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Road freight transport and logistics codes issued for comment in South Africa 07 March 2016

2016 scorecard could be issued on amended codes

Draft sector codes for the road freight transport and logistics industry were issued for comment on the 26th of February, with a 60-day window provided for public commentary. Proposed changes include amendments to allocated weightings in three of the scorecard sub-elements, equity ownership, management control and skills development, and reflect the proposals tabled in ongoing industry discussions with the Department of Transport.

For transport industry players this effectively means that the 2016 scorecard could be issued on these amended codes should they be approved and they would need to align their measurement criteria accordingly.

Imperial has stated that it is exceptionally well placed to rise to the challenges of the new codes. The Group’s BEE roadmap gives a clear indication that Imperial Logistics will achieve a competitive recognition level under the new codes and it is anticipated that they will achieve a Level 5 status in 2016. It is likewise anticipated that Level 4 status will be achieved in 2017, with the group actively targeting Level 3 status by 2020. In order to avoid being discounted a level, the first challenge under the new codes will be to ensure that the sub-minimums for net value, skills development and preferential procurement are met.

In terms of net value, Imperial Logistics is leading the industry again with recognition of full points; which means that more than 25.0% equity ownership is fully vested in the hands of black shareholders. Not many logistics service providers, or even many other South African companies, can claim this level and scale of ownership transformation.

However, the complexity and scale of Imperial’s business means that the Group will have to work harder to achieve minimums for skills development and preferential procurement which will not be achieved overnight.

It is also currently boosting clients’ preferential procurement through numerous enterprise development programmes, to help clients benefit from an enterprise development perspective, applying its logistics and supply chain experience to identifying, mentoring and upskilling enterprise development partners to work directly with clients. Imperial is thus working to develop a pipeline of QSE and EME suppliers, actively seeking out businesses to collaborate with, and offering guidance and training to them.