Redefining Sustainable Growth in Africa

0:05
Welcome to another episode of the Unitrans podcast. Today, we want to have a reflective conversation about how sustainability and progress are understood in an African operating context. Sustainability today goes beyond environmental impact and includes resilient supply chains, responsible decision making, and long-term value considerations. Joining me in the conversation today is CEO of Unitrans, Edwin Hewitt and Executive of Freight, Sean Jackson, Gentleman, welcome to the podcast.

0:36
Thank you very much.

0:37
We really enjoy having you here. Please tell us a little bit about your roles. And we look forward to discussing how strengthening supply chains and making considered decisions support resilience and continuity over time.

0:49
Thank you. I am in charge of the overall freight business: petroleum and the chemicals business. I’ve been at Unitrans for just under 2 years now. I was brought in to assist with the turnaround of the business, starting with taking small contracts and doing a deep dive into those contracts, understanding what was going wrong with them and putting in the right measures to make sure that operationally we get things right. That then led into me being awarded or been offered the role of the executive for this business. It’s been an 18-month journey that has been full of ups and downs. It’s been a roller coaster, but it’s been fun.

1:28
Besides being the boss, what can you tell us about your role, Edwin?

1:33
I’ve been here just over 2 1/2 years. I was asked by the shareholder of Unitrans to come and assist with the turnaround of the business. Sean and I both have been in the industry in various previous roles. So, we’re bringing some experience to the business and we started this journey. Sean was one of my first team members I picked and we started this journey together. We are excited today. We’re seeing the first positive results from a lot of work that we’ve done. These turnarounds are never easy. They’re quite intense. When it comes to people and clients and shareholders and investment, you know, you have to be very clear on what you want to do and what you want to achieve. It’s been exciting. It’s been tough, but it’s been exciting.

2:28
So to start us off, let’s talk about sustainable growth. Sustainable growth is often discussed broadly. In practical terms, what does sustainable progress look like across Africa today?

2:40
It’s an interesting question because the reality is, there are very few environments where we actually find a model where sustainable growth and progress actually happen in our environment. In the transport industry and supply chain industry, we are finding that it’s a case of everyone’s under pressure. So where we look into a country, like Botswana as an example, the economy is under pressure.

3:07
The institutions that are running the fuel sector in Botswana are under pressure and the knock-on effect on the transport industry is catastrophic. What they’ve done in that space there is that they’ve tried to bring in citizen empowered businesses for all the right reasons. They want to grow local talents and build local businesses. But what we feel is that they’ve done that on the back of an incorrect model and a model that is not structured for sustainability.

3:36
So one of the things that we’ve spoken about at length and what we’d like to try and do is get more involved with those institutions, with the government organisations and try and become the catalyst for a sustainable model in that market. Where we can enable them to empower their citizen own companies and allow them to build businesses that can see through the ups and downs, can see through the economic challenges and can start building a business that they can be proud of, that they can then feed their families with.

4:05
There’s a global geopolitical play at the moment that creates all sorts of dynamics. But I have a simple saying which I always say: “it’s the same for everybody”. You then make a decision in the context of this uncertainty who you want to be and what you want to be and then you go about doing it. We certainly, with the experience we have, the technology we have, the systems we have, the data we have and deep experience in many of these instances and the scale. Sean is humble when he says he runs a business. He runs a business that’s got more than 1000 or 1000 trucks. That’s a complex business that goes across multiple reasons. We transport 2.2 billion litres of fuel. That’s a vast amount of liquids, dangerous liquids that we have to transport.

4:55
You choose to play in that market. It’s how you play in that market. Safety is paramount in his business and the businesses we operate in. And safety becomes increasingly paramount when you go cross-border. We want to influence and change what happens in these regions we operate in. To bring our systems/technology isn’t always easy, but we do eventually get some traction.

5:25
And also the business cycle that we operate in is a long business cycle. So, we have to be patient in what we want to achieve and achieve it ultimately, even it might take a few side routes, but we ultimately get there. That’s my view on that.

5:43
So tell us gentlemen, how do stronger more resilient supply chains contribute to operational resilience and long-term systems ability?

5:53
I think with the stronger supply chain and with the systems, controls, data and the ability to interpret that data that we’ve got, we have the ability to take ups and downs, and we have the ability to almost foresee what’s coming and mould the business around that. I think the supply chain of the future is the one that’s going to be agile. The ability to fleet up, fleet down, the ability to put people in and take people out and just roll with the punches, almost. When I say that we’ve got to get to the stage and the industry’s got to get to the stage where we are a lot more focused on being agile, being smarter, being a lot more responsible around how we spend our money, where we invest, what we invest in, and making sure that we are at the forefront of understanding what the data is telling us and acting on that data.

6:48
I think in the past we’ve had all the data available, but we haven’t made the right decisions around that data. As a result, a lot of transport businesses in our environment get themselves into trouble because they haven’t seen the science. They haven’t seen the warning signs. They haven’t acted on those warning signs. And by the time they start acting, it’s then too late.

