power matches

the gross vehicle mass of the

vehicle perfectly.

NK The Foton Tunland single-

cab workhorse not only offers a

load capacity of 1 105 kg but its

under-stressed, 2.8 ℓ Cummins

turbo-diesel engine, which pro-

duces 96 kW, is also very fuel

efficient in urban conditions,

while having the performance

to handle inter-city deliveries

as well.

With the rise of e-commerce and more customers doing their grocery shopping online, why are your vehicles ideal for this growth area? LN The Spark Pronto fits the

bill perfectly with a portioned

load area capable of carrying

275 kg/876 ℓ, without the need

to fit a canopy at extra expense.

The Utility takes care of the

needs of those looking for a

more traditional, yet still compact,

bakkie alternative.

JS Vehicles like the Caddy,

Transporter and Crafter make

ideal sense for such deliveries.

These vehicles are suitable for

varying load sizes, and up to the

Transporter, can gain access to

any parking area.

DvdM A key factor that comes

into play is transporting goods in

a safe and secure environment.

Both Ford van offerings – the

Ford Transit and Ford Transit

Connect – offer the best of all

worlds. Great fuel economy with

a variety of active and passive

safety features, ease of driv-

ing and manoeuvrability, and of

course three large access doors

for loading and offloading are key

critical features for any goods

delivery application.

DS Space is often a problem

with inner-city deliveries, and only

vehicles with small turning circles

and a low height can truly do the

job. While home deliveries for

items used daily in households

are gaining popularity, the H100

has already found its way into a

number of company fleets. Due

the big volume capacity and car-

rying capability of the H100, mul-

tiple drops can be done before a

vehicle needs to return to a depot

to be loaded again.

NK The Tunland is compact

and easy to drive, with a good

turning circle, making it conveni-

ent to drive in traffic-laden urban

conditions. The controls are light

and equipment levels are high to

ease the job of the driver.

• Lunga Ntsendwana

(manager: Product Com-

munications, General

Motors SA)

• Jaco Steenkamp (gen-

eral manager: Sales and

Marketing, Volkswagen

Commercial Vehicles)

• Dawid van der Merwe

(manager: National Fleet,

Ford South Africa)

• Deon Sonnekus (general

manager: Corporate Com-

munications, Hyundai Auto-

motive South Africa)

• Nicola Kirkbride (region-

al sales manager, Foton)

TWA speaks to

General Motors’ Pronto

FMCG market


Harmonising vehicle load management within Harmonising vehicle load management within

East and Southern Africa was discussed over East and Southern Africa was discussed over

two days in Gaborone, Botswana. Organised two days in Gaborone, Botswana. Organised

by SADC and funded by the European Union, it by SADC and funded by the European Union, it

attracted 100 delegates from across the region.attracted 100 delegates from across the region.

The road to vehicle load management

COMMERCIAL VEHICLES

FESARTA’s BARNEY CURTIS was in attend-

ance and explains what important objectives

were discussed to develop and adopt a strategy

ensuring harmonised vehicle load management

that would be acceptable to all member states of the

COMESA, EAC and SADC Tripartite regions.

“It is extremely important to create one strategy and

implementation plan for the Tripartite; at the same time,

ensuring the agreed measures are focused, synchronised

and coordinated. This will be aimed at supporting mem-

ber states in implementing the relative legislature in their

respective countries,” explains Curtis.

“This will

ensure that

t h r o u g h o u t

the region the

policy regulatory

systems and standards at

national and corridor level, nec-

essary for harmonised vehicle

load management in the ESA

region, are implemented within

each country’s legislature.”

The objectives of the workshop

included setting up the structures to set the standards

and limits, and to monitor and evaluate the process. It built

on various preceding events, going back to the Nairobi

workshop in 2008 and the EAC project in 2011.

According to Curtis, at the top of the structure – at

Tripartite level – there would be a working group on vehi-

cle load management (VLM), which would be part of the

infrastructure and services sector.

An MoU to facilitate the implementation of the plan was

drawn up and signed by all member states.

will

that

h o u t

ion the

regulatory

and standards at

and corridor level, nec-

for harmonised vehicle

anagement in the ESA

are implemented within

untry’s legislature.”


COMMERCIAL VEHICLES

“There were many challenges to domesticate and

implement the Tripartite VLM and MoU strategy and

implementation plan.

“A schedule was drawn up, showing the different

elements of the plan, the time span for imple-

mentation, the responsible entity and

the key performance indicators.”

The road ahead for the plan is as follows:

• ensure senior officials adopt the plan agreed upon on

the final day of the meeting

• update the plan with further inputs from member

states, through circulating a questionnaire

• cost the activities, develop a budget and

source resources

• consolidate all the above and sub-

mit the 2015 to 2020 plan to the

ministers for approval. This is

to be achieved in the first

quarter of 2015.

Simon FouldsSimon Foulds speaks to Clinton Holcroft, managing director, Serco, about the speaks to Clinton Holcroft, managing director, Serco, about the

role trailer manufacturers play in creating tailored, cost-saving solutions for role trailer manufacturers play in creating tailored, cost-saving solutions for

transport operators.transport operators.

Meeting specific needs

THE TREND NOWADAYS is to design and build

trailers tailor-made for the specific needs of a cus-

tomer. Trailers can have a significant impact on a

transporter’s operating costs and operators need

to take into consideration their specific needs. Says Holcroft:

“Choosing the right trailer is important. As an example, our

lighter-weight trailers give the customer extra payload and

also reduce fuel costs with lower rolling resistance. We also

have solutions for customers looking to carry high volumes

at cheaper running costs. Aerodynamic accessories can

also curb fuel costs.

“We are continuing to improve efficiencies so that we can

reduce costs and source materials globally to offer more

competitive prices. We also look to source accessories such

as load-securing devices, which can assist customers in

solving their challenges, thereby giving them the edge with

the latest innovations.”

Understanding what customers’ objectives and require-

ments are – anything from refrigeration to multiple stops is

required – is key to delivering an ideal solution.

“We are able to customise the product to meet unique

customer requirements. With our technical department,

we can develop the trailer to suit client requirements. At

the same time, with us being specialists, we have vast

experience and the technical know-how to create solutions

for our customers. We have invested in upgrading the

Johannesburg and Durban factories to allow greater space

and improved plant layout to maximise production efficien-

cies. We also invested in a new panel press to be commis-

sioned in 2015 to enable us to build panels on par with the

best in Europe.

“We have seen noticeable growth in our sales in neigh-

bouring countries. We currently have preferred partners that

we work with in Mozambique, Namibia and Zimbabwe. We

hope to grow this market in the future,” announces Holcroft.

Serco breaks ground for extensions to KwaZulu-Natal trailer plantBuilding works have started on extensive additions to the

manufacturing plant at the Durban headquarters of Serco.

The new buildings at the factory in Phoenix Industrial Park

will accommodate a state-of-the-art panel press as well as

improvements in factory layout for increasing production flow

and efficiencies.

The company’s Repair Division would move into the new

buildings situated a short distance up the road from the exist-

ing plant in order to cater for the increase in space for new

vehicle manufacturing. “The extension and upgrade of our

Durban manufacturing operation will increase the under-roof

area by more than 3 000 m2,” concludes Holcroft.

Clinton Holcroft, managing director, Serco

TRAILERS



TYRES

Every day of the week, thousands of trucks take to the roads – most of them on long-Every day of the week, thousands of trucks take to the roads – most of them on long-

haul journeys of delivery. How safe are those journeys?haul journeys of delivery. How safe are those journeys?

Putting tyre safety first

A RECENT STUDY indicates that in excess of

60% of trucks in South Africa are not roadworthy

– a figure that should provide a serious wake-up

call to every truck owner in the country. Transport

World Africa speaks to Jaco Venter, partnership programme

manager at Michelin Tyre Company SA, to find out what

advice he would offer truck operators.

“Not only are trucks poorly maintained, drivers are often

incentivised to arrive at destinations earlier than scheduled.

This results in them skipping the necessary rest breaks

and driving faster to make up time. In fact, it is not uncom-

mon for drivers to work a straight 24-hour shift – with

predictable consequences.

“In order to address these problems, new laws are being

promulgated, which hold the consignor, the consignee and

the transporter liable for accidents. I advise truck owners

to ensure:

• every driver’s licence is checked for validity

• drivers have regular eye tests, blood sugar and blood

pressure tests, as well as TB tests

• RTMS accreditation is obtained and the COF (certificate

of fitness) and PDP (professional driver’s permit) are

renewed annually

• tyres and brakes are regularly checked and maintained.”

