In logistics industry, just one infection is one too many
● One of SA’s largest logistics companies, JSE-listed Imperial Logistics, says its major focus currently is to protect the 7,000 staff in its local essential-services business from contracting Covid-19 as they distribute critical pharmaceutical and food supplies around the country.
The stakes are high because a positive Covid-19 test would not only have a devastating impact on the employee concerned, their family and community, but could also force a warehouse facility to close, which would disrupt supply chains.
“Our biggest focus at this time across the business is to protect our people from getting the virus and also ensuring that our operations are running as smoothly as possible,” says CEO Mohammed Akoojee.
“So far so good, we are executing on our commitments to our clients and our commitment to the country.”
The company, which also operates in the rest of Africa, Europe and the UK, has had no Covid-19 cases in its South African operations at this stage. About one-third of the group’s operating profit is generated in SA.
The group, which has about 13,000 employees in SA, has a wide range of clients in the pharmaceutical, food production and retail sectors including GSK, Aspen Pharmacare, Tiger Brands and Woolworths. In the health-care sector alone, it supplies products to about 5,000 retail pharmacies across SA.
Akoojee says that while the company operates in 32 countries — with the impact of the global coronavirus pandemic different in each market — in SA 55% of its revenue is generated in the consumer goods, healthcare and other essential products and services sectors.
“It’s a big responsibility to have. We have to make sure that our trucks are delivering consumer goods and our vehicles are delivering pharmaceutical products. If this was stopped it would have a major impact on our country and people’s daily lives.
“I would say our biggest challenge is people. We can’t afford for our people to get sick, and how we manage that is very important in terms of the stringent measures we have in place to protect our people.”
Imperial Logistics, which is paying all its employees during the lockdown whether or not they are in essential services, said it is a big task keeping staff motivated and “ensuring you don’t have major Covid-19 outbreaks in your key warehouses”.
Akoojee says the company has also put in place measures to make sure it has flexibility when it comes to staffing. “We do call on temp staff as a back-up measure.”
He says all Imperial’s truck drivers are working, even those not operating in essential services.
“We’ve kept them [non-essential service truck drivers] working so we can share the load among the truck drivers, because your biggest challenge is that if you have too many people exposed to the virus you can get big parts of your workforce sick, so you have to schedule it correctly.”
Akojee says another key aspect is adjusting shifts so that employees are not overworked or overexposed.
“So in certain operations where demand is very high, particularly on the pharmaceutical side, you have to increase shifts to allow people to be able to cope with increased volumes,” he said.
“We have a very high attendance rate in our workforce, it’s virtually at 100%, so we are not having a problem getting our people to the operations.”
A big help for the group is that it has a hygiene and cleaning services subsidiary, providing easy access to protective personal equipment, sanitisers and other health measures required to minimise infections.
“We were quickly able to deploy that in all our major operations, which was a benefit for us,” Akoojee says. “We have also taken on the responsibility to ensure we arrange relevant and suitable transport safely to and from operations for those who require it.”
As far as volumes are concerned, Akoojee says the busiest sector is health care. “Our warehousing and distribution business and our wholesale business in pharmaceuticals, that is very busy.”
Also busy is Imperial’s business that services fast-moving consumer goods clients such as GSK, Tiger Brands and Woolworths, and “those volumes are up”.
Imperial is also a major fuel transporter and while volumes in this sector are “OK” they are not as strong as the health-care and consumer goods sectors.
The group is helping the government and donor organisations get more mobile clinics on the road by procuring and distributing personal protective equipment for them.
The Imperial group this week withdrew the guidance for earnings it issued in February, saying in a trading update that this was prudent given the increasing market uncertainty and volatility.
The company says it has adequate headroom in terms of debt covenants and liquidity. Stringent, proactive measures have been implemented to manage costs and optimise working capital and capital expenditure, and it is focusing on strong cash-flow generation.
Other companies are also reporting a much busier period.
Vikash Singh, MD of United Pharmaceutical Distributors (UPD), a division of Clicks, says the company experienced “unprecedented” demand ahead of the lockdown.
“Volumes have now normalised, [but] we are still seeing fair demand,” he says, paying tribute to UPD’s “dedicated, loyal and passionate employees”.
“Our automation has also enabled us in dealing with the larger volumes, and we have extended operating hours.”