21 September 2018

Logistics and e-commerce: evolution through technology

The impacts of technology are widely felt across all sectors. The advancement of technology as it pertains to the logistics sector is detailed in Broll’s recently released 2018 Logistics Report where the evolution of the logistics sector is discussed. It also highlights commercial activity around South Africa’s four main economic hubs: Johannesburg, Durban, Port Elizabeth and Cape Town.

The report clarifies the difference between the singular function of a warehouse as compared to the multiple functionality of a distribution centre (DC) and the activities involved in logistics. Holistically logistics comprises services that support the physical movement of goods, trade across and within borders including warehousing, brokerage, express delivery, terminal operations and related data and information management.

“A DC offers value-added services including the likes of cross docking, packaging, product mixing and more. DCs also store products, although generally for a shorter time period in comparison to warehouses, and emphasis is placed on the moving of goods to either wholesalers, retailers or even consumers.”

“With the integration of technology and material handling equipment, cyber security is becoming increasingly important as automation and robots are likely to become the norm,” the report notes.

The report reflects on e-commerce and technological enhancements that bring about adaptations in the sector that respond to the changing demands of consumers. This has resulted in multiple channels in the supply chain.

Following the now well founded “sharing” system around services, there are various apps available for the transportation of goods. These apps connect shippers and carriers and allow for real-time freight tracking, alerts, reports and analytics, upfront rates, quick automatic payments and more. A shipper is able to see trucks which are close by and select only the jobs it wants.

Design
Another aspect of the evolvement is the importance of design with particular attention to green-building compliance. “Factors such as lighting, building insulation, water conservation and solar panels are increasingly sought- after for an increased green footprint, as well as potential cost-saving measures. “

Among the factors listed for consideration in the design are intended use, equipment selection, flow of facility; with one-way found to be the best option.

The report explains the complexities of logistics and its influence over tenants and investors and how they select locations. These include proximity to metropolitan areas, regulatory concerns, demographics, transport infrastructure and the total cost particularly as it relates to supply chain.

Having decided on location, other factors need to be considered. Some of these include layout and amenities; inflows and outflows of goods; the size of the facility; fire safety and security among others.

Regional focus
The report, in highlighting the important logistic nodes, describes Johannesburg as South Africa’s main economic hub contributing about 16% of the country’s GDP. The backdrop to this is the turn in economic tide to one that is knowledge-based, with a focus on technology, e-commerce and financial services.

In Durban the high activity areas are in the southern and northern industrial basins, with the area to the north of the city the most active in recent years.

Durban’s industrial land costs are the highest in the country, the report claims, and, “Developers are having to come up with creative ways of increasing yields on these buildings – for example, placing docking doors and dock levellers at 45-degree angles to the yard traffic flow to lessen required yard space and increase yields.”

In Cape Town one of the two prominent logistics areas is the R300 Corridor which includes the industrial nodes of Brackenfell, Stikland Blackheath, Kuilsriver and Bellville South. According to the report, these nodes are easily accessible off the R300, N1 and N2, making this a preferred location for logistics and distribution.

The Coega Special Economic Zone (SEZ) is Port Elizabeth’s centre of logistics. It offers investors “world-class infrastructure, tax incentives, rebates and a duty-free zone.” Existing tenants include Famous Brands, DSV Sun Couriers, ID Logistics, Digistics, FAW and Vector Logistics.

The report expresses the view that logistics should embrace technological influences, innovate where necessary and align with requirements at the basic level, which include reliable connectivity and technology-based security.

To download the full report go to www.broll.com/publications

 

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