With its involvement in tyre technology, the company has

embarked on setting up Michelin Truck Service Centres

throughout South Africa to provide a convenient, high-quality,

safety-focused service to the truck and bus industry. The

affordable services on offer include alignment and balanc-

ing, fleet inspections, stripping and fitting, tyre repairs, tyre

re-grooving, pressure checks, surveys at the point of sale and

on-site vehicle services. “Our aim is to assist truck and bus

companies to make profits that are not at the expense of lives

or vehicles,” concludes Venter.

“Not only are trucks poorly maintained, drivers are often incentivised to arrive at destinations earlier than scheduled.” Jaco Venter, Michelin SA

ESAIMESA

I S S N 0 2 5 7 1 9 7 8 V o l u m e 4 0 N o . 1 • J a n u a r y 2 0 1 5 • R 5 0 . 0 0 ( i n c l VAT )

The official magazine

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LUBRICANTS

January 2015 saw a dramatic price decrease in fuels in January 2015 saw a dramatic price decrease in fuels in

South Africa. With the right lubricant, these savings may South Africa. With the right lubricant, these savings may

be extended further with signifi cant improvement to be extended further with signifi cant improvement to

operating costs. operating costs. By Raymond Abraham

Enhancing the bottom line

WITH SO MANY South African goods and

services transported by road, road transport

and logistics account for approximately 10%

of South Africa’s GDP. Therefore, efficient fleet

management remains critical for the growth of the economy.

Fleet managers are under significant pressure to deliver

profits that reflect the potential of the industry despite being

impacted virtually immediately by the fluctuating oil price.

Oil is extremely sensitive to developments in the Middle

East; as a result, local fleet managers’ profits are continually

under threat due to fuel price volatility, making it difficult to

project – and maintain – margins.

Opting for diesel vehicles is proving to be a smart way to go

in many instances, given the relatively lower cost of diesel and

correspondingly better fuel economy that can be achieved

when compared to petrol engines.

Introducing more efficient vehicles is part of the solution and

matching the correct lubricant to the vehicle is equally impor-

tant. Increasingly, fleet managers are now combining original

equipment manufacturers (OEM) and lubricant technology

to improve efficiencies. This is where operators are able to

extract ‘extra kilometres’ from their fleets, as well as reduce

maintenance requirements, CO2 emissions and smoke.

A basic understanding between synthetic and mineral oils

can give fleet managers the confidence to gladly accept an

oil change, which will ultimately lead to a cleaner engine that

operates more efficiently, delivers more power and consumes

less fuel.

Every fleet or maintenance engineer wants to be certain

that, when using a lubricant in their fleet, it provides the

right level of protection for the equipment. The lubricant

must reduce friction and protect the engine against acids,

deposits, and wear in extreme temperatures and in a range of

operating conditions.

The introduction of synthetic and semi-synthetic oils repre-

sents a significant change for the heavy-duty transport indus-

try. Advanced lubricant technology, developed by Shell’s R&D

team, enables fleet and maintenance managers to mitigate

the risk of breakdown and keep vehicles on the road for long-

er. Thanks to modern refining technology, today’s high-quality

mineral oils provide adequate equipment protection and offer

many benefits over traditional mineral-oil-based engine oils.

Traditionally, lubricants have been based on mineral oil – a

component of crude oil used in thousands of everyday appli-

cations from engines to cosmetics. Mineral-base oils however,

are complex mixtures of naturally occurring hydrocarbons

that may contain impurities. Synthetic lubricants, on the other

hand, are made from chemicals selectively chosen and free

of impurities.

An important function of lubrication, for example, is ensur-

ing the engine continues to be protected under extreme

temperatures, including cold starts, and at high operating

temperatures. High-quality synthetic-base oils are engineered

for excellent low-temperature flow properties, high resist-

ance to thermal degradation and low oil consumption. When

combined with advanced additive technology, this results in

products that are well placed to deliver best-in-class engine

protection. Compared to some mineral oils, this means that

synthetic products can help to extend equipment life.

The latest generation of synthetic lubricants also fulfils addi-

tional functions that can help improve

cost efficiencies. Traditionally, delivering

enhanced fuel economy meant lower

viscosity (thinner) oils, which helped to

reduce friction in the engine but with the

perceived trade-off of reduced engine

protection. With the latest technologies,

this trade-off is no longer necessary.

High-quality synthetic-base oils and

advanced additive technology used in

synthetic products deliver the best all-

round engine protection.

As CO2 emission standards continue

to be driven by regulators, and may

contribute to fleet costs through car-

bon taxes, Shell has spent many years

developing and understanding the sci-

ence behind energy-efficient lubricants,

and now offers a range of lubricants that

delivers reduced CO2 emissions.

Raymond Abraham, commercial technical manager, Shell SA


FLEET MANAGEMENT

Gulfstream Energy formed a new company Gulfstream Energy formed a new company

as part of its supplier development as part of its supplier development

commitment to Transnet. commitment to Transnet. Simon FouldsSimon Foulds fi nds fi nds

out about the implications for the industry.out about the implications for the industry.

Empowering independence

AS A SUPPLIER of quality and innovative petro-

leum products and one of South Africa’s larger

independent wholesalers, Gulfstream Energy

recently formed a new company – G&T Tsela – in

conjunction with Tipublox Petroleum.

As one of nine companies collectively awarded the R15.5 bil-

lion Transnet contract at the end of 2013, and as part of the

latter’s Supplier Development Programme, Gulfstream made

a commitment to place 20% of its Transnet fuel delivery

with an empowered fuel transporter. Delivering on its word,

Gulfstream decided to take it one step further and create an

entirely new entity in conjunction with Tipublox.

The Gulfstream portion of the tender will see the delivery of

significant quantities of fuel to all ports within South Africa for

a period of five years.

“Even more significantly, it has provided us with the oppor-

tunity to play a greater role in the develop-

ment and sustainability of our local indus-

try,” says Shane Jegels, chairman and CEO

of Gulfstream Energy.

Adds Phenyo Ntshabele, financial direc-

tor of Tipublox Petroleum: “As an inde-

pendent wholesaler, we need to create

our own logistics capability. “Logistics and

the required infrastructure demand sig-

nificant capital. Up until now, Tipublox has

been making use of Gulfstream’s logistics

capability to ensure delivery of its own fuel

orders. The new company will see Gulfstream

funding the required equipment in addition

to awarding a contract to deliver 20% of the

Transnet order.”

The relationship between Gulfstream and Tipublox

has existed for many years. Having received its independent

wholesale licence in 2010 from the Department of Energy,

Tipublox found itself in a situation experienced by many other

independent wholesalers.

“It comes down to security of supply,” says Ntshabele.

“In order to secure customers, you need to guarantee

product supply. However, in order to secure supplier rela-

tionships, especially with the larger players, one needs to

have customers.”

This led Tipublox to approach Gulfstream Energy. With a

value offering, which encapsulates making fuel available to

independent wholesalers who are not able to access product

as efficiently, Gulfstream has subsequently being supplying

as much as 80% to 90% of required product to Tipublox for

the last two years.

The relationship between these two independent wholesal-

ers is about so much more than product.

“We benefit from the entire supply chain through Gulfstream,”

says Ntshabele. “In addition to fuel supply, we receive back-

end office support, the passing on of rebates ensuring

Gulfstream always delivers the best price possible, as well as

logistics capability.”

The significance of this new venture, proposed and spear-

headed by Gulfstream, will see Tipublox now able to indepen-

dently meet its own logistics requirements, further enabling

them to take another step forward as an independent whole-

saler. It is an exciting time for South Africa’s fuel industry,

which is seeing an opening up of opportunities for independ-

ent wholesalers not previously available.

“It’s not about competing with the larger oil companies, but

rather about carving a niche for ourselves as independent

wholesalers, working cooperatively with the larger players

for the benefit of our country’s fuel consumers,” says Jegels.

It’s also about working together as independent wholesalers.

“With Gulfstream, there is an understanding that we are

working together to achieve something bigger than our-

selves,” says Ntshabele. “They are empowering us with

regards to business in general and our place in the local

petroleum industry.

“If I could sum up our relationship with Gulfstream in one

phrase, it would be that of ‘mentor and big brother’,” contin-

ues Ntshabele. “Dealing with one of the larger oil companies

would render us a number. At Gulfstream, we are part of the

family and the knowledge and support we receive from its

management team continue to be invaluable.”

