France-based logistics company ID Logistics hopes to double the size of its business in South Africa by 2020, in terms of revenue and number of contracts and customers, says ID Logistics South Africa (SA) MD Etienne Juillard.

The company opened its doors in South Africa in 2012, with a contract from dairy products company Danone, with revenue of around R130-million.

The investment to start up the local business reached between R600-million and R700-million.

By 2015, ID Logistics had seen its revenue grow to R410-million, expanding to R520-million in 2016.

“We want to be one of the leading contract logistics companies in South Africa and the most innovative one,” says Juillard.

“South Africa is one of the key markets for ID Logistics. It has a high development potential.”

ID Logistics employs 150 people directly in South Africa. The business has five local warehouses, 180 trucks, ten cross docks, 38 000 m2 of warehouse space and 3 500 delivery points.

It is currently the number two logistics provider in the local perishable goods distribution market.

However, the South African business is not yet profitable, notes ID Logistics CEO and founder Eric Hemar. He says it takes between six and seven years for an ID Logistics business outside France to mature to profitability.

He says ID Logistics came to South Africa on the back of a request by Danone, also a French company, to manage its logistics in the country.

“We accompany our major clients in their roll-out worldwide.”

ID Logistics SA currently has 19 companies as clients.

“We have a lot of momentum,” says Juillard.

He adds that the company is investigating the introduction of a number of new technologies in South Africa over the next 16 to 18 months.

These include in-transport double-decking solutions of perishables; route optimisation software; voice picking technology; arm-mounted scanning devices, as opposed to scanning guns; flexi-reach forklifts where the forks can turn 180˚; in-truck live navigation systems; and live delivery status updates.

E-Commerce Trend
Hemar says ID Logistics’ biggest share of global revenue is generated in the retail sector at 42%, followed by fast-moving consumer goods (FMCG) at 22%, high-tech at 9% and fashion at 6%.

E-commerce (9%), requiring a high level of expensive automation, is expected to grow to more than 20% of revenue in five years.

“Fifty per cent of the tenders we receive are for e-commerce.

“This is not yet the case in South Africa, but it will grow,” says Hemar.

He also believes that ID Logistics will be able to capture customers in South Africa in the sectors where it is not yet active but has global know-how, such as fashion and cosmetics logistics.

“Our challenge is now to continue to build on the perishable platform, extend our warehouse facilities and convince clients in other sectors, such as retail and FMCG, where centralisation and in-sourcing is prevalent, to outsource these services and enjoy the benefits of faster turnaround times, cost savings, global quality standards and innovation,” notes Juillard.