7:07
I would add to Sean to say when you have scale, you have flexibility. Having a few trucks is a challenge. Having scale in a large region and having a footprint there makes a difference. The second thing is using data and technology to make good decisions is like, the technology in the assets we use is forever changing. The procurement cycle of where we procure from is changing.

7:38
We look at alternatives today, alternatives not only in where we buy our assets from, but also alternative energy systems like electric buses and short haul electric trucks. We look at those things; we’re forever testing those technologies and then everybody is under the same cost pressure. If you want to compete, you have to be efficient.

8:02
And what Sean and his team is doing very well is, we measure fuel consumption, we measure all the safety components. We have onboard cameras; we have telematics system in the trucks. We can measure the driver behaviour. There are measures that we do for the driver behaviours and there’s a coaching session with our drivers. We improve the mentality and 95% of our drivers are great drivers who drive vast distances across this region.

8:34
We use the technology to become more efficient and we forever looking for better alternatives that makes us more competitive and more efficient. When you have scale, you procure at a different level both the inputs and the assets that we have in our business. That is the mindset that we play.

8:55

Talking about scale in an environment where you’re doing 7 million kilometres a month, the power of 1 cent actually makes a difference. That leads to a per 100 fuel consumption, that R0.05 on tyres, that R0.05 on vehicle maintenance spend, the reduced dead kilometres in that environment. Everything is around operational efficiencies, making sure we get from point A to point B at the least cost available, in the quickest amount of time, allows us to turn the trucks, allows for more volume, allows us to do more loads and more kilometres ultimately.

9:27
A strong supply chain is around managing that data and understanding how to actually impact and ensure that your driver is on the right page and allowing him to become the master of his own destiny by giving him the tools that we’ve got and allowing him to actually make the right decisions based on providing him with that right amount of data.

9:49
Very complex indeed. Now, collaboration and partnerships have come out quite a lot in the previous episodes that we’ve discussed. What role do collaboration and partnerships play in strengthening systems and enabling more reliable outcomes across value chains?

10:05
It’s a massive role.

10:06
So if you take just in an insular basis, our suppliers and ourselves engaging with our telematics suppliers, engaging with our OEMs, making sure that we are getting the best products on the road at the best possible price, making sure that we are ensuring that the specs of the vehicles are correct so that we don’t end up in trouble with our suppliers and our customers down the line.

10:31
Take it one step further, the engagement that our President had with the President of Botswana opening up a corridor where there’s going to be a single entry and exit solution that allows you to not have to clear on both sides will save us a dramatic amount of time. Those engagements at a government level are important.

10:51
Our engagement with suppliers and customers and then understanding what our customers want, building solutions around those, so that again, we can become more of a partner and less transactional, allowing us to actually become something that’s really important to a customer rather than just being another transporter. How we engage with them, the level that we’re talking with them must be at multiple levels across the business and across the different industries to ensure that we have the ability to actually make informed decisions and actually inform the market on what the future looks like.

11:25
It’s a very comprehensive answer. I have very little to add to that except that again the scale comes up and we are being a responsible service provider in the industry. We take no shortcuts. Our assets are serviced properly. We have technology in our trucks, the telematic systems to camera systems, we have control centres we put in. We invest in technology to do route planning and control and monitoring of our drivers. We invest in the right assets, compliant assets because we are transporting fuel, chemicals, people, animals. We make the right decision. We don’t take any shortcuts in our driver training. We spend a lot of time and effort in driver training and as I said, we have experienced drivers that have driven million kilometres for our business, long serving drivers.

12:22
We do not take any shortcuts when it comes to that because we want to ensure that we stay safe and we are responsible service provider to our clients and our scale and who we are as a business keeps us there.

12:35
If we look at sustainable progress, we know that sustainable progress often depends on how different sectors connect from agriculture to energy to logistics. Where have you seen cross sector integration strengthen resilience or unlock long term value?

12:51
I think what’s important is when you talk about partnerships: like partnerships and integrated supply chain services business is a business that’s integrated into your client. Their planning becomes your plan where you fully integrate it on the planning side of that because then you’re efficient. You do the execution part of that, and you report back on what you’ve executed. It is integrating backwards and forwards, having the data available so you can improve the whole supply chain. And that’s when you get to partnerships where it doesn’t become a tender and a cost issue. It becomes how do you make the partnership efficient. Asset test to that is when you sign long term agreements with your clients and you do an open book costing, where you are totally transparent about your cost. We have a cost of capital. We invest that capital into these assets that should be compliant and we declare that and we have a return expectation of what we do. And then that becomes a whole integrated partnership.

13:55
I think in the sectors that we operate, we are quite diverse. There’s very little, I say, collaboration between the different divisions that Unitrans operate in. However I think our diversification is actually our strength.