TipubloxTipubloxAn independent wholesaler and current Gulfstream customer who shares equal ownership with Gulfstream in G&T Tsela. The new entity’s main focus will be logistics within the South African fuel industry.

Phenyo Ntshabele and Shane Jegels


FLEET MANAGEMENT

The world of commercial vehicles is fraught The world of commercial vehicles is fraught

with many challenges that can make business with many challenges that can make business

life very tough, irrespective of whether you life very tough, irrespective of whether you

run a fl eet of fi ve or fi ve hundred trucks. run a fl eet of fi ve or fi ve hundred trucks.

Simon FouldsSimon Foulds speaks to Wayne Rautenbach speaks to Wayne Rautenbach

about securing ideal insurance.about securing ideal insurance.

Advice wheninsuring

AN INTEGRAL part of any fleet management

operation is ensuring the operator has ade-

quate insurance. If your operation is not properly

insured then a truck jackknifing and having goods

fall off its back could be financially damaging.

Wayne Rautenbach, head of Regent Commercial Vehicles,

explains what fleet operators should look for when it comes

to insuring their fleet and offers some advice on getting better

insurance deals.

“Partnering with the right insurance company for your needs,

in essence, entails ensuring the best insurance policies are

in place so the operator can save costs, reduce risk and

improve efficiencies.

“This is achieved by ensuring the insurance company trans-

forms all relevant data and information created by the tracking

and monitoring systems into intelligence that can be utilised

as a management tool to proactively bring about cost savings

and enhanced efficiencies.

Driver training“Driver training is also important and can attract major ben-

efits for the client such as:

• the driver training could well lead to improved claims expe-

rience, which in turn can lead to savings in premiums and

excesses paid in the future

• with accidents being minimised through driver training, the

insured will automatically be saved the inconvenience and

financial consequences (direct and indirect) that automati-

cally result following an accident

• foreign driver access could be waivered

• having an accredited assessment, training, approval

and certification for the driver gives them a sense of

achievement and pride, which is beneficial to any

transport company.

“It is also extremely important to train drivers in the trucks

that they drive in, fully loaded, otherwise it becomes a

fruitless exercise.”

Cross-border cover“It is extremely important for cross-border operators to ensure

they have the correct insurance in place. Key to this is cross-

border towing cover, also known as repatriation cover, as well

as cross-border riot and strike extension.”

Goods in transit“Another important aspect for operators is ensuring that the

goods-in-transit policy is comprehensive and the insurance

company offers them the most value-added benefits at no

additional cost. These benefits can include environmental

clean-up costs, protection, along with driver wilful misconduct

and deterioration of temperature-controlled cargo following

the breakdown or malfunction of the refrigeration unit.”

Telematics“In conclusion, I would like to offer the following advice per-

taining to telematics, which has provided the technology base

for greatly increased efficiency of fleets as well as improved

security, depending on the system in use.

“The technology itself is in essence ‘over-capable’, in that

fleet owners are flooded with mountains of data and spread-

sheets that cannot be dealt with or responded to

efficiently. This is why it is important for the insurer to

partner with the fleet owner, assisting them to manage

their telematics data thereby identifying key issues

operators need to address. In doing so they can save

both time and money; not only on their insurance, but

also on their operations as a whole.”

“Partnering with the right insurance company for your needs, in essence, entails ensuring the best insurance policies are in

place so the operator can save costs.” Wayne Rautenbach, head of Regent Commercial Vehicles


Simon FouldsSimon Foulds speaks to Andre du Sart, speaks to Andre du Sart,

principal broker and national commercial principal broker and national commercial

products manager for Aon South Africa, to products manager for Aon South Africa, to

fi nd out how insurability can be maintained fi nd out how insurability can be maintained

while operating a complex network of while operating a complex network of

thousands of trucks and buses.thousands of trucks and buses.

strategies

REDUCING OPERATIONAL costs and manag-

ing exposure to risks demand a robust, effec-

tive risk management programme to ensure

the business is able to grow. Adopting high

standards for risk assessment has ongoing benefits across

the business by identifying risks before they happen and

thus reducing costs – both financial and human – as well as

managing the insurability and the cost thereof for your fleet.

Du Sart explains: “Given the tough economic climate,

the reality is that the insurability of commercial fleets is

no longer a simple ‘given’ as underwriters have become

FLEET MANAGEMENT

increasingly risk selective and expect clients to have a prop-

er plan in place to minimise and mitigate risks. The empha-

sis right now must be on the preparation of a scientifically

grounded insurance proposition for transport operators

and their assets, premised on structured risk management

interventions and risk retention.”

From the outset of an insurance application and even

at renewal time, a thorough risk audit that identifies and

addresses weak links in the insurability of a fleet or business

is essential in order to prepare a case for the underwriters.

This also provides a basis from which to evaluate the risk

financing options available which may include elements

of self-funding of the risk (own cash resources) as well

as insurance to manage and recover any losses should

they occur.

“Assessments may differ from case-to-case depending

on the nature of the business and the associated risks, but

there are common elements. Not all of them are necessarily

directly insurance related, but as a collective they contribute

towards the insurability of the fleet. For example aspects

such as regular maintenance, avoiding overloading, use of

genuine parts, implementation of vehicle tracking and fleet

management systems including telematics, driver training

and health checks and so on are all important check points

that can help avoid unplanned and increased maintenance,

breakdowns, vehicle damage, accidents, thefts and so on,

all of which essentially boils down to an insurance issue at

the end of the day.”

“Effective claims management is important as well, in that

control of a claim from the scene of an accident or incident

Mature risk retention

A thorough risk audit that identifi es and addresses weak links in the insurability of a fl eet or business is essential in order to prepare a case for the underwriters


FLEET MANAGEMENT

and taking ownership of the repair pro-

cess helps with the cost of each and

every claim, which, in turn, generates

a good claims history that underwriters

acknowledge. These and many other

interventions generate economies that

can be used across the business to

improve the bottom line directly and

indeed allow the business to grow

and expand.”

Most crucially though, having such

a mature risk management approach

in place provides invaluable actuarial

and statistical information in terms

of risk patterns and trends, which in

turn will inform the nature of the risk

retention structures to be implemented

such as an aggregate fund or premium

deposit burner.

An aggregate fund and premium

deposit burner are mechanisms aimed

at fleet owners who better manage

their risk and insurance costs, all of

which are premised on having a mature

and scientific risk retention strategy in

place from the outset. These mecha-

nisms work as follows:

Aggregate fundThis involves a measure of self-insurance whereby the

business sets aside a portion of the premium funds, usu-

ally off balance sheet, and often in a self-fund. This fund

would cover any specified claims events up to a specified

limit (called a stop loss) while the insurer would pick up any

claims over and above that limit.

To illustrate, if the total annual premium for a fleet is R2 mil-

lion, this could be split on say a basis of R1 million which

goes into an aggregate fund which would cover claims for

own damage, windscreens and so on up to the specified

limit. The insurer would still cover any ‘catastrophic loss’ as

well as the balance of any claims that are above the stop

loss limit, or if the fund is depleted. Let’s say the stop loss

limit is R250 000. For any claims under this amount, the cost

would be covered by the aggregate fund. But if the claim

value is say R350 000, the aggregate fund would cover the

first R250 000, while the insurer would pick up the balance

of R100 000.

The client in conjunction with their broker would define up

front what the aggregate fund would cover, for example own

damage, assessor’s fees and so on. Aon usually advises

clients not to include third party claims in the aggregate

fund as the quantum on these claims is usually quite large

and can rapidly deplete the fund.

The stop loss limit is determined by how much risk the cli-

ent is able to take on in terms of a financial quantum, and at

what point they would want to transfer that risk to the insurer.

The aggregate fund still forms part of the contract with the

insurer and in this regard claims to the fund get treated like

any other and would still get assessed and documented by

the insurer. In this regard the guidance and advice is invalu-

able in managing, processing and documenting all claims

whether through the fund or insurer.

The key benefit of an aggregate fund for client is the abil-

ity to manage their claims better so that should they have

money left in their aggregate fund, they can put this towards

their insurance premiums for the following year. It’s an ideal

solution for fleets from around 30 vehicles and where there

is a mature risk assessment strategy in place.

