Page 24 - Logistics News - August 2021

SUPPLY CHAIN NETWORKS

SA needs to diversify its

supply chain networks

By Lebo Letsoalo, Supply Chain Coach, MD of SINCPOINT

The recent unrest has prompted the question: Could the supply chain networks and links operate
differently to prevent similar disruption in future?

outh Africa relies on the use of road transport,
amongst other modes, for the delivery of goods
Sacross the country, and because of the increased
traffic congestion the logistics sector already struggles to
deliver on time. It is estimated that more than 80 percent
of freight in South Africa is transported by road.

The recent unrest in the KwaZulu-Natal and Gauteng
provinces (and some small parts in other areas), which
caused significant damage to key infrastructure and facilities,
means this has now officially become worse.

The reality is that the recent protests, followed by a
massive looting spree causing unprecedented levels of
unrest, have destroyed and disrupted vital transport,
logistics, warehousing and distribution facilities in the two
provinces. The South African economy was already reeling
from the impact of the COVID-19-related lockdown and the
general supply of goods and services was already suffering. Lebo Letsoalo, Managing Director of SINCPOINT.
This crisis can only exacerbate these challenges. With
high levels of unemployment and inflation, a contracting declared force majeure last week on the vital Natcor (Natal
economy coupled with stagnating recovery and dwindling Corridor) rail route that connects KZN and Gauteng. The
industrial activities, we are officially in grave trouble. South African Petroleum Refineries, which is responsible
for 35 percent of the country’s fuel supply through Shell
Today, fears of food insecurity and shortage continue and BP outlets, also implemented a force majeure due to
to rise, and because of the density of the situation there are the disruptive unrests. Some logistics companies grounded
new fears of potential other lootings for essential supplies. their operations in risk areas. This has raised fears of fuel
With major logistics companies already reporting huge shortages across the country, posing more threats to
economic activity.
disruptions to their operations, there is no telling when
L O GI S T I CS NEWS inability to honour their contractual obligations due to the the damage is already done. The long-term consequences
normalcy is a possibility.
While some calm has been restored in the two provinces,
Already, a couple of companies have announced their
of this damage will be felt in the years to come – from
more loss of jobs and closure of businesses to a reduction
damage incurred. State-owned transport operator Transnet

22 A U GU S T 2021 www .l o g ist i csn e w s .c o .z a