14:15
So we’re in a Petroleum sector, you’re having a tough period, your Agri business might actually be doing pretty well, or your Poultry business might be doing pretty well. Whilst we don’t necessarily always interrelate, there are times where we’ll have a look with our consumer division as an example where we’re a bit quiet, we’ll actually offer them fleet to run in their environment where they’ve got a bit more work on the go. We’ll drop a fuel tanker, pick up a tautliner, as an example. We have those sorts of instances that we operate in, but it’s more around Unitrans and our sustainability is our strength is in our diversification.

14:57
And scale. Interesting example, Sean transports all those fuels, but it’s also a major fuel consumer. So we have scale on both sides. We become very important in our clients’ lives, the major oil companies because we are a very large client and we are a very large service providers to them and that also gives you, but you need to have scale with it.

15:16
Now looking at your environment as a whole, we know it’s very demanding, how can organisations balance immediate operational demands with long term responsibility and stewardship?

15:25
So I think that’s actually around planning for the future, making sure that you do not make short term, hasty decisions based on what you think you know and making sure that you’re always thinking about what’s happening in 1, 2, 3, or 5 years’ time. If you start making decisions around the here and the now, you will get yourself into trouble and you might make a decision that looks right on paper today, but in six months’ time might be catastrophic. My view and the way I kind of approach things is to always take a very detailed view of what is going on, making sure that the signs are there for either a long term recovery or if there’s going to be no recovery, then you cut and you cut hard.

16:10
So again, it’s around having that agility to make sure that you have the ability with the data that we’ve got on hand to make the right informed decisions that see you through into the future. I don’t believe that it is right to be making decisions on a whim without actually understanding what the opportunities are down the line and without making sure that you’ve covered all your bases when you start making those decisions.

16:36
Understand the markets that you operate. Secondly, decide what you want to be there and when you make that decision, it’s not a short-term decision. It’s not a decision we’re going to be in and out. We’ve been in Botswana and they fuel a large percentage of their fuel for 50 years. So, it’s who you are there and where you play.

16:53
Thirdly to that point is: we’re forever looking at technology, data, systems, planning to improve that to become more efficient. And then again, my point that I keep on coming back to is, having scale in what you do. And then obviously all of this is put together with people: leadership in your business, the owners and the other operators of your trucks, the supervision that you put in place. That as a combination makes you sustainable in the way you operate.

17:27

Process that we’re following now around making sure that we are commercially securing the right business going forward. Whereas historically it was a chase to gain on revenue and not necessarily at the benefit of the business. We’re all about make sure we’re making the right commercial decisions. And when we invest the rand of capital, we need to make sure we’re getting the right returns out of that capital to ensure the long-term sustainability of a particular contract and of a division within the group.

17:56
We are looking at providing more of a service than just a pure commodity offering to our clients and pivoting towards a more services, partnership model with our clients and that creates sustainability.

18:09
So lastly, as operating environments continue to evolve, what principles help guide decision making toward more sustainable and resilient outcomes?

18:19
I think we’ve probably mentioned most of them up to this point. But again, I go back to having the right data on hand, making sure that we have the ability to interpret and understand that data, and then making the right decisions based on the facts that are put on the table. And then fourthly, having the agility to be able to move with the market. So, understanding the market, moving with the market, Edwin mentioned it just now, let’s make sure that we plan the right markets and the right sectors because that also then enables us to make sure that our long-term sustainability is there.

18:55
What we can’t do is see the wall coming and go straight back into the wall knowing that that’s going to be a disaster. We’ve got to have the ability to actually take a step back and have a really good overarching view of what’s going on in the business to allow us to make sure that we make the right decisions to actually take that into the future.

19:15
I want to end off by saying: be very deliberate and focused on what you want to be and where you want to play, ensuring that you’ve got the people capacity and capability to execute that. It’s very dependent on what culture you set in your organisation, very dependent on the culture and we are all about setting high-performance culture, so we expect more of people.

19:38
This is a tough industry. This is not an easy industry. It’s relentless. It’s 24 hours a day, 365 days a year, and countries and economies are dependent on logistics, whatever you define that as.

19:52
And then the last point is having the capacity to scale and delivering sustainable results where you can continue investing, but being, as Sean said, being agile and being truthful yourself about sometimes you have to make hard decisions, but then you make the decision. And you pivot and you are agile and those decisions you make. And then as I said, when those things come and you start getting the results and you get the momentum in the team and in the people and people become innovative. You know, they’re not focused on, are we going to get retrenched? Are we going to change these things? Then you have a positive mindset in that culture. And all of that’s a recipe for success. The probability of success is very high there when all these components are there.

20:41
Gentlemen, thank you so much. We can’t thank you enough. As you’ve seen through this episode, we’ve learned that sustainable progress is shaped through deliberate choices, collaboration, and long-term thinking. Thank you, Edwin and Sean, for sharing insight into what real progress looks like beyond short term gains. You’ve reminded us that rethinking progress means strengthening systems and partnerships that endure.

21:05
In our next episode, we have a strategic CEO level reflection on how leaders think about progress, partnerships and purpose in complex environments.