Premium deposit burnerA premium deposit burner is typically put in place where a

client’s claims trend shows a consistently ‘lower-than-pre-

mium paid’ trend. For example, if a client’s annual premium

is R100 000, and claims typically over a period of say three

years are only 60% of that premium, they can then arrange

to pay a premium deposit of R70 000 (70%) and retain the

balance in a self-fund. If claims paid in a 12-month period

are less than 65% of the deposit amount (ie R45 500), then

the insurer would not call for the balance of the premium

of R30 000. Obviously if the claims exceed this, then the

client would need to pay the balance of the premium of

R30 000 to the insurer. A premium deposit burner can be

put in place on a stand-alone basis or in conjunction with

the aggregate fund.

Concludes Du Sart, “Providing clients with a choice of

product tailored to their business objectives is the ultimate

outcome of the needs analysis undertaken by the broker

for the client, ensuring that cover is tailor-made and cost

effective without exposing them to undue risk. For any fleet

owner, there are significant financial benefits to be derived

from having a mature risk management and retention strat-

egy in place that is premised on actuarial and scientific

analysis of their risk and claims profile.”

Having such a mature risk management approach in place provides invaluable actuarial and statistical information in terms of risk patterns and trends


SUPPLY CHAIN LOGISTICS

Disruptions are events that interrupt the fl ow of products and Disruptions are events that interrupt the fl ow of products and

information between raw materials, production and the end information between raw materials, production and the end

user. Often, the prescription to minimise the impact of such user. Often, the prescription to minimise the impact of such

disruptions is to develop more resilient supply chains. disruptions is to develop more resilient supply chains.

Dr Steven Melnyk outlines his concept to Dr Steven Melnyk outlines his concept to Simon FouldsSimon Foulds..

RESILIENCE REQUIRES two critical

capacities: the capacity for resistance

and the capacity for recovery. The first

defines the supply chain’s ability to

delay a disruption and reduce the impact once the disrup-

tion occurs. The second defines the supply chain’s ability to

recover from a disruption.

The challenge of defining resilienceThe concept of resilience, central to much of the current

thinking about supply chain risk management, traces its roots

back to the work of ecologist Crawford Stanley Holling in

1973. Since then, the notion of resilience has been studied

within the fields of ecology, psychology, systems thinking,

disaster management and – more recently – supply chain

management. For some, resilience is a reactive capability

that occurs after a disruption or shock has taken place; others

see resilience as more proactive efforts toward preparing for a

disruption. It is not surprising that there is confusion surround-

ing this key concept.

Supply chain resilience definedSupply chain resilience is ‘the ability of a supply chain to both

resist disruptions and recover operational capability after dis-

ruptions occur.’ The dual capacities of resilience, resistance

and recovery, are complimentary. Resistance capacity is the

ability of the system to minimise the impact of a disruption

through avoidance or by containment, that is, minimising

the time between disruption onset and the start of recovery.

Recovery capacity is the ability of the system to return to

functionality once a disruption has occurred.

The process of system recovery is characterised

by a (hopefully brief) stabilisation phase after

which a return to a steady state of performance

can be pursued. The final achieved steady-state

performance may or may not reacquire original

performance levels, and is dependent on many

disruption and competitor factors.

While possessing a high capacity for both resistance and

recovery is preferable, it is more likely that firms have a mix

of these qualities. Given resource constraints and competitive

factors, there may be need for firms to choose where best to

invest their limited resources.

Supply chains exhibiting low capacities for resistance and

recovery would experience nearly every disruption while also

having slow and weak recoveries. These supply chains are

‘fragile’. The long term prognosis for such supply chains is

very poor since they likely will not last nor grow, unless pro-

tected by unique market or regulatory conditions.

In contrast to fragile supply chains, those that exhibit high

levels of resistance are able to alleviate potential risks more

easily. When they also possess the capacity for effective

recovery, they quickly rebound unavoidable events. Such

supply chains are classified as ‘hardy’. Between these two

extreme states exist two positions. Supply chains that are

characterised by an ability to adequately minimise disrup-

tions, but insufficient ability to quickly recover, are ‘resistant

but sluggish’. These supply chains exhibit high levels of

resistance, but if the system is ultimately disrupted, the supply

chain impacts are negative. ‘Sluggish’ here refers to an insuf-

ficient capability to restore operation.

While the ‘fragile’ position is clearly less desirable to the

coveted ‘hardy’ position, the existence of the two mean posi-

tions requires acknowledgement that firms may reside there

for several reasons: there may be limited resources with

which to invest in both capabilities or there may be limited

control over the environment in which a supply chain oper-

ates. The different manifestations of this lack of control in a

supply chain require firms to consider

the notions of supply chain resilience,

risk and uncertainty.

Risk and uncertaintyThe distinctions between supply chain

resilience, risk and uncertainty are often

blurred and unclear. Unfortunately this

Understanding supply chain capabilities

The four The four stages of resilience are: avoidance, containment, stabilisation and return.


SUPPLY CHAIN LOGISTICS

issue is exacerbated by the fact that some use risk and uncer-

tainty interchangeably, implying that these two concepts are

the same. This is not the case; while linked, they are separate

and distinct concepts.

Risk exists, so firms have to deal with the possibilities

of encountering situations that can adversely affect them.

However, not all future events are equally unknown. Past

experience offers some insight regarding what events could

occur, probability of occurrence, and possible impact.

Firms can predict the likelihood of events over a

set time period to help them determine how to

potentially react to these events. Events with a

greater likelihood and significant potential

impact require greater preparation.

In contrast, uncertainty considers

unpredictable events. These are events

that have not been previously encoun-

tered. To understand the differences, con-

sider the Fukushima Daiichi nuclear plant

following the Tohoku earthquake and tsunami. This disaster

was the largest nuclear disaster since Chernobyl in 1986. It

caused the evacuation of 100 000 people from their homes

and reduced the capacity to produce electricity by some 40%,

as 11 of Japan’s 50 nuclear reactors were closed immediately

following the earthquake. The disaster and the events that

followed had a significant impact on supply chains as key

air and sea ports shut down. Among others, this affected the

global supply of semiconductor equipment and materials for

consumer electronics, as well as Boeing’s 787 Dreamliner

parts sourced in Japan for the wings, landing gear, and other

major parts.

Yet, in studying the events that took place at Fukushima, one

can see the interplay of risk and uncertainty. When the plant

was first built in the 1960s, the expected maximum height of

a tsunami was 5 m. The resulting seawall built to resist this

potential risk event at the plant was 5.7 m. The tsunami that

hit the plant was 13 to 15 meters high. This event reflects that

uncertainty is always present. While plans were made to resist

a tsunami wave, the planners did not foresee such a large

tsunami hitting the plant.

You could argue that what Fukushima Daiichi needed was

a system that was ideally hardy but at a minimum, vulner-

able but responsive. However, what they had was a system

that was resistant but sluggish. The notion of a resistant but

sluggish supply chain and a vulnerable but responsive supply

chain also may be considered in this context of supply chain

risk and supply chain uncertainty.

Under conditions of uncertainty, the best approach to build-

ing resilience may be to invest in recovery capacity. However,

faced with the known risk of a chemical spill, for example,

the chemical industry’s policy of avoiding such disruptions is

more appropriate.

By differentiating between risk and uncertainty, we can

uncover an important rule of thumb for resilience – when

faced primarily by risk, it makes sense to invest in improving

resistance. When dealing with uncertainty, it is more appropri-

ate to invest in improving recovery capabilities.

Investing in supply chain resilienceResilience is a derived system property: the result of the

investments a firm makes over time, not a ‘free’ benefit of

existence. Firms can create resilience through many different

types of investments. Some of these investments, such as

buffers, are direct investments.

Indirect investments also have an impact on resilience.

Although such investments are not focused directly on

enhancing system resilience, they offer capabilities that the

firm can draw on to deal with unexpected disruptions.

Supply chain resilience can be generated in many different

ways. Furthermore, these investments can be mapped to spe-

cific stages within the four phases of resilience. The challenge

for the firm is determining the choices between concern for

supply chain risk or uncertainty and determining which quad-

rant is both most appropriate and representative of the best

value for the firm’s investments. Many of these investments

affect multiple stages of resilience.

Note that these investment values are qualitative approxima-

tions of value; other values may be realized in various types of

supply chain situations.

ConclusionIn today’s increasingly dynamic and turbulent world where the

supply chain plays an increasingly important role, organiza-

tions have to be prepared to deal with supply chain risk and

supply chain disruptions. One approach is developing supply

chain systems that are resilient. However, this notion of resil-

ience, which is at the heart of so much of our current thinking,

is often not well enough defined and subject to a great deal

of confusion.

