Warehousing in South Africa today – and the near future

Worldwide, in the warehousing business, when future operations are discussed, the conversation is likely to be about more automation, greater variety, better systems, more integration, more efficiency and greater flexibility. In South Africa the focus is somewhat different.

As the exchange rate rapidly approaches R20 to the US dollar, along with declining commodity prices, labour instability and looming junk status, local discussions are likely to focus more on “how do we survive in this hostile environment”.

The next few years in South Africa are going to be really challenging and it will be interesting to see how warehouse operators cope with these challenges. What happens when the cost of a reach truck moves over R1-million or grows to R2-million?

South African companies are going to have to look at a whole different approach to business life.
Rather than solving growth problems, South African companies may be forced to look at simply improving productivity or working longer hours with the existing equipment. Certainly, managers are also going to see a lot more focus on removing existing constraints.

Let’s also look on the bright side. There are many companies that make a living from exporting products that have not been hit by a global commodity slowdown – such as companies who manufacture industrial and consumer goods.

Also, there are many profitable companies in South Africa that have big piles of cash, who will now think twice before investing offshore. They will rather look at better value for money locally, and that means investment in new infrastructures in South Africa.

The future might seem very challenging, but there are many positives amongst the negatives. South African companies must seek out those positives and build on them.