Page 23 - Logistics News - July August 2022

A U T O M O T I V E INDU S T R Y

Bidvest International Logistics gives the inside take on how South Africa’s motoring industry
is using decelerated globalisation to its advantage.

he war in Ukraine and its impact on the Bekker also points out that because South Africa
world economy has once again exposed the is geographically isolated from major economic hubs,
T risks inherent in globalisation. The conflict the cost of moving goods to the country from Europe
has further disrupted global supply chains already or the US is far higher than moving goods within the
strained by the COVID-19 pandemic and, according US or Europe. “This means that localisation has a
to Simon Geale, Executive Vice-President at supply significant logistics cost benefit, while also allowing
chain consulting firm Proxima, the deceleration of far more flexibility in the supply chain through
globalisation is now a certainty. not being dependent on long global shipping lead
times.”
Given all that’s transpired internationally in the
past two years, businesses are now nearshoring their Port and border congestion, which remains a
operations in an attempt to negate issues of cargo threat to supply chains, further strengthens the
congestion and suspension of goods and services case for localisation. A May 2022 white paper by the
provision globally. Shoring up local supply networks World Economic Forum indicates there is growing
is vital if South Africa is to keep its head above water demand for cross-border regional integration in
amid speculation that another recession is imminent. southern Africa, with South Africa’s ports and
borders playing a significant role. South Africa has
Businesses would do well to follow the example been proactive in this regard, introducing electronic
of South Africa’s automotive sector, says Bidvest supporting documents, a mobile application tool that
International Logistics’ Supply Chain Solutions allows inspection results to be captured and a web-
Manager, Willem Bekker. “South African automotive based platform for end-to-end processing of customs
manufacturers have been implementing local sourcing clearances.

strategies for years. This has been driven by incentive
programmes put in place by the Department of Trade, The effect has been a reduction in the time

Industry and Competition (DTIC), specifically the needed for physical inspections from eight hours to
Automotive Production and Development Programme two on average, a simplification of real-time customs
(APDP), called APDP 2 in its current form. In order to declarations to as little as seven seconds and halving
qualify for the significant incentives offered by this the number of days to import goods. Cargo scanners

programme, the locally based automotive original and electronic cargo tracking systems have also now
equipment manufacturers (OEMs) have had to made it possible to monitor goods in transit in real
implement increasingly high targets for sourcing locally time.

produced content for manufacturing. This means that
when it comes to local sourcing, our motor industry is in The shifts occurring are all about building
a far better position than other countries.” resilience, Bekker says. The traditional just-in-time
model has become one that emphasises just-in-
The major impact of the APDP is that it case as supply chains are redefined. “You have to
starts to create an entire value stream of locally consider first-tier suppliers’ exposure to the risks
manufactured goods and services linked to the you are trying to avoid. This works best by strong
automotive industry. Newer versions of the policy collaboration throughout the supply chain, building
stress activities outside of the direct manufacturing long-term relationships and partnerships with key L O GI S T I CS NEWS
operations, such as second- and third-tier component suppliers and jointly understanding the macro-
suppliers, service provision, distribution and logistics level benefits of realising a successful localisation
systems and infrastructure. strategy.” •

www .l o g ist i csn e w s .c o .z a JULY/A U GU S T 2022 21