19 December 1995 saw the launch of the South African Shippers Council as an association, by founders, Sasol (Dr Pieter Nagel Chairman), Iscor (Mr James Osche and Mr J Du Plessis), Samancor (Mr Louis Tolmay) and Ms. Nolene Lossouw as the part time executive director.
Nolene was followed up by LM Pelser around 2007 and Dr Beverley Waugh was his successor for the period 2011 to June 2014. Over the first two decades the council remained on a part time basis with only one part time employee by person of the executive director and the key activity of the council was the bi-monthly council meeting and regular board meetings, where members shared their experiences in their supply chains and areas for focus to lobby what was identified for the executive director.
In spite of its part-time structure and relative few members, the council represented a substantial volume of freight in the South African logistics system and as such had a very strong mandate to drive its objectives.
The reason for the creation of the SASC in 1995 was a need for cargo owners to be able to speak in a united voice. To avoid any possible conflicts of interest between the members of the SASC it was agreed and written into the Constitution that the SASC would deal with Matters of Principle relating to the transport of goods. No Commercial negotiations would be done by the SASC. The main purpose of the SASC was to be a lobbying organisation to change mind-sets within Government & Service providers. Membership of the SASC was restricted to bona fid Cargo owners.
The initial objectives of the SASC per the Constitution were to promote and develop:
- A healthy Logistics climate throughout the Southern African business environment.
- An efficient business environment regarding the total logistics channel.
- Sound business relationships within the logistics related industry between senders & receivers of products on the one hand and logistics service providers on the other hand.
- Sound logistics infrastructure & to guard against price structuring, the condition of services as well as the quality of services.
The first Policy Document of the SASC was drafted in 1995. This document stated that the SASC supported the following goals:
- Private Sector Investment in the logistics operations and State ownership of infrastructure.
- User Charges on a User Pays principle.
- No Cross subsidization i.e. re-investment of profits in the area that the profits were made.
- Equity Based rates i.e. charges based on cost of service and not value of cargo.
Since the inception the membership grew to 18 by the end of June 2014 after a strategic decision to invite major service providers to join the council as affiliate members since 2012.
The members in good standing as at 31 December 2014, numbers 14 shippers (cargo owners) and 13 logistics service providers, 27 in total, reflecting a >50 % growth since July 2014.
Since 2012 the board realised that given the change in the logistics arena where more and more shipper members logistics processes were moving to outsourcing, it was time to expand the membership for the council. The then board under chairmanship of Dirk Nell resolved to invite logistics service providers into the council, as they were at the forefront of operational efficiencies along the freight corridors. The sound three year strategy from 2012 to 2014, given its limited resources, both financially as well as part time executive, culminated in July 2014 into the establishment of a full time office with a permanent CEO and an expansion of area of focus from South Africa to Southern Africa, as more and more of the members were moving freight wider than the SA ports and borders. Since July 2014 some seed funding has been sourced for the transformation process of the council to start into a full time secretariat and office with a CEO, with the following mandate (key performance areas):
- Growing Membership - 50 members at the end of 2015.
- Enhancing Councils Revenue Streams
- Becoming the face of the Council
- Strategy development
- Management of budget
In line with the changing economic environment as well as industry demands, it was realised that the historic model of a part time executive director and relying on members time allocation to promote, represent and fulfil the mandates of the council, was no longer feasible as the cargo owners needed the freight logistics industry to be coordinated across the public and private sectors in a much more proactive collaborative environment to ensure global competitiveness.
It was learnt from the Maputo Corridor Logistics Initiative that such an all-inclusive collaborative stakeholder engagement membership environment was very conducive to build trust and cooperation between the government and private sectors, in an environment where the private sector was encouraged to co-invest with the public sector in strategic transport infrastructure and services. It is realised that the industry at present is not sufficiently represented, especially SMMEs, mainly due to financial constraints and the cost of memberships hence the need to establish the Southern Africa Council, with a strong secretariat, to generate service income as well as to facilitate all stakeholders across the regional freight transport and logistics platform, which then alliances with current corridor initiatives and the potential to drive new corridor initiatives from out of the strengthened regional council.
This process was started on the 18th of June 2014, at a joint board and EXCO meeting, after the part time executive director resigned. Based on research of 60+ industry councils across the globe, is was decided that the SASTALC remain focused on the road of transformation during the leadership change by immediately appointing a full time CEO by name of Brenda Horne-Ferreira, who was the founder and former CEO of MCLI, in order for the SASTALC to take the lead to become the Public Private Partnership, full time secretariat, with an office in Gauteng, for an all-encompassing local as well as regional freight transport and logistics council, across all modes with regional branches for the various corridor clusters which moves freight from and to our ports globally and into our neighbouring countries.
During 2013 a Survey on Concerns for organisations with regards to their supply chains was conducted in partnership with SASC and UNISA across a wide spectrum of industry stakeholders. The following outcomes clearly indicated that transport and logistics costs, operational efficiencies, infrastructure, law enforcement and human resource challenges were matters of serious concern to organisations across their supply chains. The results indicated the percentage of urgency as well as the extent to which it was a concern for the highest concerns. These results clearly indicated the need for an organisation such the council to be the aggregator for collaborative engagement to represent stakeholders across all platforms with the view to bring about improvements.