Companies can make investments in resilience through

multiple venues. Consequently, you can now build the type

of resilience that is both appropriate and makes sense to the

parties involved. Resilience is now becoming a supply chain

property that you can shape and influence; it is no longer a

happy accident.

e use risk and uncer-

se two concepts are

ed, they are separate

with the possibilities

versely affect them.

ually unknown. Past

g what events could

possible impact.

ents over a

e how to

with a

al

s

n-

n-

ant

unami. This disaster

Risk exists, so fi rms have to deal with the possibilities of encountering situations that can adversely affect them

we think transport

Costs safely under control.The new BPW ECO Disc trailer disc brake.


WAREHOUSING

Do warehouses add real value to Do warehouses add real value to

the supply chain? Surely, if we get the supply chain? Surely, if we get

our act together, we can organise our act together, we can organise

supply direct from source to the supply direct from source to the

customer and eliminate en-route customer and eliminate en-route

storage. If we can organise a really storage. If we can organise a really

lean supply chain, we could reduce lean supply chain, we could reduce

the role of the warehouse – and the role of the warehouse – and

reduce costs accordingly. reduce costs accordingly. By Martin Bailey, chairman, Industrial

Logistic Systems

Fat and lazy supply chains

CERTAINLY, IF YOU believe the gurus –

driven by a missionary zeal – who have

‘discovered’ that lean supply chains are the

way of the future, the strategic role of the

warehouse is severely diminished. The idea is that your

supply chain must be lean and agile, without an ounce of

fat. Do things just in time. Do it fast and react perfectly to

customer demand. If you adopt their version of the Toyota

Production System, you will quickly create the ultimate

supply chain.

Thus when your supply chain resembles a bulimic model

in a size-10 dress – preferably with ADHD – you are well on

your way to ensuring your systems are optimised and you

will be running a perfectly efficient network that has zero

fat. However, there are real enemies of our lean systems.

Enter the infamous buyer. He sprouts philosophies such as

“The idea is that your supply chain must be lean and agile, without an ounce of fat. Do things just in time. Do it fast and react perfectly to customer demand.” Martin Bailey, chairman, Industrial Logistic Systems

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Colette Wessels, Imperial Logistics Training and Development – Reducing the logistics skills gap P10

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volume discounts, stock cover, safety stock, opportunity

buys and such horrible concepts, which lead to bloated

stocks. We thus may end up with an obese supply chain

filled with stock – with its arteries clogged and high blood

pressure, it is ready to collapse.

Added to this, we have the unreliable supplier who can-

not supply on time. His lead times are unpredictable and

you need extensive stock cover to buffer his inefficiencies.

The other driving force over the last 30 years in the indus-

try has been an imperative to centralise. Bigger is better,

and with the world’s population moving to the cities, our

supply chains have centralised themselves to a few hubs,

where we can drive down inventories, increase control and

reduce overheads.

In theory, our size-10 model thus now lives with lots of

other models in a modern apartment in the centre of the

city, where she can eat sushi and sip her imported mineral

water, knowing that all is well and life is good.

What about some strategic reality? In the past, as fuel

and electricity prices increased, inflation matched these

increases, and our cost inputs (in percentage terms)

remained reasonably constant. Things are changing. With

the decline in the rand and problems at Eskom, energy

costs are now rising at a far higher rate than inflation.

Transport is a continually growing portion of the supply

chain – and is likely to become a lot more expensive.

This is coupled to a general goods-railway network in

South Africa that is largely collapsed and unlikely to be

resuscitated in the foreseeable future, increased toll roads

as a way for government to pay its way, labour escalation

above inflation, and a drop-off in labour productivity – our

prime drivers in the supply chain are rapidly changing.

We are thus going to have to think about our rapid

response philosophies. Perhaps just-in-time deliveries

of small quantities and make-to-order (as dictated by

demand) will need to be adjusted, and ensure trucks are

full and our transport costs are optimised. Our constraints

in the supply chain are changing and we have to adapt

accordingly. Warehouses are going to continue to grow

‘fatter’ to meet the supply chain constraints, and our strat-

egies are going to have to adapt.

Nobody is proposing that we will ever need a really fat

supply chain, but perhaps we are going to have to temper

our philosophies. That size-10 model may have to become

a well-built size 12, as we adjust our thinking. That cross-

dock facility in Bloemfontein with no stock may have to

hold a few days’ stock so we can reduce our transport

costs. Those goods we send overnight, because we

believe that’s what our customer wants, may now have an

extra 24 hours’ lead time. Those goods beautifully pack-

aged may no longer be in the perfect box, and customers

may have to adjust their expectations. Our way of doing

business is thus going to have to adjust to a world of

dwindling energy resources.

Certainly, the thinking that drives our supply chains is

going to change and the gurus that shape our thinking are

going to need a whole new set of rules. I guess well-built

supply chains will never be as attractive as lean supply

chains. Right-speed systems are never going to sound

as good as agile systems. And, with apologies to the

Cheetahs, who in his right mind wants to decentralise

to Bloemfontein?

Many will argue that lean is not simply a process – it is

a whole business philosophy. A lean approach is a great

business philosophy for our supply chains, but we need to

temper it with our resource constraints.

What we do need to ensure is that we keep enough

flexibility in our networks to guarantee that, as the inputs

change, we can adapt – to a changing world where scarce

resources may dominate our thinking, rather than a pure

focus on being lean and agile.

So we will continue to build fat warehouses, and these

will balance our supply chains, ensuring high-quality cus-

tomer service. Happily, that will ensure the supply chain

stays balanced and the warehousing industry continues

to grow.

WAREHOUSING

Large and well-stocked warehouses are still important to ensure transport costs are kept to a minimum

the pulse of africa’s supply chains

Conference Date31 May - 2 June 2015

Sun City

Register at www.sapics.org.za

+27 (0) 11 023 6701

Discover end-to-end supply chain solutions

at the 37th Annual SAPICS Conference

The leading event in Africa for Supply Chain Professionals

Partner Associations:


CORRIDORS

Simon FouldsSimon Foulds speaks to Andrew Layman, CEO at the Durban Chamber of Commerce, speaks to Andrew Layman, CEO at the Durban Chamber of Commerce,

and Ravi Ronny, design and construction manager (Eastern region) at Sanral, asking them and Ravi Ronny, design and construction manager (Eastern region) at Sanral, asking them

about the growth of KwaZulu-Natal as an industrial hub, and how the road infrastructure about the growth of KwaZulu-Natal as an industrial hub, and how the road infrastructure

will assist in growing the economy.will assist in growing the economy.

KWAZULU-NATAL’S emergence as a hub

of industrial develop-

ment in sub-Saharan

Africa may be attributed to its

unmatched natural resource

endowments, exceptional pro-

ductive capacity, well-developed

first-world infrastructure and

advantageous coastal location.

Economic activity is concen-

trated in the metropolitan areas

of Durban, Pietermaritzburg and

Richards Bay.

Two of Africa’s sea ports are

found in KwaZulu-Natal, and

the world-class King Shaka

International Airport and the

Dube TradePort, now a Special

Economic Zone (SEZ), provide a

key competitive advantage and

ensure the province’s impor-

tance for economic growth,

effectively repositioning the

country to increase its share of

the global market.

TWA, in this special feature,

looks at the significance of the

province and how it continues to

establish itself as an

economic hub counter-

acting the expansion

taking place at Port

Maputo, ensuring the

Port of Durban remains

the port of choice

for freight heading

towards Gauteng.

SA’s burgeoning industrial hub

The KwaZulu-Natal provincial

government has established the

Provincial Planning Commission

in line with the National

Planning Commission.

Through this, they have estab-

lished the Provincial Growth

and Development Plan (2011 to

2030), through which key strate-

gic objectives are to be achieved

over the next 20 years. The

strategy is to select economic

and development strategies to

enhance benefits into Africa and

the global economy. KwaZulu-

Natal relies on trade and

industry and is a major manu-

facturing hub intent on exporting

into Africa.

The province’s leading sec-

tors in the local economy are

automotive, aluminium smelting

and sugar manufacturing, which

are already integrated into the

global economy.

Industrial Development Zones

(IDZ), such as the recently

launched Dube TradePort IDZ

(DTP IDZ), will make significant

contributions to the economic

success of KwaZulu-Natal

in particular and developing

nations in general.

