Changing the face of the logistics industry in South Africa can be advantageous to our economy.
It moves, it shakes – and it delivers. This is the logistics industry in South Africa which, according to one of its biggest players, is in great shape, barring one or two challenges.
Charles Brewer, MD Sub-Saharan Africa, of DHL Express, told Leadership in a wide ranging interview that the future of the industry looked bright and promising.
Brewer says there are two things that set DHL apart from the rest: passion and people.
Throw in an “insanely customer-centric approach” and, he says, you have a classic recipe for success.
“It is difficult to pinpoint what makes us so special. Personally, I believe there are a few things that make us the market leader in our industry but, also, it is an amazing place to work and an amazing company to do business with,” says Brewer.
Everything, he says starts with people, “and we put a lot of focus and energy into not only finding the right people, but in developing and mentoring them.
“As I travel in Africa, I am always touched by the passion that our people have for the business – for every shipment. There are so many people in our business that live and breathe logistics – couriers who are at work at 6h00 every day, customer service agents who handle every call with the utmost care. It’s a motivating and gratifying experience.”
When it comes to being “insanely customer-centric,” Brewer says this is a simple concept but one that has become a mantra at DHL. “If we can make our customers successful, we’ll be successful. This permeates at every level of our business”.
A phenomenal journey
Asked about his own history with DHL, Brewer says he has had “a long, interesting career” with the company, and it has given him amazing opportunities for growth over the years.
“I started my career at DHL UK in 1985 as a customer service agent and spent 15 years with the company in the UK and then moved to the DHLExpress Asia Pacific region, where I spent the next eight years, first as a country manager of the Philippines and then Malaysia,” says Brewer.
In 2006, he was appointed as executive vice president, Commercial in the USA and in 2009 he became senior VP and GM, DHL USA.
“After my stint in the USA, I was offered the chance to head up our Express business in Sub-Saharan Africa, and I took up the role of managing director here in February 2011.
“It has been a phenomenal journey and I am incredibly grateful for my current role, looking after 54 countries and over 3 500 employees. I have been presented with so many opportunities and I’m grateful for the career path I’ve walked so far,” says Brewer.
Connecting Africa to the world
As for the state of the logistics industry in Africa, DHL’s Connectedness Index currently ranks Morocco as the top African country, in 38th place, out of 140 countries in terms of global connectedness.
South Africa is the highest ranked in sub-Saharan Africa and is in third place in Africa, just behind Mauritius (46th). But what exactly is this index. What does it indicate and how does it work? Is South Africa’s ranking good? What does the country have to do in order to go up in the rankings?
Brewer explains: “The Global Connectedness Index (GCI) looks at the state of globalisation around the world and ranks 140 countries on their global connectedness levels, based on international flows of trade, capital, information and people.
“South Africa currently ranks 48th worldwide in the GCI and the country has significantly higher breadth (39th worldwide) than depth (80th), which reflects the relatively limited proportion of its international flows that take place within its own region. Depth refers to how much of a given activity is international (rather than domestic). Breadth complements depth by looking at how broadly the international component of a given type of activity is distributed across countries,” says Brewer.
According to him, South Africa’s high ranking within the Sub-Saharan Africa region is positive for the country’s growth, as the levels of connectedness and prosperity are strongly linked.
“The benefits of expanding merchandise trade are much larger than traditional models indicate. Adding to that, the gains from services trade and other kinds of cross-border flows, the estimated economic benefits double to at least 8% of global GDP,” says Brewer.
“What is positive for the region,” he adds, “is that although Sub-Saharan Africa remains the least connected region, it averaged the largest connectedness increase from 2010 to 2011, and the five countries showing the largest increase in their scores – Mozambique, Togo, Ghana, Guinea and Zambia – are all located in the region. This improvement in rankings proves that South Africa, as well as Sub-Saharan Africa, is on the correct path when it comes to global trade and connectivity.”
The report also revealed that the migration of production and consumption of pharmaceuticals, passenger cars and mobile phones to emerging markets is also significantly positive for South Africa.
“It shows that the world’s shifting economic centre of gravity is reshaping industry connectedness, and that companies within these regions can adapt their strategies to benefit from the changing geography of production and consumption,” says Brewer.
Boosting trade and growth
Asked how South Africa can boost trade and economic growth, he says: “South Africa is also one of the most sophisticated, diverse and promising emerging markets globally. Strategically located at the tip of the African continent, South Africa is a key investment location and, both for the market opportunities within its borders and for the opportunity that exists to use the country as a gateway to the rest of the continent. It is a market of nearly one billion people and there is significant room for growth.
“However, there is still significant red tape and legislation which could be addressed in order for the country to truly realise its potential. Firstly, we need to make it easier to do business across borders in terms of customs and regulations, and possibly look at more attractive tax structures.