- Increasing transport costs (94%) (72% to a large extent)
- Operational inefficiencies SA (92%) (55% to a large extent)
- Labour relations in industry (88%) (76% to a large extent)
- HR problems (80%)
- Increasing toll roads & e-tolling (78%) (57% to a large extent)
- Infrastructure quality SA (78%)
- Cross-border inefficiencies (76%)
- Private sector engagement with government (72%)
- Lack of regional integration/harmonisation (70%)
- Rail vs road options (70%)
- Shortage of skills / experienced SC staff (68%)
- Introduction of carbon tax (68%)
- Infrastructure quality Southern Africa (68%)
- Operational inefficiencies Southern Africa (66%)
- Lack of law enforcement e.g. overloading (64%)
- BBBEE & Transport Charter (60%)
- Corruption in logistics activities in Supply Chain Southern Africa (56%)
- Customs/SARS inefficiencies (49%)
- Corruption in logistics activities in Supply Chain SA (49%)
Since 1 July 2014 the newly appointed CEO embarked on an intensive engagement process across the industry to elevate the awareness of the council as well as to affirm what the future direction of the council ought to be, with perceived positive support and a vote of confidence across existing members and future potential members, as well as Transnet, DoT, DtI, UNCTAD, Export councils, SADC and Industry associations, both local and international to name but some.
What was clear is that we had to embark on a process of transformation and greater inclusivity, ensuring governance, structure and programs with a new 3 year strategy and business plan, while communication and visibility was passionately driven to elevate the efficiency and profile of the council.
Typically global councils are established with key seed funding, with then an eventual growth in membership fees and services income until operational expenses can be covered by a balance of about 50% membership fees and 50% generated from services rendered into the industry, hence this is also the path which will be pursued by the council.
In order to achieve this, the immediate focus is to seek key seed funding for a period of three years to establish such a team and to fund such an organization, with the view of self-sustainability over a period of three years through various ways:
1. Public sector/SOC support and funding, such as Transnet, DoT, DtI, TETA, etc.
2. Private sector seed funding contributions
3. Aggressive membership drive (50 members by end 2015, with extended levels to be more inclusive of Public and private sectors)
4. Salient revenue streams, such as a cloud based freight monitoring and tracking system in partnership with T-Systems.
5. Various events in partnerships with partners in a cost/surplus sharing model, such as logistics business breakfasts with JCCI and conferences.
6. Revenue generation through services and eventually 4 high profile annual events with the key identifier that it must be outcome based, to elevate necessary collaborative advocacy and technical work streams for the secretarial with annual follow up and feed backs:
The strategic advantage and benefits of this transformed organisation will be:
- Greater interaction with members, other stakeholders and government officials
- Consideration of other viewpoints for efficiency across supply chains
- Leveraging the power of working together with 1 voice
- Shared resources, ideas & networks
- Improved supply chain efficiency due to advocacy for improved operations and relevant infrastructure
- Improved information sharing, relevant education and skills development for the transport and logistics industry
- Known and preferred point of entry for collective private sector stakeholders with regards to transport and logistics matter across the holistic supply chain into relevant government departments and SOCs.
- A much needed collective knowledge hub with research and industry knowledge and updates through merger with Transport Forum (funding permitted) and partnerships with educational institutions as well as potential new custodian of State of Logistics report (Confidential discussions in pipeline).
- A single membership fee, servicing the council over existing SA Port Corridors as well as new regional corridors through substantial cost saving for shippers and service providers over time because of consolidated centralized secretariat and cost effective platform.
- A strong representative mandate of cargo owners and transport service providers for advocacy and collective planning, including SMMEs, women and the youth transport and logistics groups.
- Greater potential success to aggregate and facilitate electronic monitoring system for tracking, monitoring, evaluation and planning.
- South Africa can play a leading role in the region to drive collective planning, operational efficiencies and reduction of cost of logistics and doing business in and into the region.
- Aggregated focus to attract passionate skills to the industry through annual career expo and to develop employment pipeline.
- Training and capacity building for the industry with shadowing, mentoring and exchanges across public and private sector.
- Networking and continuous communication with affordable conferences to disseminate information and to provide network opportunities.
- Access into the global supply chain, logistics and transport arenas by collaborative agreements with other regional and global councils.
- Building of a strong professional team across knowledge, legal, transport and logistics as well as trade facilitation functional areas to be able to give input into policy through well researched and facilitated engagements as well as to also render services to members and industry which will contribute to longer term sustainability.
In order to achieve this vision, we have to solicit an equally passionate funding partnership to enable the establishment of a full time, permanent Gauteng based secretariat, staffed and equipped with the necessary skills and capacities to deliver a value proposition to our members, the industry and our local, regional as well as global economies. In the meantime the council will continue within its available funding availability with the CEOs key focus on advocacy and to continue sourcing of any other potential seed funding providers.
As the SASTALC board, we sincerely believe that this transformation into a regionally focussed transport and logistics council is what is needed to take the quantum leap in an environment where TRANSNET is investing hugely in the Market Demand Strategy to support our National Development Plan and I am confident that the financial support granted to us to establish and operationalise the council will greatly contribute to create greater trust between the public and private sector, cost efficiencies and cost reductions across the supply chain, build much needed skills and passion, especially across the women and youth of our country, create employment and make us globally more competitive.
During the past 3 years it was resolved to retain board members for a term of 3 years, rather than the constitutional arrangement of an annual election. Based on the above transformation process, it was unanimously resolved to retain the present board members whose term was to end by the end of December 2014, until such time as the transformation strategy has been fully adopted and implemented. This under the newly elected Chairmanship of Andre Botha from EXARRO and Vice-Chairmanship of Lebogang Letsoalo from SASOL, as the chair of the past 3 years, Dirk Nell from Columbus, could not retain his position due to changing work commitments and responsibilities.