Date: 20/09/2004
Source: Ministry of Transport
Title: J Radebe: International Federation of Freight Forwarders Associations Congress
OPENING ADDRESS BY JEFF RADEBE, MINISTER OF TRANSPORT, DURING THE INTERNATIONAL FEDERATION OF FREIGHT FORWARDERS ASSOCIATIONS CONGRESS, 20 September 2004
It is my pleasure to welcome you all to the Fiata congress 2004. I am informed that there are a number of distinguished visitors from beyond our borders, who, by their presence here tonight underline the fact that our business is international and our reach global! Our warmest African welcome to you all!
As representatives of the freight forwarders community, you are more aware than many people of the great strides that our democracy has made since its inception just those 10 short years ago. Sometimes when things get particularly hectic, 10 years seems like a very long time ago, but I can assure that the magnitude of much of what we have achieved is breathtaking. In this short time, we have become a respected and acknowledged global role player; we are proud promoters of the African Renaissance; our country is recognised as a mediator between warring countries and we are peacekeepers.
None of this would have been achieved without the unerring support of our African brothers and sisters and the international force of the anti-apartheid movement. As we embark with the rest on the continent on the long road of Africa's renewal through NEPAD, I am deeply conscious of the role that transport infrastructure plays across the country and the continent itself.
Just this morning in Cape Town I had occasion to address an important forum of business and commercial leaders on the challenges of the logistics supply chain in our country's economic development. If you allow me to share just a few of those thoughts with you to set the stage, I will be grateful.
One readily accepted definition suggests that logistics is "that part of the supply chain process that deals with the transportation, warehousing, as well as the inventory administration and management of physical products between the point of production and the point of delivery to the final consumer". However, we should note that this excludes a range of cost factors, such as storage and transport costs which occur during the production process.
With this caveat, it is interesting to note that the total throughput (inclusive of local production and imports) in the whole SA economy that requires logistics interventions amounted in 2003 to 745 million tonnes, divided between 49% for mining, 45% for manufacturing and 6% for agriculture. Even more revealing, though, is the estimate that it cost R135 billion in 2003 in transport costs to move that quantity, where 62% of the total cost was attributable to long-haul road transport, 22% to road distribution, 8% each to rail and air, and 1% to pipeline and water modes. It is estimated in the overall picture to include the logistics costs of the transport system itself, then logistics costs to the South African economy is in the region of 14.7% of GDP, and transport represents some 75% of that cost. Transport is the biggest contributor in both the secondary sector of the South African economy, or 78%, and in the primary sector, at 60%.
Looking at the wider picture we should all note, too, that a critical component of Africa's trade relates to transport costs and their impact on the import bill. A 2002 UNCTAD Review provides the following sombre note: "In 2001, the total freight costs of African developing countries as a proportion of import value were 12.65%, which is considerably higher than the average of 8.7% for developing countries. It is more than double the percentage for market economy countries and the world average." When we consider the continent as regions, Northern Africa has the lowest freight cost average, at 11.21%, and the island states of the Indian Ocean at 12.23%. East coast countries are also slightly below the continental average, at 12.35%, but as we go west and south, the picture gets worse: western African freight cost averages are 13.9% and southern Africa, some 16.42%. The average cost for sub-Saharan Africa, excluding South Africa, stood at 13.84% in 2001, but the highest cost was for land-locked countries at 20.69%.
Delays that are often experienced at border posts also impede the development of a seamless transport system. In Southern Africa, for example, one survey suggests that delays range on average between 4 hours (at Pioneer Gate between SA and Botswana) and 36 hours (at Victoria Falls between Zambia and Zimbabwe), or 17 hours at Nakonde on the Tanzam corridor between Zambia and Tanzania. The cost to the southern African region is estimated at some $48 million annually!
Clearly this is not a situation that bodes well for NEPAD or indeed for regional development and growth.
How do we overcome these problems? By forming partnerships between countries, across borders, between business entities and state enterprises, and of course with the international trade and investment community.
For this reason, we have freight forwarders, who play a vital role in facilitating the movement of all modes of transport. Freight forwarders have a huge responsibility to the client, the consignees, local government organisations transport companies, shipping lines and airlines. Freight forwarders must be multi-tasked and multi-skilled and need to be dynamic and be able to compete with International counterparts. We are therefore very proud to host the conference this year because it gives us South Africans the opportunity to showcase our strengths on the one hand and, much more important for us, to learn from the vast experience that such conferences gather under one roof.
As South African freight forwarders, we had to deal with our history that is the embargoes that were placed on us, and then 10 years later we have to compete with all international standards and still maintain our status quo.
