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Container project yields cost savings and a greener supply chain for tobacco firm
Issued by: Imperial Logistics  
[Johannesburg, 24 April 2014]

Imperial Logistics container project

Imperial Logistics container project

Cost savings and a greener supply chain are just some of the benefits that have been achieved by British American Tobacco South Africa (BATSA) as a result of a "container triangulation" initiative implemented in partnership with Imperial Logistics group company Imperial Cargo Solutions.

Container triangulation is the process of converting import containers to export containers, explains Etienne du Plessis, general manager at Imperial Cargo Solutions, and it is through this process that BATSA has reduced the high logistics costs in its inbound supply chain.

Outlining the industry's logistics challenges, Du Plessis notes that the manufacturing of cigarettes and other tobacco related products in South Africa requires numerous materials, including raw tobacco, filters, wrapping and packaging materials.

"Many of these elements are sourced and imported from around the globe. The final tobacco products are then exported from SA to various end markets. The import of the different elements required by BATSA, and the export of its final tobacco products, is undertaken by shipping lines, with the Durban port primarily used as the point of entry and exit. The high logistics costs involved in the inbound supply chain include shipping line charges; road transport of containers from Durban to BATSA's facility in Heidelberg; road transport of empty containers to the shipping line container facility in City Deep; and empty container return fees. In addition, should a container be returned later than the agreed time, demurrage charges would be applied."

Together, Imperial Logistics and BATSA investigated ways to reduce the total cost and environmental impact of logistics in BATSA's supply chain, and an obvious solution was container triangulation.

BATSA enjoyed immediate cost savings after this project commenced. Du Plessis elaborates: "Over a one year period, a total of 324 containers have been triangulated, which has resulted in significant cost savings to BATSA. The triangulation process is ongoing, and with the business having on average 1 600 imported containers and 1 800 exported containers per annum, it is evident that only a small portion of the potential savings have been captured during the first year of operations."

In addition to financial gains, BATSA is also reaping operational benefits. "The company now has the ability to execute urgent order requests from end markets, since there is a ‘pool' of available containers. BATSA's export OTIF (on-time in-full) compliance has also been boosted, and there is less risk of containers not being available during peak periods," he reports. "Forty foot containers are generally in very high demand in the Gauteng area, and availability could not always be assured in the past."

A key benefit from an environmental point of view is that substantially less distances are travelled to collect or return empty containers. "During the first year of container triangulation, heavy vehicle travelling distance has been cut by approximately 45 000km," states Du Plessis.

"By implementing this solution, BATSA has also been able to minimise the risk of incurring demurrage costs for the late returns of empty containers," he concludes.


Imperial Logistics

With extensive operations throughout Europe and Africa, Imperial Logistics is uniquely placed to partner companies in leveraging the value inherent in their supply chains. By positioning itself as an extension of a clients' business – building its clients' brands alongside its own – the company is a co-collaborator in unlocking the competitive advantage contained in complex and dynamic logistics environments. Imperial Logistics' own differentiators lie in a combination of an extensive resource base of transportation, warehousing and distribution operations and best-of-breed integrative process and technology solutions. The company applies its pre-eminent supply chain management skills to manage operational processes across end-to-end value chains on behalf of its clients. As a multi-branded business, it is in a position to optimise the benefits, scale and synergies that are derived from large businesses, while retaining agility, customer focus and an entrepreneurial flair that characterises smaller businesses. The company recognises that its clients' requirements are unique and customises its service offerings accordingly, while leveraging its experience to benefit each client. For more information, please visit www.imperiallogistics.co.za

Imperial Cargo Solutions

Imperial Cargo Solutions, a third party logistics service provider (3PL) operates within the Imperial Logistics Transport and Warehousing division. The company specialises in warehousing management and general warehousing; local, line haul and contract distribution; specialised warehousing and distribution; and supply chain management. Through its versatile fleet, Imperial Cargo Solutions is able to fulfill individual transportation needs, with depots located in Alberton, Clayville, Cape Town, Durban, East London, Port Elizabeth, Pretoria, Sasolburg and Wadeville. For more information, please visit www.imperialcargosolutions.co.za

Editorial contacts
Imperial Logistics
Marelize Hoffman
(+27) 11 677 5000

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