South African small-to-medium enterprises are operating under constant pressure as rising fuel costs and low margins expose inefficiencies in logistics systems that drive up operating expenses and reduce supply chain reliability.
Nelson Teixeira, managing director of Sub-Saharan Africa operations at FedEx, explains: “The logistics sector is in a state of constant evolution, driven by factors such as market access, supply and demand and customer expectations. The past few years have highlighted various focus areas including speed, reliability and visibility.
Logistics operators must focus on delivering a consistently high standard of service while maximizing revenues and minimizing costs to gain and maintain market share over time. In the SME sector, striking this balance is a make or break factor.
System inefficiencies disproportionately impact SMEs
In South Africa's citrus export sector, the Citrus Growers Association reported that logistics inefficiencies cost businesses more than R1.6bn a year. Costs included additional labor, extended cold storage beyond the contracted period, and higher transportation expenses associated with port delays.
For SMEs, similar disruptions have a greater impact due to limited cash flow, narrow margins and low operating buffers. While larger companies can afford such costs, smaller businesses often cannot.
South Africa's high SME failure rates reflect this vulnerability, with many businesses not surviving more than five years, limiting the ability to recover from frequent supply chain disruptions.
delivery performance
Delivery issues remain among the most common complaints filed by the Consumer Goods and Services Ombudsman.
Over 20% of online shoppers say they will not return to a retailer after late delivery and may discourage others from purchasing from the same business, putting direct pressure on fulfillment performance.
logistics technology
For SMEs, consistent delivery performance has shifted from a competitive advantage to a fundamental expectation.
Logistics technology is increasingly being used to improve efficiency through route optimization, predictive planning, and better visibility into supply chains.
FedEx is one of the global logistics operators investing in digital transformation to improve tracking, coordination and operational efficiency in shipments. Similar approaches across the sector are enabling businesses to reduce delays, improve accuracy and respond faster to disruptions.
These systems allow businesses to identify problems earlier in the delivery cycle, manage exceptions more effectively, and maintain communication with customers while in transit.
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