South African business owners have had a tough time lately, facing mounting economic pressure from a weak rand, rolling blackouts, and rising interest rates. With the cost of living continuing to climb, squeezing the value out of every cent has never been more important.
This is especially important in the logistics industry, where companies are finding innovative ways to reduce costs without compromising quality. Recently, Professor Jan Havenga, a director of the GAIN Group and a logistics lecturer at Stellenbosch University, noted that reducing costs is necessary, as the current “embedded logistics cost” for commodities in South Africa averages more than 50%1.
While many businesses would simply raise their prices in response to soaring costs and leave the customer to foot the bill, many logistics firms are exploring ways to keep their costs down without impacting their clients.
One of the standout innovations enabling this kind of efficiency is the use of demountable body systems for truck fleets. These clever setups allow a single truck chassis to be paired with multiple cargo bodies. So, instead of waiting for a vehicle to be loaded or unloaded, logistics teams can simply demount the whole body and hook up another, allowing for greater efficiency. “Instead of parking a truck for hours while goods are being loaded, we simply switch out the body and send the truck straight back on the road,” commented Ryan Gaines, CEO of City Logistics. “It keeps our fleet moving and reduces pressure on our distribution centre staff.”
Unsurprisingly, technology is one way to achieve this. As engineers push the limits of what can be achieved, modern trucks have become remarkably efficient and require far less fuel than they did just a few years ago. Keeping an up-to-date and economical fleet of trucks can go a long way in reducing fuel costs and keeping monthly expenses low, even when fuel prices soar. Some estimates even claim that modern trucks are twice as efficient as their counterparts from two or three decades ago.
Of course, electric vehicles will become increasingly popular in the future, even in the trucking industry. Several manufacturers already offer battery-powered trucks for both short and long-distance journeys. Last year, City Logistics trialled an electric Fuso eCanter and was impressed by its driving experience and capability.
Gaines mentioned last year that the company was pleasantly surprised by the electric truck’s ability to handle heavy loads without draining the battery. During the trial, a round-trip journey typically used only 60-70% of the battery. As electric trucks become more affordable and charging infrastructure improves, logistics companies are expected to see significant reductions in fuel and maintenance costs.
But before that happens, there are plenty of other ways for companies to keep their costs low. For example, by implementing route optimisation software, drivers can take the most efficient delivery routes, saving time and fuel. Unlike a conventional navigation system, this sophisticated software analyses not only traffic patterns but also other variables, such as weather, to determine the fastest route.
Beyond the road, logistics companies are also cutting costs through smarter warehouse management. Automation, ranging from robotic sorting systems to AI-powered inventory tracking, streamlines operations and improves accuracy. Predictive analytics tools are helping supply-chain managers anticipate bottlenecks and optimise stock placement, improving speed and accuracy. Citing several sources, such as Statista, Contimod notes that automation can boost warehouse capacity by 50% but also reduce operational errors by a staggering 99%2.
Many logistics businesses are also exploring cross-docking and shipment consolidation to reduce transportation frequency and holding costs. Smaller loads are combined into larger ones, maximising the truck’s carrying capacity and slashing fuel expenses. Of course, this isn’t easier for smaller firms, but partnerships with third-party logistics (3PL) providers offer these companies access to economies of scale, without the overhead costs.
Along with many other strategies, such as sustainable packaging that is lighter to transport and telematics-based fleet maintenance, these innovations and solutions strongly respond to the economic pressures facing the industry, especially when used together.
While no single solution will solve every challenge, combining smarter routing, vehicle efficiency, warehouse automation, and innovations like the demountable body system will help logistics companies stay competitive—and not at the expense of their bottom line or the customer’s wallet.
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