Creating Value Through Efficient Logistics Solutions and Strategic Acquisitions

Although the South African economy has shown a measure of growth in the latest quarter¹, widespread recession across market sectors still abounds. This is true for the supply chain industry which has seen Logistics Service Providers (LSPs) drop rates in an effort to compete and grow market share.

Where does this leave customers? Value Logistics, a born and bred South African supply chain partner is confident it can counteract the pressure with new strategies for greater efficiency.

“Current market rates are not sustainable and this is evident in the number of LSPs closing down. For the interim this is unsettling however in time, perhaps over a period of years, it will lead to price stabilisation,” says Steven Gottschalk, CEO of Value Logistics – an established end-to-end LSP with a focus on long-term sustainability for all parties in the supply chain.  “We are geared to bridge this time of volatility, ensuring that customers continue to enjoy a value service offering with a long-term future vision. With our economies of scale and ability to offer vertically integrated services, combined with our approach to finding innovative ways to save cost

and improve efficiencies, we work hard at doing this,” he says.

Logistics viability needs the right capabilities

One of the challenges faced by LSPs is a shift to small consignments as customers look to distribute smaller loads in depressed market conditions.

“LSPs need to rethink their business strategies to accommodate this requirement of small consignments as running full truck loads at partially loaded prices are, in many instances, no longer achievable due to low volumes,” he explains. “Where service providers have been distributing smaller quantities but not adjusting rates, many  can no longer do so. On the other hand, customers find themselves unable to absorb higher prices.”

“What gives Value the edge, is that through our Breakbulk Logistics Services we are able to deliver smaller quantities whilst maintaining viability. To make it work we have to choose our customers carefully,” he explains. “We have learned that to innovate and offer both cost-effectiveness and efficiency, the right combinations of goods are also needed.”

Customisation and innovation to meet customer needs

Logistics is not easy to control as customers’ volume requirements may change unexpectedly and frequently.  Gottschalk adds: “With our capacity to be flexible, we try our best to accommodate customer changes as far as possible as and when needed and manage that effectively.”

The Value way is to customise for each customer, providing the best possible offering. “Value looks objectively at our customers’ businesses and come up with innovative solutions that increase efficiency. For example, looking at warehousing we assess how we can speed up the process of picking, loading and off-loading, which links to how we organise goods in the warehouse.”

Value Logistics also services a number of global companies who bring goods into the country that needs to be warehoused and distributed. A number of these customers have commented that in terms of infrastructure and service, the Value Group offers a level of service that is, in a lot of instances, above that of the European standard.

Strengthening service offerings through strategic acquisitions

Gottschalk further highlights that part of Value Logistics’ drive for efficiency is strategic acquisitions. “The skill lies in finding the right match. Being able to identify companies with offerings that complement our service portfolio and that will fit our customer-focus and innovative culture, is imperative. Also, such acquisitions should increase our economies of scale in a profitable way.”

Since 2000, Value Logistics has acquired Fleet Rent, Rent-a-Bakkie, Freightpak, Core Logistics, Rennie Technology Logistics, R&C Express and Key Distributors. The acquisition of Key Distributors unlocked a new market for the Group. The relevance of this retail route-to-market business has an excellent fit for customers in the retail market space, enabling them to supply the country’s informal sector.

Value Logistics has world-class capabilities that empower innovation, making operations across supply chains super efficient. “We offer small company service levels at a grand scale and through the years, we have managed to retain the important personal touch in service delivery,” concludes Gottschalk.

1 – Statistics South Africa: http://www.statssa.gov.za/?p=12471