TRANSPORT FORUM

DURBAN

Port Cost As A Component Of Total Supply Chain Cost

Brenda Horne – SASTALC CEO

3 SEPTEMBER 2015

Strive to aggregate inclusive, innovative, collaborative public private, stakeholder advocacy and cooperation across all

modes of transport Transport is a crucial link in the total supply chain

CLORCHEM - NCP COLUMBUS STAINLESS PTY LTD DIVINE MERCY TRADING

EVRAZ HIGHVELD EXXARO FRUIT SA - MZANZI

GLENCOR - XSTRATA HULAMIN SISHEN IRON ORE

COMPANY - ANGLO

MMC - MANGANESE METAL

COMPANY

PALABORA MINING COMPANY -

PMC

SAMREC

SAMSUNG SAPPI EXPORT

SERVICES PTY LTD

SASOL

SEABOARD INTERNATIONAL SIYANDA

TRONOX

INNOVATIVE COLLABORATIVE ADVOCACY ACROSS ALL STAKEHOLDERS AND MODES OF TRANSPORT

AURECON BARBERRY GROUP BIDFREIGHT PORT

OPERATIONS - BPO

BPL - BIDFREIGHT PANALPINA

LOGISITCS

GRINDROD LTD IMPERIAL LOGISTICS

ISAHA LANDSEA-LOGISTICS LBH

OCL- OUR CORRIDOR LOGISTICS PROSADC – LOADSMART QUATTRO LOGISTICS

SAVINO DEL BENE T-SYSTEMS

FNB/RMB

THE RIGHT MIX

DEPARTMENT OF

TRANSPORT

(Integrated freight)

IN PROGRESS: TOLL LOGISTICS

CTRACK; PROFESSIONAL

SHIPPING

IN PROGRESS:

TRANSNET

INNOVATIVE COLLABORATIVE ADVOCACY ACROSS ALL STAKEHOLDERS AND MODES OF TRANSPORT

Globally Supply Chains Compete Not Necessarily Only Products !!!

Hence The Cost And Efficiency Of Transport And Logistics Is A Key Component Of International Supply Chains

And Port Costs (Rates and efficiencies) Are But One Of Many Elements That Deserve Focus

A chain is as strong as its weakest link!

MANAGING TO TOTAL COST OF SUPPLY CHAINShttp://www.imanet.org/docs/default-source/thought_leadership/operations-process-management-innovation/managing_the_total_cost_of_global_supply_chains.pdf?sfvrsn=2

IMA – INSTITUTE OF MANAGEMENT ACCOUNTANTS – www.imanet.org

http://www.imanet.org/docs/default-source/thought_leadership/operations-process-management-innovation/managing_the_total_cost_of_global_supply_chains.pdf?sfvrsn=2

