By Shane de Beer: Sales and marketing manager at TNT Express
An increasing number of manufacturers and other suppliers are shipping consolidated container loads of products from point of origin into SA. They then use a local logistics company to break the shipment down into individual orders and deliver them directly to customers. This speeds up delivery and removes the cost of warehousing as well as the cost of transporting the goods to a warehouse before delivering them to the customer, as happened in the past.
We are getting more and more requests for this as customers look at what elements they can remove from the supply chain to increase efficiencies and reduce costs. This is giving rise to super-sized warehouses being created around the globe and smaller ones disappearing, and the emergence of increasingly larger container ships as more and more products are being moved around the world.
One of the driving factors behind this trend is that companies are becoming more globally intelligent and are sourcing products in the smartest way possible.
For example, companies are sourcing more goods from the Far East as opposed to the US and Europe, because they are a lot cheaper and the additional cost of transport is nowhere near the difference in the margins.
Manufacturers that know their markets and understand their specific customers’ needs are even attaching price tags before shipping.
The overriding message here is that there is an increasing need for logistics companies to keep up with changing trends and understand their implications to enable them to be proactive to customer needs and the needs of their customers’ customers.
We need to be constantly looking at what value we are giving our customers compared to what value we could be providing them with and have the agility and flexibility to change our business models accordingly.
Customers want to be able to track the progress of their deliveries as they move through the supply chain. They also expect the logistics provider to have the technology in place to support automated processes, supply chain visibility, planning and forecasting, and smart routing capabilities. Customer expectations like this are having a marked impact on the market.
Five years ago we counted some 1500 different businesses operating within five kilometres of O.R Tambo airport in Johannesburg that had logistics related words included in their company name such as logistics, express, freight, courier, and so on, and many of these have disappeared.
The challenge for logistics companies is to not to just change their business models for the sake of it, which is difficult to judge when new trends are emerging at such a rapid rate. An example of a major potential market disruptor is 3D printing, which could radically change the way goods move around, because it promises to make it easy for anyone to produce components and finished products locally, cheaply and easily, instead of importing them.
In the future it may well be possible, for example, to produce a new carburettor for a motor bike by just plugging in one of these devices and printing it. On the other hand there are trends that have happened almost unnoticed over the past 20 years in SA that have impacted the movement of goods to an extent. These include the disappearance of thousands of corner cafes and the emergence of convenience stores on fuel station forecourts that open all hours. Another is large retail chains like the Pick ‘n Pay and Woolworths selling franchises, which has resulted in smaller versions of their stores springing up all over the country.
Logistics providers need to keep up with trends like these and anticipate their potential impact on the needs of their customers and the future direction of their businesses.
Comments are closed.