In the days before democracy, South African freight forwarders were brought up in the murky world of international embargoes and how to get around them. Today, we expect our Freight Forwarders to act professionally, implement systems, aim for sustainability, accept responsibility, practice honesty with high integrity, pursue innovation, provide value for money, employ competent personnel, implement training programs, develop and maintain standards, employ quality control systems, employ continuous improvement policies and off course to strive to be the best.
All of us need to do more to ensure that we inject new life into all of our industries. In South Africa we have embarked on various training programs through our SETA and TETA structures where we are trying to ensure continuity of our Industry. As you know that Freight forwarding is a much specialised industry and it takes a very committed person to survive in this Industry. I am happy to say that more and more young learners are now joining the industry through the efforts of the respective controlling SETAS.
South Africa possesses a large resource base of skilled, semi skilled and unskilled people. The South African government has introduced wide ranging legislation to promote training and skills development and to fast track the building of world class skills and competence.
A strong network of universities and other tertiary education institutions is home to leading international academics and researchers. We are also pleased to host a number of learners from African countries who have chosen to come and expand their vision here. It is of course only a small contribution that we can make.
AIDS is one of our biggest challenges. The pandemic is responsible for the loss of many of our skilled workforce; however, through intensive government initiatives we have managed to try to control the spread of HIV AIDS through awareness campaigns. A lot of work still has to done and this requires ongoing commitment.
Customs used be every bodies bane of life. Whilst service provision can always be improved, it would appear that despite the delays and uneven structures and policies that exist within and between African countries, there is today greater recognition that more needs to be, and will be done to improve this critical area of transportation. We should all embrace the mission to optimise revenues, facilitate trade and enlist new tax contributors by promoting awareness of the obligation to voluntarily comply with the tax and customs laws of various countries and to provide quality and responsive service to the public everywhere.
The industry however is not without its problems and daily we are faced with challenges that try our best efforts. Some of the problems faced by freight forwarders are:-
Infrastructure, transport, port authorities, customs, lack of trained personnel, cultural differences, language barriers, time differences, lack of technology, lack expertise financial constraints, airline surcharges and delays, shipping line surcharges and delays and lack of equipment and failure of equipment. However though our concerted efforts we are trying to overcome these problems by using the specialist service providers.
I believe that strong analysis will flow from your work, and I look forward to any suggestions that may emerge from your forum to improve how we go about the freight forwarding business, both in South Africa and beyond.
May I wish you every success and a pleasant stay in South Africa!
I thank you
Issued by: Ministry of Transport
20 September 2004
Source: Department of Transport (http://www.transport.gov.za)
Source: Ministry of Transport
Title: J Radebe: International Federation of Freight Forwarders Associations Congress
OPENING ADDRESS BY JEFF RADEBE, MINISTER OF TRANSPORT, DURING THE INTERNATIONAL FEDERATION OF FREIGHT FORWARDERS ASSOCIATIONS CONGRESS, 20 September 2004
It is my pleasure to welcome you all to the Fiata congress 2004. I am informed that there are a number of distinguished visitors from beyond our borders, who, by their presence here tonight underline the fact that our business is international and our reach global! Our warmest African welcome to you all!
As representatives of the freight forwarders community, you are more aware than many people of the great strides that our democracy has made since its inception just those 10 short years ago. Sometimes when things get particularly hectic, 10 years seems like a very long time ago, but I can assure that the magnitude of much of what we have achieved is breathtaking. In this short time, we have become a respected and acknowledged global role player; we are proud promoters of the African Renaissance; our country is recognised as a mediator between warring countries and we are peacekeepers.
None of this would have been achieved without the unerring support of our African brothers and sisters and the international force of the anti-apartheid movement. As we embark with the rest on the continent on the long road of Africa's renewal through NEPAD, I am deeply conscious of the role that transport infrastructure plays across the country and the continent itself.
Just this morning in Cape Town I had occasion to address an important forum of business and commercial leaders on the challenges of the logistics supply chain in our country's economic development. If you allow me to share just a few of those thoughts with you to set the stage, I will be grateful.
One readily accepted definition suggests that logistics is "that part of the supply chain process that deals with the transportation, warehousing, as well as the inventory administration and management of physical products between the point of production and the point of delivery to the final consumer". However, we should note that this excludes a range of cost factors, such as storage and transport costs which occur during the production process.
With this caveat, it is interesting to note that the total throughput (inclusive of local production and imports) in the whole SA economy that requires logistics interventions amounted in 2003 to 745 million tonnes, divided between 49% for mining, 45% for manufacturing and 6% for agriculture. Even more revealing, though, is the estimate that it cost R135 billion in 2003 in transport costs to move that quantity, where 62% of the total cost was attributable to long-haul road transport, 22% to road distribution, 8% each to rail and air, and 1% to pipeline and water modes. It is estimated in the overall picture to include the logistics costs of the transport system itself, then logistics costs to the South African economy is in the region of 14.7% of GDP, and transport represents some 75% of that cost. Transport is the biggest contributor in both the secondary sector of the South African economy, or 78%, and in the primary sector, at 60%.
