Building Pathways of Progress part 2

0:05
Welcome back to the Unitrans podcast. Today we’re chatting to Gavin and Gareth about infrastructure regulation and logistics reform in Africa. Across Africa, if it’s to modernise systems from digital custom processors to smarter corridor management, those are gaining traction.

0:24
So how can technology enable transparency and digitisation, help reduce bottlenecks and strengthen regional logistics performance?

0:32
It’s a very easy answer and we’ve got this thing called AI and I always joke when you do a presentation, saying in South Africa, we probably need to call it ai, ai, ai, ai, but you’ve got AI. The biggest change that I’ve witnessed in the last five or six years is that, and it’s not necessarily Unitrans, but definitely a lot of transporters, and I might be wrong in terms of Unitrans, are understanding that they actually have access to a lot of data, but they don’t understand how to interpret it.

1:10
It’s data they own, whether they get it through telematics companies or whatever the case may be, their data from the customers and how they operate, fuel consumption, simple stuff. They keep this flood of data. And quite often whoever’s in charge of whatever looks at the bottom line and says, well, last month we used, three million litres of fuel, this month we used 2,000,900 litres of fuel. Shot! There isn’t this question: “why is there a difference? Is this a good or a bad thing?”

1:49
First of all, just because you use less doesn’t mean it was a good thing. It might mean you didn’t do a whole lot of work.

1:56
Your data inputs are important because there’s an old adage, “if you don’t know what’s happening in your business, you’re not going to know when your business closes.” You need to know about your business and data is going to be the cornerstone of it. And that just isn’t where’s my truck at that given point in time on that route.

2:22
You know about AfCFTA, the African Continental Free Trade Area, which is supposed to be coming in place pretty soon. And in Africa time, that could be tomorrow, it could be 40 years from now. It’s the African version of the EU. I’m not saying EU is working too well, but anyway, two things are going to come out of that.

2:45
One can logically make the presumption that you’ll have two types of borders.

2:52
You’ll have seaports because that’s where things will go in and out, and you’re going to have major airports. Look at what you are doing in the Western Cape. You’re building this new airport down here. What’s it for? It’s for trade, nothing else.

3:08
So data and systems are going to have to talk to one another because going forward, Zambia for example, will clear goods destined Zambia or out of Zambia at the port of Durban or at Maputo or at Beira or wherever. You’re going to need to have these systems to be able to understand what, is where, and how it’s affecting your flows.

3:37
Does Africa have the ability to apply that?

3:40
Lots of people say no. I’ve seen stuff in countries to the north of us that actually makes me go: “WOW!” We’re actually behind. Because development has no timeline. Sir, it’s like buying cell phones.

4:01
When you go and buy a cell phone, you know you’ve got it. And I don’t want to pick a brand, but you’ve got ABC 25 and next year ABC 26 comes out. The quantum leaps are tremendous. If you’re not playing in that game, be rest assured your competitors are.

4:22
If you’ve got international markets, the demand for information, I mean, I know of operators, importers, you can see when a container is loaded in Shanghai or in Hamburg and they can then in their logistics supply chains bring in predictability because that is probably over everything, the most important part.

4:50
Same question? You can’t get away without technology. That’s just the reality. We invest heavily in technology, and I think Gavin hit the nail on the head with regards to cost management as one of the critical drivers, just from a data to insights perspective.

5:15
With critical costs, whether it’s tyres, fuel, or labour, you’re looking at the intensity, or the productivity of those costs is absolutely critical from insight to action. I think there’s a lot of us that are spending a lot of time and effort in that, including robotics, AI, etc. At Unitrans, we have a significant focus on that, at the moment.

5:48
I think where technology has to play a more significant part is the interoperability probably. When we talk about where the logistics frameworks fail, it’s around that governance element and from that governance, it’s the financial element with regards to your revenue services. Then it’s about the actual execution and using multi-parties with regards to an execution.

6:13
Not everybody has a vessel. Not everybody has a trucking business. Not everybody has warehousing. But how do you understand, as you said from Shanghai to let’s say Johannesburg where your product is at any given time from a predictability perspective? Then, do you have enough of that product to last you until the next product is scheduled to arrive effectively? Because there’s some significant costs.

6:39
If you think about input costs, if you’re a smelter, if you are somebody who is consistently running a manufacturing environment that’s working 24/7, what would it cost you to stop, particularly if you’re importing certain goods, whether it’s a polymer, a specific kind of blue, metals, either way, you just don’t want to stop. So, line of sight criticality is huge within industry.

7:10
And then obviously how those various elements of governance, financial and execution interplay with it and how you can actually give your customers the comfort around the total end-to-end of what it is they’re asking for. That’s where the uniqueness happens around good customer service.

7:32
So, looking into the future, as logistics networks continue to develop, what conditions and approaches best enable more efficient regional trade and system resilience?

7:43
Look, I think looking into the future… The future’s unpredictable, but the reality is, that there needs to be, based on what we are seeing in Africa, AfCFTA. AfCFTA – I’ll be trying to figure out how to pronounce it.

8:00
If you think about it, that’s fifty-five countries, in Africa that have agreed to this trade environment. If you think about a non-stop rail solution, how effective that would be between countries where you don’t have to stop at borders anymore.

