Leaders in logistics unpack risk resilience

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Logistics risk resilience advice ahead of next week

 

The business environment in South Africa is fraught with risks. Now that the elections are looming, experts in the logistics industry are urging companies to put measures in place to ensure that they can mitigate any risk and uncertainty that may ensue.


The last four years have been categorised by risk on the part of South African companies. First came COVID-19. Then, the July 2021 riots, which saw widespread civil unrest in the KwaZulu-Natal and Gauteng provinces, marked by rampant looting and violence. Businesses were forced to shut down, and employees stayed home for safety reasons. The economic damage was estimated at R50 billionby the Consumer Goods Council of South Africa.

 

Then, in 2022, KwaZulu-Natal experienced severe flooding. This was the province’s most devastating natural disaster on record, resulting in significant loss of life, extensive damage to homes and infrastructure, and a staggering economic impact. Estimated losses totalled R36 billion².

 

 

The impact on the logistics sector was immense. City Logistics, a leading privately-owned logistics company in South Africa, saw a 31% decrease in volumes as a result of the riots and a 37% decrease in volumes as a result of the floods.


Yet, a month after the riots, City Logistics managed to normalise their operation and despite damage to road infrastructure, the month following the floods, the company operated effectively. But how was this achieved?

 

According to Ryan Gaines, CEO of City Logistics, it’s all about preparation. “When facing risks like political turmoil, natural disasters, and social unrest, businesses must ready themselves for unexpected challenges. Preparation is key to reducing both financial losses and personal impacts. This is something that the logistics industry, a critical backbone supporting key sectors, has learnt over the years,” he notes.

 

What can companies learn from the logistics industry? The first thing is that, in order to mitigate risks, companies should compile a Business Continuity Plan (BCP), which establishes protocols and creates prevention and recovery systems for unforeseen circumstances. Each scenario may differ, but the BCP works on building protocols and structure to ensure businesses are prepared for all types of unrest and uncertainty.

 

Just this week, the All Truck Drivers Forum and Allied SA (ATDF-SA) threatened a national shutdown for Monday, May 20, urging all truckers to "down tools" until the government addresses its demands to remove foreigners from the trucking industry. Although the shutdown has since been suspended, City Logistics advises both logistics businesses and passenger drivers to assess affected routes and areas previously impacted by similar events. They should check with local authorities for any incidents before sending trucks or driving into these areas.

 

During times of unrest or uncertainty, businesses also need to prioritise open and clear communication across the company. If employees can't reach work safely – due to reasons like riots, floods, or COVID-19 – they should be able to work from home with full access to company software and tools.

 

Finally, during times of increased risk, companies should ensure that staff members have emergency contact numbers and access to additional security for their protection.

 

 

References:

  1. https://pmg.org.za/committee-meeting/33438/

  2. https://www.wits.ac.za/news/latest-news/general-news/2023/2023-04/the-2022-durban-floods-were-the-most-catastrophic-yet-recorded-in-kwazulu-natal.html 

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