Looking at the wider picture we should all note, too, that a critical component of Africa's trade relates to transport costs and their impact on the import bill. A 2002 UNCTAD Review provides the following sombre note: "In 2001, the total freight costs of African developing countries as a proportion of import value were 12.65%, which is considerably higher than the average of 8.7% for developing countries. It is more than double the percentage for market economy countries and the world average." When we consider the continent as regions, Northern Africa has the lowest freight cost average, at 11.21%, and the island states of the Indian Ocean at 12.23%. East coast countries are also slightly below the continental average, at 12.35%, but as we go west and south, the picture gets worse: western African freight cost averages are 13.9% and southern Africa, some 16.42%. The average cost for sub-Saharan Africa, excluding South Africa, stood at 13.84% in 2001, but the highest cost was for land-locked countries at 20.69%.
Delays that are often experienced at border posts also impede the development of a seamless transport system. In Southern Africa, for example, one survey suggests that delays range on average between 4 hours (at Pioneer Gate between SA and Botswana) and 36 hours (at Victoria Falls between Zambia and Zimbabwe), or 17 hours at Nakonde on the Tanzam corridor between Zambia and Tanzania. The cost to the southern African region is estimated at some $48 million annually!
Clearly this is not a situation that bodes well for NEPAD or indeed for regional development and growth.
How do we overcome these problems? By forming partnerships between countries, across borders, between business entities and state enterprises, and of course with the international trade and investment community.
For this reason, we have freight forwarders, who play a vital role in facilitating the movement of all modes of transport. Freight forwarders have a huge responsibility to the client, the consignees, local government organisations transport companies, shipping lines and airlines. Freight forwarders must be multi-tasked and multi-skilled and need to be dynamic and be able to compete with International counterparts. We are therefore very proud to host the conference this year because it gives us South Africans the opportunity to showcase our strengths on the one hand and, much more important for us, to learn from the vast experience that such conferences gather under one roof.
As South African freight forwarders, we had to deal with our history that is the embargoes that were placed on us, and then 10 years later we have to compete with all international standards and still maintain our status quo.
In the days before democracy, South African freight forwarders were brought up in the murky world of international embargoes and how to get around them. Today, we expect our Freight Forwarders to act professionally, implement systems, aim for sustainability, accept responsibility, practice honesty with high integrity, pursue innovation, provide value for money, employ competent personnel, implement training programs, develop and maintain standards, employ quality control systems, employ continuous improvement policies and off course to strive to be the best.
All of us need to do more to ensure that we inject new life into all of our industries. In South Africa we have embarked on various training programs through our SETA and TETA structures where we are trying to ensure continuity of our Industry. As you know that Freight forwarding is a much specialised industry and it takes a very committed person to survive in this Industry. I am happy to say that more and more young learners are now joining the industry through the efforts of the respective controlling SETAS.
South Africa possesses a large resource base of skilled, semi skilled and unskilled people. The South African government has introduced wide ranging legislation to promote training and skills development and to fast track the building of world class skills and competence.
A strong network of universities and other tertiary education institutions is home to leading international academics and researchers. We are also pleased to host a number of learners from African countries who have chosen to come and expand their vision here. It is of course only a small contribution that we can make.
AIDS is one of our biggest challenges. The pandemic is responsible for the loss of many of our skilled workforce; however, through intensive government initiatives we have managed to try to control the spread of HIV AIDS through awareness campaigns. A lot of work still has to done and this requires ongoing commitment.
Customs used be every bodies bane of life. Whilst service provision can always be improved, it would appear that despite the delays and uneven structures and policies that exist within and between African countries, there is today greater recognition that more needs to be, and will be done to improve this critical area of transportation. We should all embrace the mission to optimise revenues, facilitate trade and enlist new tax contributors by promoting awareness of the obligation to voluntarily comply with the tax and customs laws of various countries and to provide quality and responsive service to the public everywhere.
The industry however is not without its problems and daily we are faced with challenges that try our best efforts. Some of the problems faced by freight forwarders are:-
Infrastructure, transport, port authorities, customs, lack of trained personnel, cultural differences, language barriers, time differences, lack of technology, lack expertise financial constraints, airline surcharges and delays, shipping line surcharges and delays and lack of equipment and failure of equipment. However though our concerted efforts we are trying to overcome these problems by using the specialist service providers.
I believe that strong analysis will flow from your work, and I look forward to any suggestions that may emerge from your forum to improve how we go about the freight forwarding business, both in South Africa and beyond.
May I wish you every success and a pleasant stay in South Africa!
I thank you
Issued by: Ministry of Transport
20 September 2004
Source: Department of Transport (http://www.transport.gov.za)
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