The DTP IDZ has been

established as a key priority

Infrastructural Development

Project for the province of

KwaZulu-Natal and will be

16%16%KwaZulu-Natal is the second largest economy in the country, contributing around 16% towards South Africa’s GDP. An aerial view of the Durban N3

KZN

CORRIDORS


responsible for the development

of an integrated aerotropolis

strategy. The strategic position-

ing of Dube TradePort next to

an international airport will open

doors to endless opportunities

for the freight-oriented aerotrop-

olis to become the gateway for

commercial business to South

Africa, Africa and the world

at large.

How is KwaZulu-Natal establishing itself as an economic hub within South Africa? AL The

value of the ports has been

highlighted more aggressively

in recent years and one is

conscious of a much greater

recognition of the potential

of a maritime industry. The

announcement about the

investment in the dig-out port

has had a lot to do with people

being more aware of this. The

MEC in charge of economic

development is a very focused

man who drives things forward,

and Trade and Investment

KwaZulu-Natal is also very

active. Dube TradePort has

also increased its profile and

its activity. It is an important

economic development hub

in the province. In addition,

the province has a growth and

development plan and strategy

with substantial buy-in from

business. I think the logistical

importance of Durban means

that the province can’t help but

be an economic hub.

RR The N3 is South Africa’s

principal freight and logistics

corridor. Hence, plans are

underway for government’s

second Strategic Infrastructure

Project (SIP 2), also known

as the Durban-Free State-

Johannesburg Logistics and

Industrial Corridor, linking the

Port of Durban with Gauteng,

South Africa’s economic

heartland. In terms of project

size and value, it is the biggest

of government’s SIP projects.

Durban is by far South Africa’s

busiest port with over 80% of

goods moving along this corri-

dor by road. In excess of 80 mil-

lion tonnes of freight per annum

are carried on the N3 corridor,

with approximately 9 000 heavy

vehicles using the national road

per day. Therefore, ensuring the

seamless flow of freight is very

important to this corridor and

ultimately the economy.

Which SIPs are in the pipeline to grow the economy and how will The Durban N3 highway


CORRIDORS

these affect the movement of goods through the province? Where is the funding coming from for these SIPs? AL There

are 18 SIPs. The Durban-Free

State-Gauteng Freight and

Development Corridor SIP

is the most important one to

KwaZulu-Natal. SIP 7 will benefit

Durban, and the city has already

embarked on what it calls

Go!Durban, a new integrated

rapid public transport system,

and SIP 3 involves KwaZulu-

Natal in the link with the Eastern

Cape. Obviously the province

will also benefit from the SIPs

that are ‘national’ in conception.

The planned dig-out port is not

one of the SIPs, but has to be

considered a major catalytic

infrastructure project. The

dedicated freight route is still

under investigation and it is not

clear whether this will involve

a separate, new highway for

the exclusive use of trucks, or

whether it will be an additional,

dedicated lane on the N3.

Government does not have the

funds for this, or even some of

the other SIPs, at present, and

private sector investment will

have to be solicited.

RR The KwaZulu-Natal

Department of Transport (DoT)

coordinates SIPs 1, 2, 3 and 7

for the province, which affect

the movement of goods through

the province. SIP 2 has a major

influence on the movement of

goods within the Durban-Free

State-Gauteng Corridor and is

the busiest freight route in the

country, as the Port of Durban is

the busiest in Africa.

Funding is a major chal-

lenge. For example, on the

SIP 2 programme, the majority

of the projects are unfunded

and sources of funding still

need investigation.

How far is the 20-year plan comprising upgrades to road and rail systems, the construction of truck stops, weighbridges and the introduction of

computer systems linking the port with the truck stops? How will this improve the efficiency of the Port of Durban, while at the same time catering for heavier traffic volumes expected once the proposed dig-out port and Cato Ridge dry port are in operation? ALAlmost all these developments

are planned for the future.

There is still debate about a

dry port at Cato Ridge, road

traffic management is not nearly

as sophisticated as it should

be considering the available

technology, congestion is

rife, port efficiencies need

improvement, the Navis

system continues to give

trouble from time to time and

is not fully embraced by the

logistics sector.

Economic times are hard,

which makes roll-out much more

difficult. I don’t think this is going

to improve markedly in the short

term. However, commitments

to a plan have been made,

and that is better than no plan.

Political will requires strengthen-

ing, the private sector needs

to be brought more actively on

board – and must include better

consultation – and everything

must be focused towards eco-

nomic growth. Then these things

will happen quicker. We are too

easily distracted in South Africa.

RR In terms of Sanral’s plan-

ning, the N2 and N3 corridors

will be developed to handle

all road-based freight traffic

from within the existing and

future dig-out port, and other

areas within and outside the

province. This planning is being

done jointly with Transnet as

part of the SIP 2 project, and

is looking at a 30-year horizon,

at least. In addition, exist-

ing weighbridges are being

upgraded and additional ones

are being investigated.

The Cato Ridge dry port is still

under discussion and as indicat-

ed previously, the KwaZulu-Natal

DoT has commissioned a study

for hubs within the province.

How will the establishing of the Dube TradePort as an SEZ benefit the province as well as the transport and logistics industry? AL This all

hinges on the attractiveness

of the incentives which, to

my knowledge, have not

been completely finalised yet.

Samsung’s investment there is

important because it will draw

more investment, perhaps

in a cluster. In some ways,

the attraction of clustering

is even more of a draw card

than incentives.

RR Dube TradePort will attract

local and foreign investment.

This will help fast-track Dube

TradePort’s development and

growth, thus boosting the econ-

omy of KwaZulu-Natal and creat-

ing jobs. Out of this will emanate

freight that needs to be taken

care of on the various corridors

– the critical ones being the N2

and N3.

KwaZulu-Natal relies on trade and industry and is a major manufacturing hub intent on exporting into Africa

Right City Deep container depot in Johannesburg

Below The N3 outside Pietermaritzburg


PORTS

As the busiest port in South Africa, Durban is the second largest container port in Africa. As the busiest port in South Africa, Durban is the second largest container port in Africa.

Simon FouldsSimon Foulds looks at the current state of the port. looks at the current state of the port.

Port of Durban

What makes the Port of Durban an asset to the country? The Port of Durban

ranks second in Africa and fifth

in the Southern Hemisphere in

terms of container throughput.

61% of all container imports

and exports in South Africa pass

through the Port of Durban.

It is strategically placed as the

closest South African port to

Gauteng, making it the primary

gateway to the South Africa’s

economic hub. It is also a gate-

way to the Southern African

region and Africa for imports

and exports.

The Port of Durban is the lead-

ing multi-cargo port in the SADC

region and the premiere trade

gateway between South-South

trade, Far East trade, Europe and

USA, and East and West Africa

regional trade.

The Port of Durban occupies

a focal point in the transport

and logistics chain, with 60%

of all South African imports and

exports passing through the

Port of Durban. Thus, the port

assumes a leading role in facili-

tating economic growth in South

Africa. Main trading partners in

terms of volume are China, the

EU, the Asian bloc, the Americas

and the Middle East, which is

driven by oil.

What are the operating hours of the port? The ports

operates 24/7, 365 days a year.

What are the ship sizes the port is able to accommodate? The Port

of Durban has a promulgated

draft of 12.2 m. The entrance

channel and harbour mouth have

been deepened and widened

to accommodate ships of up to

14 m, however not all the berths

are able to accommodate ships

of this draft. These bigger ships

are managed under special

tidal conditions.

302 km 302 km of rail tracks in the port

58 58 berths operated by 20 terminal operators

The Durban harbour

How many and what type of cranes operate at the port? As part of the Transnet

Port Terminals expansion

programme, Durban Container

Terminal: Pier 2 acquired seven

new tandem-lift, ship-to-shore

cranes and 13 new twin-lift

Terex Noell straddle carriers to

complement the new cranes and

boost the straddle carrier fleet

to 41.

The new cranes simultaneously

handle two 12 m containers or

four 6 m containers, and can lift

up to a maximum of 80 tonnes,

while accommodating new-gen-

eration vessels with 24 containers

stowed across the deck.


PORTS

This improved capability is

expected to see a rise in gross

crane moves an hour (GCH),

from 26 GCH in 2013 to 33 GCH

by 2015 – a 27% improvement

in productivity.

DCT: Pier 2 also launched a

world-class rail dual-cycle opera-

tion on the container-planning

system, Navis. This method

allows terminal trucks, straddle

carriers and rail-mounted gan-

tries to run loaded at all times.