SHIPPER 1 - TEU via Durban to Hoganas, Sweden - CIF HOGANAS

ZAR/MT ZAR/MT ZAR/MT ZAR/MT ZAR/MT

2011 2012 2013 2014 2015

% of Pre

FOB% of

CIF Hog% Change

2011/2015

Rail 339 374 392 426 459 65% 23% 35%

Cargo dues 53 18 31 33 34 5% 2% -36%

THC 54 58 61 74 90 13% 5% 67%

Export documentation 20 20 26 12 17 2% 1% -15%

Empty container placement 0 73 110 110 15% 6%

Total PRE-FOB 465 543 511 654 710 100% 36% 53%

FOB-CIF ** delivered Hoganas 652 1463 1556 1423 1264 64% 94%

Delivered NST-Hoghanas - RTEU 1117 2006 2067 2077 1974 77%

SHIPPER 1

Rail Cargo dues

THC

Export documentaion

Empty container placement

SHIPPER 1 - 2015 PLANT TO FOB COST

35%

-36%

67%

-15%

RAIL

CARGO DUES

THC

EXPORT DOCUMENTAION

-60% -40% -20% 0% 20% 40% 60% 80%

SHIPPER 1 % RATE CHANGE 2011 TO 2015WORKS TO FOB

Series1

SHIPPER 2 – VIA DURBAN - DDP EUROPE

SHIPPER 2 - DDP EUROPE R/TEU R/T% OF FOB % OF DDP

Cargo Dues 2046 93 15% 7%

THC 1471 67 11% 5%

Contsainerisation & cross hauls 4025 183 30% 14%

Customs clearance 1500 68 11% 5%

Shipping Line Release Fee 1000 45 7% 3%

Transport to DBN 3500 159 26% 12%

WORKS TO FOB 13542 616 100%

Ocean freight -Europe 1100 14631 665 50%

CIF to DDP 100 1330 60 5%

29504 1341 100%

15%

11%

30%11%

7%

26%

SHIPPER 2 - PLANT TO FOB

Cargo Dues

THC

Contsainerisation & crosshauls

Customs clearance

Shipping Line Release Fee

Transport to Dbn

7%

5%

14%

5%

3%

12%

50%

5%

0% 10% 20% 30% 40% 50% 60%

CARGO DUES

THC

CONTSAINERISATION & CROSS HAULS

CUSTOMS CLEARANCE

SHIPPING LINE RELEASE FEE

TRANSPORT TO DBN

OCEAN FREIGHT -EUROPE

CIF TO DDP

SHIPPER 2 – PLANT TO DDP EUROPE

Contextualise the LPI for Regional Expansion

WB 2014 LPI Customs Infrastructure Int shipments Logistics Q &C Track & Trace Timeliness

LPICountry score rank score rank score rank score rank score rank score rank score rank

Germany 4.12 1 4.10 2 4.32 1 3.74 4 4.12 3 4.17 1 4.36 4

HK, China 3.83 15 3.72 17 3.97 14 3.58 14 3.81 13 3.87 13 4.06 18

South Africa 3.43 34 3.11 42 3.20 38 3.45 25 3.62 24 3.30 41 3.88 33

Malawi 2.81 73 2.79 62 3.04 48 2.63 108 2.86 70 2.63 100 2.99 100

Namibia 2.66 93 2.27 125 2.57 81 2.70 97 2.69 86 2.56 106 3.15 82

Angola 2.54 112 2.37 114 2.11 140 2.79 84 2.31 128 2.59 103 3.02 96

Botswana 2.49 120 2.38 112 2.23 125 2.42 129 2.58 99 2.40 127 2.94 103

Zambia 2.46 123 2.54 86 2.31 115 2.13 152 2.47 114 2.47 120 2.91 105

Lesotho 2.37 133 2.22 129 2.35 110 2.48 122 2.23 137 2.35 132 2.60 139

Zimbabwe 2.34 137 1.89 154 2.25 123 2.25 143 2.50 108 2.22 143 2.93 104

Tanzania 2.33 138 2.19 135 2.32 114 2.32 137 2.18 145 2.11 150 2.89 107

Mozambique 2.23 147 2.26 126 2.15 135 2.08 154 2.10 153 2.08 152 2.74 134

Congo, Dem. Rep. 1.88 159 1.78 158 1.83 156 1.70 160 1.84 158 2.10 151 2.04 159

RANGE OF LPI’S GREATEST CHALLENGE TO REGIONAL

TRADE GROWTH

SOLUTIONINNOVATIVE

COLLABORATION TO WORK

TOGETHER TO IMPROVE QUALITY OF SUPPLY CHAIN

SERVICES Regional Expansion: Overcoming Logistical Challenges to enable Southern African Supply Chains

SUMMARY –Port Cost As A Component Of Total Supply Chain Cost• Port cost are very important – every R = impact on global competitiveness

• Port regulator has demonstrated the importance of its role in SA

• We have to focus on ALL elements from plant to destination

• Equal focus on operational efficiency and costs

• All elements have to be benchmarked - individually and collectively

• All elements have to be regularly evaluated - individually and collectively

• Equal collaborate advocacy – across all elements – public private dialogue

• Very important that all stakeholders contribute to create a greater understanding of the impact of all elements collectively across our distribution chain.

