Logico Logistics is thriving in an adverse industry. Clint Brook, Managing Director, unpacks the challenges and how they are being confronted.
INTRODUCTION
“The fast-moving consumer goods (FMCG) industry comes with its own set of challenges, which need to be understood and appreciated in order to be competitive and successful in the sector.”
Enter Logico Logistics (Logico). An experienced retail and FMCG specialist with a unique understanding of the field, Logico provides transport services in both long haul and local transport environments, guided by its vision to support customers with cost-effective, service-driven and innovative end-to-end solutions.
The company has achieved this by continually seeking to extend its reach and expand its service offerings through long-term sustainable partnerships with valued customers, whilst remaining profitable and delivering an acceptable return rate to shareholders.
“Logico has always operated in the FMCG environment, and we have had relationships with FMCGs for as long as we have been trading,” says Clint Brook, Managing Director of Logico and orator of the opening statement.
Established in 2004, Logico specialises in patented Volumax curtain side super link trailers and officially has the biggest Volumax fleet in South Africa (SA). Logico’s ability to tailor the design of its Volumax trailer racking systems offers customers an optimised capacity and lowers the cost-per-case with the subsequent reduction in transit damages.
Volumax trailers enable clients to double stack palletised goods, representing an area of opportunity for clients within the packed products sector.
Logico’s fleet of abnormal extendable flat deck trailers, meanwhile, is used to service a host of clients, mainly in the piping industry, specialising primarily in the transportation of large-diameter pipes. Major pipelines already serviced include those of the Durban Metro, Koeberg Nuclear Power Station, Lesotho Highlands Water Project, Mossgas Offshore Oil Platform, and more.
With trailers stretching from 12 to 18 metres in length, complemented by a fleet of secondary distribution vehicles in Johannesburg, Logico has recently diversified into other industries beyond the FMCG sector, such as fertiliser and break bulk.
“We have a very broad spectrum of customers, covering almost everything including paint, chemicals, tiles, car filters, oil, minerals, feed, fertiliser, hand sanitiser, liquor, foodstuffs, cool drinks, and milk to name a few,” Brook tells us.
“Importantly, Logico is also RTMS (Road Traffic Management System) and DG (Dangerous Goods) certified,” he adds, citing the company’s full compliance with the transport industry’s regulatory and legislative requirements.
“Logico has always operated in the FMCG environment, and we have had relationships with FMCGs for as long as we have been trading”
Clint Brook, Managing Director, Logico Logistics
CHALLENGING CIRCUMSTANCES
Logistics acts as a feeder network to a number of industries, especially retail, agriculture and manufacturing. Without transport and logistics, basic supply and demand principles cannot be met as both producer and consumer would be far removed from today’s inter-connected modern world.
The logistics landscape in SA is a difficult environment to operate in, however, with fuel prices doubling in the last two years, insurance rates rising exponentially, and even trailers being hijacked, a problem which continues to plague hard-working truckers in the country.
“We had an armed robbery recently, and then we had another hijacking. They came to our yard armed, stole a truck and trailer loaded with alcohol, and abducted four of our staff,” Brook informs us.
“Hijackings are a regular occurrence in SA. In fact, a similar logistics company to ours closed operations at the end of March, not because they’re failing but because the country has failed them. It’s very sad and unfortunately it’s becoming the norm.”
Due to the current situation in SA, which is making life difficult for transportation companies, Logico has invested in measures to improve truck security and staff safety.
Brook acknowledges that the logistics space has slumped, as it also wrangles to fend off inflationary increases that he admits is of the industry’s own doing. Coupled with increasing fuel prices, which have been steadily going up for over a year in SA, it is playing havoc with cash flow for the industry.
Transportation, along with shipping, is by far the most expensive aspect of logistics, however it has reached the point where the cost of transport is no longer sustainable and there is an evident need for change.
“Logistics is an exciting space to be working in at the moment because of new behaviours driving change to the status quo. Things are changing in terms of the way we do business, the ways in which we transact, and the way we now engage with our clients; there’s evidence of innovation in everything we do,” shares Brook.
“We are always using the latest technology available with regard to emissions, and are looking to expand our fleet into dual-fuel and electric when it becomes available in SA”
Clint Brook, Managing Director, Logico Logistics
VALUE-ADDED LOGISTICS
Through its capacity as an integrated logistics firm, Logico is built on a combination of trust and comprehensive value-added service provision.
The company is always looking to grow its value chain, working on projects to drive down the cost of transport for clients.
“This could come in many shapes or forms, from stock holding and secondary distribution to offering different costing solutions that allow customers to extract as much value out of an asset or solution as possible, or offering performance-based standards (PBS) where asset solutions can offer as much as 24 more pallets per rig, significantly driving down transport costs,” Brook outlines.
PBS is the foundation of an alternative regulatory system for heavy vehicles in SA, in which such vehicles are designed to perform their tasks as productively, safely and sustainably as possible, underpinned by the basic principle of matching the right vehicles to the right tasks.
“There are a number of PBS operations within SA currently, but none on the key corridor between Durban and Johannesburg. This is something that I have been driving for a while, and even in some past positions, but nothing has come of it yet,” he continues.
As a privately-owned, one-stop logistical solutions shop, Logico is in constant communication with clients, many of whom are spoken to daily and are only ever one phone call away from a decision at any given time.
It is Logico’s round-the-clock commitment to customers that upholds its long-standing relationships, some of which have lasted for up to 15 years.
“All of our customers have my number, and my phone is on 24/7. I think what a lot of our valued customers like is that they can call us late at night in an emergency and ask the team to pull a rabbit out of the hat and make something happen,” says Brook.
“We have numerous long-standing relationships and partnerships with clients that we pride ourselves on. The fact we’ve been able to maintain these relationships and service those clients for all these years is quite a feat in this day and age.”
Key to that are supplier relationships, which truly are the foundation of Logico’s success as they form a large percentage of the company’s business.
“Contracts with big companies form a sturdy base from which to operate, rather than on a more ad-hoc basis which is often more profitable in most instances but comes with risk.”
SUSTAINABLE TECHNOLOGY
When used as a substitute for diesel, liquefied natural gas (LNG) significantly reduces greenhouse gas emissions, and owing to the lower level of fuel impurities, engine longevity also improves and therefore saves money in the long run.
Logico recently signed an agreement in October 2020 with emerging domestic natural gas and helium producer, Renergen, to supply LNG at filling stations along the N3 national route between Johannesburg and Durban.
Dual-fuel trucks are undoubtedly the way forward, and as the ability to implement them is on both Logico’s and SA’s doorstep, they are expected to become a reality in the medium-term. The adoption of sustainable solutions has reached a tipping point, and the likes of Logico are among those leading the pack as it looks to mitigate the environmental impact of its logistics operations.
“We are always using the latest technology available with regard to emissions, and are looking to expand our fleet into dual-fuel and electric when it becomes available in SA,” notes Brook, who foresees a steady year ahead before a prosperous 2023 for the company.
“2023 will probably be a year of expansion for Logico with a possible increase to our asset base, but for this year we’ve not seen any major boosts in volumes or rates, and I don’t expect to see any changes in that regard for the remainder of 2022.
“We’re just going to keep on an even keel and steer a steady ship this year, and maximise the bottom line as best as we can in the current circumstances,” he concludes.
