Set up your own business rescue plan

With the collapse of state services and infrastructure, it’s crucial you protect your enterprise. By Peter Hughes.

The import-export service and logistics crisis is man-made. So is the solution. Don’t leave it to others, do what you can to protect your business.

“Made it. I’m on the motorway to Cardiff. Its nine degrees, raining cats and dogs and the traffic’s almost as bad as the trucks on your N4!”

This was the message from a Welsh friend after spending a week with us recently. The weather in the Lowveld had been glorious and we’d seen the full range of beautiful wild life in the Kruger National Park. Prior to visiting us he’d been golfing in the Western Cape, and could not say enough about the beauty and high standards.

PROBLEMS CREATED HERE

We have some serious man-made problems in this country but how happy I am to be living on this southern tip of Africa, far from the traffic, human congestion, bitter cold and wars in the so-called developed world north of us.

The euphoria I felt in response to my friends marvelling the beauty of our country wavered when we met the hundreds of trucks clogging the N4 roadside attempting to cross the Komatipoort border to Maputo.

Once home, and catching up with the headlines, it seems we are facing the most serious problem since the ANC government came into power. The collapse of crucial state services and infrastructure, including border posts, roads, railways and ports, carries with it the seeds of massive economic hardship for us all.

We faced other periods in our history with similar challenges: the Great Depression of the 1930s and World War II. There was a terrific slump in world trade; demand for South African agricultural and mineral exports fell drastically and many businesses collapsed, putting thousands of people out of jobs. World trade was just recovering when Germany invaded Poland, triggering adeclaration of war from Britain.

Some 200 000 South Africans volunteered for military service, many of them managers, technicians and skilled employees in key jobs. Not only did they leave their families facing dire financial straits, they left behind workplaces staffed with less capable people.

There were however a few positives: for example, demand for platinum, uranium and steel surged for the manufacture of weapons, and a vastly increased number of ships called at Cape Town and Durban, sending many businesses into overdrive.

On the flip side, cargo ships that had been converted to troop carriers and hospital ships led to a sharp reduction in exports and imports. Troops however had to be fed, but prices were low and large volumes of perishables sent to harbours in the hope of catching a British supply ship rotted on the quayside.

Perishable goods producers suffered serious financial losses, with semi- or non-perishable goods faring much better. Producers were forced to the local markets, which proved to be more resilient and lucrative than expected. Prior to the war, some

10% of agricultural perishables were sold locally. This increased to close to 50% during the war years.

Our present problems may pale into insignificance in comparison, but in the post-war era we have never had anything like this to deal with before. Organisations such as the Road Freight Association, the South African Freight Forwarding Association and Business Unity South Africa have been warning government for years of this impending collapse, but it fell on deaf ears. At last government does seem to be waking up to the risks.

A National Logistics Crisis Committee comprising state and private-sector representatives has been formed and is working on the problem. How effective it will be remains to be seen.

It is crucial that you do as much as you are able to to protect your business. Here are a few ideas:

TALK TO SUPPLIERS OF PRODUCTS DEPENDENT ON IMPORTS, AND GET TO THE FRONT OF THE QUEUE

SHORT TERM

Brief staff about the crisis and keep them informed.

Talk to suppliers of critical products dependent on imports, and get to the front of the queue.

Set up strategies now to prepare your established local markets to take greater volumes.

Galvanise your industry organisation to get involved; secure preference for imports and exports affecting food production; inform consumers of the risks to food supplies.

Investigate alternative import-export channels: airfreight, alternative ports?

LONG TERM

Diversify! Identify a product for supply into the local market. Total dependence on exports is a high-risk enterprise.