“The country is competing with countries globally, but also ones in Africa, like Mauritius, Nigeria and Egypt, which offer less complex regimes that are often more attractive. Mauritius, for example, has a free-trade zone, the Mauritius Freeport, which is a customs-free zone for goods destined for re-export. This allows them to promote the country as a logistics centre for Southern and East Africa, and the Indian Ocean islands,” says Brewer.
Improving the business environment
Asked if the South African government is doing enough with multinational companies regarding ways to improve SA’s business and customs environments, Brewer says:
“The government is undoubtedly working with the private sector to improve these environments, and we’ve recently enjoyed some strong collaboration, particularly in the Western Cape.
“However, I believe that there is still much to be done and we can enjoy even more co-operation and discussion, especially around how to make South Africa a more attractive destination for investment, making it easier to do business and retaining it’s status as the gateway into Africa”.
As for Africa as a whole, he says it is very difficult to make a “sweeping assessment” of the continent, since every country is so remarkably different.
“There are 54 countries on the continent, each with their own distinctive challenges,” says Brewer. “Whether we’re talking unique customs laws, a de minimus (threshold over which all goods are dutiable/ taxable), legislation around resources or staff – the legislative environment in Africa can be prohibitive. This impacts the ease of doing business for the transportation industry.
“However, there are countries (like Mauritius, as mentioned before) that are making great headway in terms of the ease of doing business, and other countries can emulate this example,” he says.
Africa, he adds, is still “remarkably hamstrung” by a lack of infrastructure. High inland transportation costs have had a major impact on global supply chains originating and ending in Africa and in this respect the region’s geography is partly to blame.
“There is a low ratio of roads per square kilometer and scattered populations, with long distances between urban areas.
“Furthermore, Africa has the highest number of landlocked countries of any continent,” Brewer told Leadership. This, coupled with poor road, rail and air infrastructure, as well as slow and inefficient borders, means, not surprisingly, that transportation costs are higher in Africa than in the other regions.
When it comes to South Africa’s customs environment, Brewer believes there is still major room for improvement. “However, South African customs have worked hard in the last few years to bring in new processes and digitise the system, and we applaud those moves and would like to encourage more.” In terms of African growth prospects, he believes there is still much opportunity for growth.
“So many multi-nationals are still not present in Africa and are actively looking for ways to infiltrate and access the African consumer market and South Africa is still an ideal entry point. You only need to look at recent developments in local trade, such as the opening of a R350 million hub in Atlantis, by technology company, Hisense, to see that global companies are looking at South Africa for local distribution,” Brewer says.
Corporate Social Responsibility (CSR), says Brewer, is part of the fabric of DHL, “particularly in Africa, where we have countless opportunities to make a difference in the communities we serve. We have so many activities across the various countries but ones that come to mind are Global Volunteer Day and World Environment Day, which take place across our entire network”.
For last year’s Global Volunteer Day, about 2 000 employees from 35 countries in Sub-Saharan Africa brought more than 30 projects to life.
Over the ten day period they planted trees, visited schools, hospitals and homes for the elderly, and donated blood and they plan to double this for this year’s Global Volunteer Day.
Blowing up a storm
“Our sponsorship of the DHL Stormers is key for our South African business, and not only provides us with amazing awareness, but also has significantly increased our business in the Western Cape and gives us a way to ‘open the door’ with new business.
“However, putting your logo on the front of the shirt is the easy part – its about activating the sponsorship, aligning it with our customers, providing a great experience for fans, and building on the awareness to really deliver value for us.
“It is difficult to quantify the value that we have received, but we know that the DHL Stormers is the first team in the history of South African rugby to achieve over 12% increase in spontaneous awareness in the first 18 months.
“Last year’s season, for example, resulted in more than R65 million in traditional media returns and we had nearly 15 million ‘opportunities to see’DHL mentioned with The Stormers online for the duration of the Super 15 season,” Brewer says.
Striving for greatness
Asked what he believes the top key qualities necessary for good leadership are, Brewer says: “There are many leaders among us and often it isn’t necessary to look further than your own workforce for a future leader.
"While recruiting the right people is important, it’s more critical that you continue to invest in human capital through training, mentorship and development.”
He says John D Rockefeller has a quote which really resonates with him: “Don’t be afraid to give up the good to go for the great”.
DHL has also supported Leadership’s annual Tomorrow’s Leaders Convention (TLC), which takes place again on 28 March next year.
The convention brings together and honours some of South Africa’s finest young talent – people who have already achieved significant success in their fields and who are destined to go to the top of the ladder in the near future.
“At DHL, we strive for ‘GREAT’ every day. And it is the pursuit of great (when good simply is not enough) that will not only set us apart, but will define a new generation of leaders, all focused on creating the best business and environments to work in.
“To create the next generation of leaders, we need to invest in people development and create opportunities for them to grow; sometimes pushing them further than they had thought possible.
“This is how we will all become GREAT,” Brewer concludes.