Pilot studies indicated a 50%

reduction in turnaround time and

improved rail GCH.

In March 2014, the first

live production run was

successfully completed.

What volumes move through the port annually on both the container and break bulk terminals?

In 2013:

• containers: 2 632 151 TEUs

• break bulk: 3 399 278 handled.

How many ships visit the port per annum? Over 4 000

commercial vessels visit annually.

What is the tonnage moving through the port? Around 86 million tonnes of cargo

in 2013, with all cargo converted

to tonnes.

How many ships can be accommodated at any given time? There are 58

berths, and 40 commercial

vessels can be berthed at any

given time.

What have been the latest infrastructure developments at the port? The latest development is the

new sand hopper, which is to be

commissioned in January 2015.

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

2013/14, Transnet National Ports

Authority completed much-

needed scour protection of the

Pier 2 berths.

The authority is currently in an

EIA process related to the pro-

posed lengthening and deepen-

ing of the North Quay berths 203

to 205.

The project is still to go to ten-

der. Planning (proposed 2018

to 2022) includes the Phase 2

expansion of Pier 1, known as

the Salisbury Island infill. This

will increase container capacity

from 700 000 TEUs to around

2.5 million TEUs. The develop-

ment of the Durban Dig-Out Port

(DDOP), which has unfortunately

been delayed, is very much part

of the port’s long-term plans.

The multi-cargo Maydon Wharf

Berths 1 to 4 and 13 and 14 are

undergoing major reconstruction,

which is scheduled to be com-

plete in 2016.

The reconstruction of Island

View Berth 2 is complete, Berth 5

is being completed while Island

View Berth 1 will be the next to

undergo reconstruction.

Island View Berth 10’s exten-

sion of its bunker barge berth to

cater for more than one barge at

a time, and to provide an addi-

tional bunker barge facility to

cater for growth in bunker barge

operations, has been completed.

Why does Transnet want to expand the Port of Durban? Anticipated future

cargo volumes indicated that

the existing Port of Durban will

run out of capacity despite the

plans for its expansion. The

DDOP is an answer to a wider,

holistic and complementary

plan of investment and

infrastructural development.

The global shipping industry

has seen the advent of a new

generation of shipping ves-

sels that are longer, wider and

deeper. These ships will require

a modern, deep-water port and

other facilities.

When completed, the port may

consist of:

• a 16-berth container ter-

minal to handle around

9.5 million TEUs

• an automotive terminal

• a liquid bulk handling facility

• construction of road, rail and

other basic port infrastructure.

It is envisaged that it will take

about 30 years to develop the

21 km 21 km distance around the port

4 0004 000commercial vessels visit the port each year

Above Durban Container Terminal

Right The port’s gantry crane operations are hard at work 365 days a year

PORTS


port to its fullest, but a time

frame for the DDOP is not avail-

able at present we are still final-

ising the pre-feasibility phase.

What plans are there to improve the feeder systems in and out of the port? The DDOP and a

Durban-Gauteng rail corridor

are being developed. A road

study is being undertaken jointly

between Transnet National Ports

Authority and the eThekwini

Metropolitan Municipality to

determine how feeder roads can

be improved.

60%60%generated SA revenue

2nd 2nd largest container port in Africa


South Africa is among the top 10 deciduous fruit exporters in the world and the South Africa is among the top 10 deciduous fruit exporters in the world and the

Cape Town Container Terminal gears up for the peak season every year to ensure Cape Town Container Terminal gears up for the peak season every year to ensure

effi cient service.effi cient service.

The reefer peak seasonPORTS

SIMON FOULDS

speaks to Cape Town

Terminal’s terminal

manager, Brenda

Magqwaka to find out how the

terminal geared up for this year’s

Reefer peak season.

How much deciduous fruit moves through the Cape Town Container Terminals during the peak season? This differ each year. There

were 387 551 TEUs containing

fruit for the 2013/14 peak

season (October 2013 to March

2014). This was an 8% growth

compared to the 2012/13 peak

season (October 2012 to March

2013), there were 359 730 TEUs

in the 2012/12 TEUs containing

fruit in the 2012/13 financial

year. These TEUs all contained

deciduous fruit such as pears,

grapes, apricots, nectarines,

plums, peaches and apples.

How does Cape Town Container Terminals gear up for the peak season? For this peak season

specifically, CTCT has beefed

up its operations in preparation

for the reefer peak season.

The terminal’s straddle carrier

fleet will increase from eight

to twelve in order to ensure

uninterrupted operations on the

landslide during the wind-bound

conditions. Reefers will be kitted

with five straddle carriers while

seven will be used to service

general purpose containers.

How much planning goes into ensuring you are able to accommodate demand timeously? A

lot of thought goes into the

planning. Integrated planning,

communication and coordination

underpin all of TPT’s efforts in

this regard; hence the National

Planning Centre exists in order

to monitor reefer vessels for

improved turnaround time.

When do you start planning for the peak season? Planning for the

reefer peak season takes place

twice a year, at the end of the

season we normally look at how

we have performed, and what

lessons we learnt post season.

During September each year we

gather our intelligence for the

coming season.

As you state in your release, you have to gear

up differently how does each season differ from the other – in what way – please elaborate? Each

season comes with its own

challenges. For each season,

all TPT efforts employed are

aimed at reducing delays and

to make sure that vessel turn-

around in good time as the fruits

they move are either fresh for

consumption, canning or the

production for dried fruit. This

season, two recently acquired

ship-to-shore cranes will facilitate

the deployment of seven gangs

on the waterside operation,

to complement TPT’s reefer

season plan.

How many ships do you load during the reefer season and what is the

turnaround time for each vessel? We handle three

reefer vessels per week at an

average vessel turnaround time

of 24 hours.

What are the main challenges for the Cape Town Container Terminals at this time and how do you ensure these challenges do not affect the through flow of goods and ships? One

such challenge is strong winds.

As such, reach stacks will be

deployed in rubber-tyred gantry

crane stacks during wind-

bound conditions.

Brenda Maggwaka, terminal manager at the Cape Town Container Terminal


TRAINING

The human investment

EVEN AT OPERATIONAL level where candidates

need either a matric qualification, a diploma or a

certificate, companies experienced a 27% short-

age in 2013. In South Africa today, the skills short-

age is the fourth highest supply chain constraint.

This is according to the CSIR’s 10th Annual State of

Logistics Survey for South Africa (2013), which reports that

the lack of skilled personnel at all levels continues to be a

major concern to the performance of supply chain manage-

ment. It is a challenge that affects virtually every one of South

Africa’s key economic drivers. Industries such as mining,

manufacturing, retail and farming, for example, would be

incapacitated without these skills and services.

Every year investment in road, rail, port and airport infra-

structure continues to be a high priority with billions of rands

invested in various projects in these areas. In 2013, logistics

costs were estimated at R423 billion and, as a percentage of

transportable GDP, have grown significantly over the last four

years, primarily due to fuel increases. Developing efficiencies

within end-to-end supply chain integration is now critical for

strong financial performance and mitigating the effect of vola-

tile fuel costs. Thus, strategically, investment in logistics and

supply chain management skills would be a vital contributor

to a profitable bottom line.

In such a rapidly developing and changing industry,

skilled practitioners need not only the required hard skills

(traditionally taught academically) and soft skills, but also

the work experience, especially if they want to progress in

the industry and use the benefits of such change to their

organisation’s advantage. Soft skills are of such importance

to the industry that in surveys conducted by the University

of Johannesburg, it was found that practitioners place

softer skills, particularly customer-focused management, well

ahead of the required hard skills. Students, however, prioritise

such skills much further down their lists. This discrepancy

could be accounted for by the lack of real-world experience

in the industry on the student’s part; it does, however, cre-

ate a gap between the needs of employers and the skills

pool available.

Such a gap results in many candidates, despite having

degrees, not being fully qualified for a position, particularly

as they look to move into more tactical and strategic roles

of supply chain management. It is at this juncture that the

industry runs the risk of losing skilled candidates to other

courses and even careers.

While many industry practitioners do recognise the need for

more skills and believe further qualifications like a National

Diploma or Bachelor of Business Administration degree

could help them, very few are able to take these traditional

routes through academia due to the financial constraints and

those of their working environment. For instance, attending

regularly scheduled classes can be difficult for a practitioner

with the type of work schedule common in the logistics indus-

try. The traditional distance-learning alternative is also not

viable, as this often does not offer suitable support.

