South Africa saw an increase of 6,9% in logistics costs to R339-billion in 2008, compared with the previous year's R317-billion, and 2004's R213-billion.

This is according to the sixth State of Logistics survey, as published by the Council for Scientific and Industrial Research (CSIR), Imperial Logistics and Stellenbosch University on Tuesday.

Despite the increase, 2008 costs were at their lowest as a percentage of gross domestic product (GDP) since the survey was first introduced in 2004, totaling 14,7% of GDP, down from last year's 15,9%.

However, when compared with other countries' logistics costs, such as the US' 9,4% of GDP, domestic costs remained high, said Stellenbosch University Centre for Supply Chain Management director Dr Jan Havenga.

He added that the improvement in terms of GDP might appear positive at first glance, but that it did not mean all was well in the local logistics sector.

The 2008 gains were made on the back of improved efficiencies when the fuel price rose dramatically, such as road transport companies ensuring they made less empty runs, as well as a subsequent drop in the fuel price when the recession kicked in.

However, said Havenga, growing efficiency could only improve the picture up to a point, when deeply-rooted structural inefficiencies would again come to the fore, which meant the cost turnaround was unlikely to be sustainable.

Havenga said that the country required more transport to keep the economy going than the rest of the world. One reason for this was that the economic centre is located deep inland, 600 km from the nearest port.

This meant that a jump in the fuel price, undoubtedly to follow soon after the receding recession, would have a far higher cost impact on South African logistics costs than the rest of the world.

Transport made up 50% of logistics costs in South Africa.

The survey indicated that the South African transport model remained heavily weighted towards road transport and, therefore, vulnerable to fuel price increases.

Road transported 1,4-billion tons of freight over an average distance of 185 km in 2008. Rail transported 204-million tons at an average transport distance of 640 km.

"Although consensus exists around issues such as [the] . . . use of rail capacity, not enough has been done yet. The competitiveness and sustainability of South Africa's logistics system remain at risk and moving from consensus to action is long overdue. Public-private partnerships is a key success factor," said Havenga.

The survey also showed that the percentage of bad roads in South Africa's secondary road network increased from 8% (1998) to 20% (2008), with significant deliveries routed via this road network.

The percentage of bad national roads increased from 7% to 9% over the same period, said CSIR Built Environment executive director Hans Ittmann.