According to Stellenbosch University and the World Bank, the cost of South African logistics is estimated to be 11,8% of Gross Domestic Product. Total turnover for the logistics industry for enterprises only involved in mining, retail and manufacturing, was estimated to be R274 billion in 2018.
However, warehousing, road freight and even pipeline volumes, are often not categorised as logistics.
For example, when major retailers like Shoprite or Pick ‘n Pay transport and store goods, the transported volumes are listed under the retail category. Retailers like these see transportation as a cost centre and any savings they make would be categorised as retail savings. Similarly, when a steel manufacturer delivers steel, the value add of the transportation is measured under manufacturing.
Transport as a cost centre is therefore difficult to accurately measure and is significant in the road freight and storage sub-sectors.
This means the country’s entire logistics sector is far more extensive than the estimated R274 billion, and is probably far closer to R480 billion. Furthermore, some services such as docking fees or air traffic control, are part and parcel of transportation generally but are not measured in a logistics or supply chain index.
There is also overlap between sea freight and cargo handling and the same is true of air cargo. Sometimes cargo spends time at the country’s ports and is charged storage or handling fees.
Supply chains are integrated, too, and enterprises can be registered differently in terms of their primary business. For example, we include Transnet terminals as part of the sea freight sector, but one could argue that it is also part of the cargo handling and storage sub-sectors