• Lets look at the current work/documents on the table from DoT – it is our responsibility to play our role as users/shippers & service providers

Areas currently on the DoT table to name but some:1. The Launch of the National Transport Forum – Member Pillar 1 2. Development of the Integrated Multi-modal Transport Planning and

Coordination draft bill3. NATMAP 20504. National Freight Logistics Strategy5. National Corridor Strategy6. National Land Transport Strategic Framework 2015-20207. Road Infrastructure Planning Strategy8. Maritime Technical Committee Discussion Document9. Re-visiting and potential redrafting of the ports bill10. Twenty First Amendment) to the National Road Traffic Regulations. The Government Gazette is No 38142 published on 31 October 2014

11. STER ……………..and many moreDOCUMENTS IN THIS REGARD AVAILABLE FROM SASTALC

SASTALC SERVING OUR INDUSTRY (90 Newsflashes since July 2014)-• Strengthen mandate through > 25 industry associations – local, regional,

continental, global• Double membership since July 2014• Department of Transport joined as strategic government department member

= PPP• Acknowledged by SADC as regional industry organisation• MoU with Africa Union of Shippers Councils• Facilitated SG of global shippers forum – 2 s/h engagements on Safe Container

Packing and Mandatory verification of container weights• Facilitated engagement with SAMSA & Keys s/h’s – Mandatory Verification of

Gross Container Weights – (All export containers to be shipped from 1 July 2016)

• Facilitated a visit by high level delegation of Congolese Shippers Councilto engage with TRANSNET/ TPT/TFR/other terminals

• Submission to Minister of Transport on proposed freight truck ban over peak hours

SASTALC SERVING OUR INDUSTRY (90 Newsflashes since July 2014)-• Nominated to the board of the EMC - various meetings• Participated in the NBF Afri-ID Working Group North South Rail Corridor

Meeting• Participated in the various TRANSPORTSIG Transport Forums• Participated in the Rail Working Group Meeting – Luxemburg Protocol –

register for rail equipment – finance security• SADC Business forum in Gaborone - first SA shippers/transport representation• COMESA – Transport association meeting invited by USAID• Submission to NPR – pricing application• PCC’s • Participate in SARS stakeholder meetings• Participate in associate member activities• Submission to the NPR – on 5 year evaluation & sent out questionnaire• Submission to DTI on the RIA of the Export development bill and sent out

survey

SASTALC SERVING OUR INDUSTRY (90 Newsflashes since July 2014)-• Tripartite Transport and Transit Facilitation Programme Meeting in Gauteng in

August-Harmonisation of cross border transport –• Prior meetings:

• Vehicle load management strategy and implementation plan &• Vehicle load management MoU (VLM MoU)

• This meeting considered the validation of the following:• Tripartite vehicle regulations and standards• Driver Training and Licencing for Commercial Vehicles• Harmonisation of Cross border Third Party Motor Vehicle Insurance Schemes• Proposed Self regulatory Scheme – RTMS• Tripartite Transport Registers (TRIPS), information platform and systems

• Vehicles, Drivers, Operators, Infringements, etc.• Draft multi-lateral Cross border road transport agreement (MCBRTA)• Implementation Plan for the Harmonised Tripartite Cross Border Road Transport Regulations and StandardsDOCUMENTS IN THIS REGARD AVAILABLE FROM SASTALC

• Mentoring women and youth industry associations• Conference presentation to promote the SA transport infrastructure and

services as a voice of the shipper and their service providers• Logistics business breakfast – facilitate public private sector dialogue !) Ports

and Shipping 2) Road Regulations 3) Changing Customs Environment 4) Rail -right balance – opportunities and challenges

Please diarise the date of our last Logistics Business Breakfast

Date: 13th October 2015Topic: Rail and Intermodal Transport

“The benefits and challenges of the right balance”SAFE TRAVELS – REMEMBER LIGHTS ON SAVES LIVES

BIDFREIGHT PORT OPERATIONS - BPO

BARBERRY GROUP

SEABOARD INTERNATIONAL

IMPERIAL LOGISTICS

OVERVIEW- DIAGRAM

PUBLIC SECTOR

SARS Legal

A

Act 30 and Act 31

Rules

StandardOperatingProcedure

B

Data field Management

C

SARS -Operations

Inter front

D

PRIVATE SECTOR

Importer

Exporter

Guarantee/Risk

Activity

Licencing/Registration

LegalEntity

Person Facility

e-filing

EDI

Data fields

IT Platform

Reporting

Time

Data field

Compliance

Audit

1

23

4

5

Policies

Excise Act 91

Extended Supply ChainTrade

• Risk Profile/Behaviour Patterns• Compliance• Import/Export –

Gap - Agent

Result in deliverables