There have been a number of incidences where unsuspecting smaller manufacturers have incurred significant costs as a result of poor transport and logistics services.
This trend is on the rise as companies try to save costs in an embattled economy by opting for providers of cheap and inferior quality transport and logistics services.
Quinton de Villiers, managing director of Bridgewater Logistics, a leading South African logistics and transport service specialist, warns that this is a short-sighted approach that has been to the detriment of businesses.
“Over the past three years, I have seen more and more companies make this mistake. This has, unfortunately, resulted in extremely costly lessons shortly after appointing a transport company. Due to the inadequacies of the transport and logistics offering, they have been left with damaged and lost stock. In severe instances, they have even become victims of theft.”
De Villiers is concerned that further deterioration in economic circumstances may see more companies dealing with these operators who undercut accepted rates by as much as 15%.
He reminds that while transport and logistics is the highest business cost after manufacturing inputs, it is an extremely specialised field that relies heavily on sophisticated skills, as well as state-of-the-art infrastructure.
Reputable companies, such as Bridgewater Logistics, are unable to provide a cutting-edge transport and logistics service at the unsustainable rates that some of these “fly-by-night” operators do.
Many of these small transporters are unable to meet the onerous commitments of their contracts simply because the rate at which they offered their service was unrealistic in the first place.
“There are many instances where they have gone bankrupt before the contract is completed. When we have been called in by their customers to help, we are simply unable to provide our services at the same rates. This places them in a very awkward position when they cannot deliver their product to where it is needed and on time.”
The founder of Bridgewater Logistics with more than 20 years of experience in the industry places the onus firmly on the manufacturer to do the necessary research before entrusting any company with its transport and logistics requirements.
He says they should ask for references from companies and thoroughly assess their potential transport and logistics partner’s existing standing in the larger industry.
De Villiers says enterprising manufacturers even visit Bridgewater Logistics’ facilities to gain a greater understanding of the services the company is able to provide, as well as the infrastructure it has in place to provide a comprehensive transport and logistics solution.
Struggling manufacturers have also opted to rather discuss rates with Bridgewater Logistics’ management before exploring the services of other transport companies in a drastic attempt to reduce their transport and logistics costs.
This approach has yielded excellent results for Bridgewater Logistics’ existing customers, and the many more that only prefer partnering a professional.