It is this gap that needs to be filled by more responsive

professional certifications, graduate training programmes

and vocational associations. While APICS’ Operations

Management Body of Knowledge

Framework found that the quality of

tertiary degrees in the field were on

par with other BRICS countries and

adequately taught the hard skills, pro-

fessional certifications and membership

of professional associations lagged

behind and it is through these institu-

tions that a better understanding of the

soft skills could be developed.

Indeed, empirical evidence is showing

that partnering with education providers

is a highly effective route for companies

seeking to build their skills capacity and

improve their overall performance.

Skills shortages continue to bedevil the logistics and supply chain Skills shortages continue to bedevil the logistics and supply chain

industry, with practitioners reporting shortages of up to 64% in industry, with practitioners reporting shortages of up to 64% in

positions that require a bachelor’s degree. positions that require a bachelor’s degree. By Dr Mario Landman, head of the Institute of Logistics and Supply Chain Management


ALCOHOL

Behavioural implications

ALCOHOL LOWERS inhibitions, fuels aggres-

sion and affects judgement, and in hazardous

environments such as mining, manufacturing and

construction – where employees need to operate

machinery that requires sound judgement – alcohol use is a

serious area of concern. Importantly, the ongoing behavioural

impact of alcohol use in the workplace can have a negative

knock-on effect to health and safety, increasing risk for organi-

sations and their employees alike.

Alcohol affects judgmentEmployees operating with impaired judgement as a result

of alcohol consumption disregard policies put into place for

their safety. In the activator-behaviour-consequence model

of behaviour, alcohol acts as an activator for undesirable

behaviours. They may fail to accurately assess a situation,

underestimate the danger involved, and subsequently act in a

manner that puts themselves and their fellow workers at risk.

Creating negative feedback loopsThe consequences can also negatively impact the behaviour

of the offender’s colleagues. If nothing negative occurs, the

perpetrator may feel that they can continue with such behav-

iour. Colleagues may also see this and emulate the unde-

sirable behaviour, which further increases the employees’

risk, not to mention the company’s. If someone is injured or

even killed, the organisation is liable for damages as well as

breaching the OHSA, impacting the morale of workers.

For example, an employee who is qualified to lift a certain

load with a forklift may feel, under the influence, that they are

able to exceed the load limit. Alcohol can create a feeling of

bravado. This may cause them to injure themselves or dam-

age equipment. If there is no consequence, it imparts the

impression that this type of behaviour is acceptable. A vicious

cycle is then created with employees ignoring processes and

regulations put into place to ensure their safety.

Damaging the bottom lineUndesirable behaviours can also potentially impact the com-

pany’s bottom line in a negative fashion. Loss of time and

Organisations are required by law to comply with the Occupational Organisations are required by law to comply with the Occupational

Health and Safety Act (OHSA), which specifi es a zero tolerance Health and Safety Act (OHSA), which specifi es a zero tolerance

approach to intoxication in the workplace. Employees under the infl uence approach to intoxication in the workplace. Employees under the infl uence

of alcohol are a danger to themselves and their co-workers. of alcohol are a danger to themselves and their co-workers. By Rhys Evans, director, ALCO-Safe

an overall loss of productivity in the long run can affect a

company’s profits and their production abilities. Addressing

this challenge will help to ensure that businesses operate

effectively and with maximum productivity, which will therefore

ensure maximised profitability.

A multifaceted approach is neededAlcohol consumption in the workplace remains a challenge

for a number of reasons. Overcoming this challenge requires

a combined approach of the right policies, education and

equipment to curb alcohol use and abuse in the working

environment. Alcohol abuse policies are a crucial first step.

These must clearly define and outline an organisation’s zero-

tolerance approach to alcohol consumption, as well as all of

the procedures involved. Policies should define the param-

eters the company and employees must adhere to in order to

ensure compliance with OHSA standards.

It is also essential to drive awareness – of the policy, the

consequences of breaching it, and the effects of alcohol on

behaviour. The behavioural changes affected by the use of

alcohol are often not understood, and education can help

employees to understand the benefits of abstaining from, or

reducing, alcohol consumption.

Finally, policies and education should be backed by the use

of appropriate technology for testing alcohol consumption.

Without the ability to check employees,

the policies will be ineffective in

changing behaviours. The pos-

sibility of random testing can be a

significant deterring factor.

In conclusionChanging behaviours

requires a combination of

policies, education and

appropriate technol-

ogy to ensure that risk

can be minimised and

OHSA adherence bet-

ter assured.

employees,

ctive in

pos-

be a


AIR CARGO

BPW Axles 26

Breakbulk Africa Congress 4

Digicore OBC

Grindrod 15

Hyundai Automotive South Africa IFC

Inter Africa 32

MMI South Africa 36

SAPICS 30

Scania OFC, IBC

Shell SA 3

Index to advertisers

Air freight still flying high

ACCORDING TO the International Air Transport

Association (IATA), demand, measured in freight

tonne kilometres (FTK), rose 5.4% in October

2014 compared to October 2013. This out-

stripped capacity, which grew by 4.4%. Compared to

September 2013, demand grew by 0.7% – bringing freight

volumes to a new record monthly high.

The good results reflect the improvements in world trade

and business activity, which have been evident since

European summer 2014. World trade is growing

steadily, supporting increased air cargo ship-

ments. Regional differentiation in performance,

however, is very apparent.

Carriers in the Middle East, Africa and Asia-

Pacific saw demand grow faster than the global

trend, while North America, Europe and Latin

America grew more slowly. More significant-

ly, however, carriers in all regions except for

Europe improved on their year-to-date performance. Cargo

demand for European carriers grew by a weak 1.4%

compared to the previous October, reflecting economic

uncertainty and the impact of sanctions as a result of the

Russia-Ukraine crisis.

Tony Tyler, IATA’s director general and CEO, says, “We

are now back to levels of demand not seen since the 2010

post-recession bounce-back. But the industry is still in the

hot seat and under pressure to improve its value offering.

Customer expectations have evolved dramatically. Other

modes of cargo have improved their competitiveness.

Shippers expect the efficiency of electronic processes that

Global air freight market data for October 2014 shows the strong Global air freight market data for October 2014 shows the strong

performance of air cargo is continuing.performance of air cargo is continuing.

they experience in almost every other sector. And when ship-

ping specialty products – such as those requiring cold-chain

control – they expect end-to-end quality. The industry is

investing to build its future by meeting these expectations.”

Analysis in detail:

• African airlines reported strong growth of 9.6% year-on-

year. Regional trade volumes are still volatile, but the

improvement in key economies such as South Africa is

supporting this improvement. Capacity fell 2.4%

• Asia-Pacific carriers reported a 6.7% increase in FTKs,

boosted by the release of the iPhone 6, and solid increas-

es in trade and exports from emerging Asian economies.

Looking forward, the rate of growth in the Chinese econ-

omy continues to slow down, which may impact on air

cargo. Capacity grew 5.7%

• European airlines improved cargo volumes by 1.4%. The

Eurozone economy only just avoided recession in the third

quarter. Poor business confidence and the ongoing sanc-

tions against Russia will continue to weigh on European

cargo in the months ahead. Capacity expanded 4.4%

• North American carriers recorded an increase of 3.1% in

October. Growth was slower than the September figure of

5.4%, but the overall trend is showing an acceleration on

growth for the year to date (2.7%). Underlying indicators

are positive, which bodes well for increased cargo growth

in the future. Capacity contracted 1.2%

• Middle Eastern carriers once again recorded double-

digit increases, expanding 13.0%. Carriers in the region

have diversified, expanding their services in perishables

and linking growing markets in Asia and Africa. Capacity

expanded 15.8%

• Latin American airlines grew FTKs by 4.1% year-on-year.

This solid growth reverses the trend from September,

when volumes fell 0.7%. Stronger export growth across

Latin America is supporting better air cargo performance.

Capacity grew 2.3%.

“We are now back to levels of demand not seen since the 2010 post recession bounce-back.” Tony Tyler, director general and CEO, IATA

Always Visible

Introducing Ctrack On-the-Road with video and snapshot functionality, a complete in-vehicle system that features everything you need to ensure a more productive and efficient fleet. What’s more, On-the-Road also offers task management, advanced navigation, messaging, optimal routing, PIN enabled driver identification, voice communication and even driver behaviour feedback – keeping your drivers informed, on the move and always visible.

transport world africa jan/feb 2015

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