8:18
At the moment a rail system, if you want to take a locomotive into Zimbabwe, you have to have a Zimbabwe loco driver and then that gets to the next border and then it’s got to go to Zambian loco driver, etc.

8:31
It’s complex. It’s time wasted. It’s governance area. If we can free up the environment from a single line of sight perspective, I think the big word at the moment is that single window transaction, where effectively technology will enable us to have a single window view from a commercial as well as a governance perspective. I think it’s absolutely critical for the free movement across territories.

8:55
And that’s just in Africa. Never mind the fact that we actually part of this big thing called the world and that we have to get this interoperability between other countries and our capability as a country within a continent to then interact with global compatriots from a line of sight. Whether that be telematics, whether it be document transfer, whatever it may be, we need interoperability.

9:30
And the smoother the interoperability, the more that virtual environment and the speed up within that virtual environment will allow us to speed up in the physical environment. And as we evolve with that digital space, you’re going to see significant efficiencies and less opportunities for that play within the grey. And we can actually become more physically adept with what we do.

9:57
I don’t think there can be any debate about the future in terms of how radically it’s going to change. I think that’s a given.

10:06
You can look at a couple of things like the energy sources, the fuel sources that we use and how that’s going to impact on how you move goods. And it isn’t only in the road freight industry; it’s going to be in rail.

10:21
I’ve always said there is the symbiotic relationship between various modes, and we were speaking about modes at the very beginning (Part 1). There is a huge requirement for a symbiotic relationship between road and rail. The challenges are going to lie between transshipment, if such things are going to take place, because that’s where cost centre lies.

10:47
So let’s think about something simple. As we move forward and mines move from where they currently are, and I’m talking about open cast mines, not a gold mine, it has a big live shaft (Even though that they move too). You’re not going to keep building a railway line to chase this. You’re going to have road legs that will slowly get a little bit bigger and a little bit longer, maybe more diversified.

11:14
So the question is going to be how we make the operation between those two modes, sustainable, predictable, cost effective. You’re going to have those questions in the future.

11:29
You’re definitely going to have questions around how we employ people and where we get people from and the movement of labour. If we go to this African Continental Free Trade area, which is that acronym I was using, the ideal is that people will be able to move and get work wherever in Africa.

11:53
I can think we’ve got billions of people in Africa who are potential customers. They’re the consumers. There’s no way South Africa, even if it wanted to, is going to be able to meet that demand. We’re going to need to have partnerships, collaborations, call it what you want.

12:11
Unitrans will probably find in a couple of years, I don’t know where all you operate, so I could be saying something where you really operate. But you might find, I don’t know why you’d go there, that you’d be operating in Sudan, Eritrea, or Iran (No, you wouldn’t want to go there).

12:28
You could be operating in places that traditionally you thought weren’t a market. You’re going to have to look at how you enter, and how you progress your future service provision because I think that’s what it is at the end of the day, because the market and the rules in Sudan are going to be different to the rules in South Africa, whether we like it or not. No matter how much all the commonality, brought in customs movement and processes.

13:00
So that’s definitely going to be an issue.

13:03
The sustainable green debate is something that people say 10 years, 15 years, some only be 5 years. I think, in terms of light vehicles, it’s going to be 5 years. It’s maybe not mature yet, and maturity is in terms of vehicle prices, they are still rather expensive. More importantly, the support systems aren’t there. I can go around the corner and get fuel for a vehicle, for a truck, but when it comes to recharging, it’s not that easy. And you can’t, not all the vehicles, definitely not trucks, just plug into 240V. Don’t work unless you’ve got hours to wait for the battery to charge.

13:43
So there’s going to be some things that an operator who is serious about playing in this global market because Africa cannot divorce itself from the global markets. The Americas and the China are really competing for this huge number of consumers in Africa (I don’t think we really know how many consumers there are here).

14:16
You as an operator, as a logistics provider, are going to have to think about various things, warehousing, how you move product from the warehouse to the retail sites, how you do that given the new technology, the new players that are coming in. One of the things that we are discussing at the upcoming convention, are the so-called load broking platforms. Because you now traditionally play against Ubers.

14:44
You have a whole different set of rules. If you’re not applying similar lessons and similar types of processes, you’re going to be out in the cold very quickly because the client is a funny person. I will come to you, and you’ve been working for me for 30, 40, 50 years and you charge me R20 a tonne kilometre. (I’m just using simple numbers) and suddenly somebody pops up for R19 a tonne kilometre. You’re 30-year client, gone. You just check the dust as this occurs because they see this R1 a tonne kilometre saving.

15:22
But what is it really?

15:24
The future is going to be about the data that you have in your possession. You actually have to mine it. You need to understand what does all this mean, and if there’s something in here that I need to tweak, how easy is it to tweak? And how immediately can I bring into play those forces, those changes, those adaptations that are going to allow me to become more forward thinking in the way in which I move from traditional ways of doing things into more open ways of doing things?

16:09
This has been an extremely insightful and interesting conversation. You both were champions. Thank you very much. Through this episode we’ve learned that progress is built through cooperation, dialogue, and long-term commitment rather than quick fixes. Thank you Gavin and Gareth for offering grounded experience-led insights into the realities of reform and infrastructure development. You’ve both reminded us that logistics plays an important role in enabling connectivity, trade, and continuity across the continent.