Consolidated international logistics profits customers during challenging economic cycle

Consolidated international logistics profits customers during challenging economic cycle

 

The supply chain business is not immune to the economic challenges faced by other sectors. But South Africans are adaptable, says AREND DU PREEZ, MD of Crossroads. “We create solutions. You can see it in all the current activity throughout the economy as companies try to reinvent themselves.”  In his industry du Preez says people at many organisations understand land-side logistics well. “There’s not a lot of room for service providers like us to improve their knowledge even while we supply them the economies of scale they can’t necessarily achieve on their own,” he says. “But we routinely find that there is poorer understanding of the international leg. It’s not surprising. There’s a lot to learn and some less transparent operators abroad don’t make it any easier.”  One of the major issues, says du Preez, are vested interests and how they impact full and proper disclosure of customer options. International logistics involves numerous third parties. Each fills a specific niche. “A specific service provider may offer customers potential choices that influence time and cost. But the options are often limited to the service provider’s offering. There may well be other options that suit the client’s needs better but the client never gets to hear of them because the service provider doesn’t offer that specific service.”  That is not the case for businesses such as Crossroads.   “We have no vested interest in generating margin for multiple service providers throughout the supply chain,” he says. “And that’s why African businesses benefit from turnkey services such as ours. They’re no longer forced to buy the services of 10 or even 20 individual service providers all the way from road transport in somewhere like China to clearing agents, shipping lines, and more, having to understand the ramifications of issues like demurrage. Instead they get a straightforward business solution that gets them the goods they need, quicker, for less, through a single point of contact, with all the transparency crucial to their own effective business administration.” 

The actual transport, he says, is a fraction of the overall cost.   “Customers need visibility into the process. This way it’s live based on sophisticated IT so they can provide visibility to their own customers. Because that’s part of the cost that affects stock holding. Effective communications are important because it triggers planning ahead of actions which, if you get wrong, impacts costs throughout the supply chain,” he says.   The greater sophistication of the process and the solutions that support it feeds two important business outcomes for customers, says du Preez. Just in time supply chains and overall efficiency improvements that reduce costs.   “How you design the supply chain is a major factor in its success,” he says. “You must collaborate with customers, who understand their own business extremely well. And they often have people deeply experienced in the ramifications of supply chain decisions and implications for their customers in turn.”  A chief aim of modern supply chains seeking to maximise the turnkey source to destination solution efficiencies is removing the human element that ultimately makes them less efficient.   
“There are many pockets of cost throughout the supply chain but when you can influence the entire process, right from the point of origin to the final destination, then the subject matter experts can really dig into the benefits for customers and everyone profits,” he says.   Ends: