THE DEFINITIVE TRUCKING SITE

August 2007

Waiting, waiting and more waiting is a major inhibiting factor for almost every road transport operation. A visit to any container terminal, port, border gate or access road in and out of the Metropoles provides a clear picture of how much on the road time is lost every working day.

The ongoing national and other annual logistics surveys highlighting the cost of freight transport is generally perceived by government and private sector analysts to be expensive when expressed as a percentage of gross domestic product (GDP). According to these surveys the movement of freight in South Africa equates to more than 14% of GDP and is growing. Of the nearly R200 billion a year cost to the country, road freight transport accounts for more than 70 per cent.

When considering the cost of freight movements we need to define or describe ways in which we can understand and evaluate the performance or efficiency of road freight transport. For comparative purposes ton/kilometres (tons carried multiplied by kilometres travelled) is probably the most widely used measurement when measuring transport efficiency. The commodities transported can be expressed in the most meaningful measurement such as tons, litres, cubes, etc. Likewise, distance can be substituted with hours worked if it is more appropriate. For the purpose of this discussion, the examples are quoted in terms of mass - ton/kilometres.

When we talk about road freight transport we should be talking about trucks and how efficiently we use them. Trucks can only do two things: support a load and move a load. When trucks move on the road they produce ton/kilometres (ton/km). The more ton/km we produce the more efficient the transport, depending of course on how much of this production we take up. Consider a 10 ton payload transported 100 kilometres in two hours. The commodity produced by the truck is 1000 ton/km or 500 ton/km-hr. If the truck carries only 8 tons the production falls to 800 ton/km or 400 ton/km-hr. The potential ton/km not taken up is lost, gone forever. The factors influencing such losses are major contributors to the actual cost of road freight transport.

All modes of transport are demand driven. Transnet's chief executive officer, Maria Ramos says transport is at the centre of the national effort to generate and sustain higher levels of economic growth. Tito Mboweni, governor of the Reserve Bank tells us that trade as a percentage of GDP grew from 43% to 63% between 1994 and 2006. Right now, the construction industry is enjoying boom conditions not seen for two decades or more. 

Maria Ramos believes that the current cost of the country's freight transport and logistics is undermining our potential to gain competitive advantage for most, maybe even all players in the bulk and manufactured sectors. How then can we optimise our freight transport and logistics systems and thereby reduce the cost of doing business?
 

The current cost of the country’s freight transport and logistics is undermining our potential to gain competitive advantage  Maria Ramos

Coping with success
The ongoing growth in demand for fast moving consumer goods, the massive investments to upgrade the infrastructure and increased global investments that flow from the country's strong economic fundamentals presents the road transport industry with a daunting challenge to keep up with pressures for ever-faster, more frequent on time deliveries and bigger loads, all at lowest cost. Struggling to meet these challenges, fleet owners must face up to any number of challenges. These include:

Fuel
What we pay for fuel is the product of crude oil prices and the fortunes of the US$ - neither of which can be influenced by the South African government or any of the major oil companies. Every country in the world today is held to ransom by geo-politics and commodity speculators. Both of these drive the price of crude oil. All we can do is concentrate on how we may use this expensive element of transport costs more effectively.

Skills
There is a national shortage of trained, experienced truck drivers, particularly for large articulated rigs plying the national road network. No doubt HIV/AIDS has robbed the country of an untold number of good drivers. But, how much has the sector training authority (TETA) achieved in providing practical and accessible training interventions? Fleet owners also need to dedicate more money and devote more time towards in-house, on the job training.

Every year the shortage of diesel technicians becomes more acute. The huge increase in new vehicle sales goes on unabated, yet neither vehicle manufacturers nor organised transport (RFA and SABOA are examples) have mounted a consistent campaign to attract young people by promoting a career in these industries as being worthwhile, satisfying and rewarding. There is also a need to replace the many grey-haired, experienced transport and fleet managers that have already, or are about to retire.

Maintenance & Repair Facilities
Retail commercial vehicle dealers and their franchisors are being criticised for failing to provide sufficient work bays to accommodate the increased number of vehicles sold in recent years and the growing switch to maintenance contracts or full maintenance leases. Long delays in getting vehicles serviced on time, places stress on maintenance schedules resulting in otherwise avoidable breakdowns and tends to force fleet owners into operating more vehicles than they need.
 

Long delays in getting vehicles serviced, insufficient workbays - all place stress on maintenance schedules

Perceptions & Communications
Public and government perception of the road freight industry is usually negative and misinformed. The general public tends to view trucks as an unnecessary nuisance on the, road, this especially when they try to force the truck driver over the yellow line. Little thought is given to the fact that trucks haul or deliver close to 90 per cent of what we eat and need every day. Government at all levels lacks a proper understanding of road transport. This is evident in the lack of will to resolve legislation issues that have been outstanding for a decade or more and the tendency to support the notion that a forced modal switch to the rail would reduce freight logistics costs.

At the heart of the poor perceptions lies a lack of communication between organised transport, various government departments and civil society at large. The American Trucking Associations, the British Road Haulage Association and the Freight Transport Association are good examples of how comprehensive representation facilitates a positive relationship between all stakeholders and role players.

Growth in Ton/Km
Researchers at Stellenbosch University predict a rapid growth in annual ton/km from 700 million a month to 1, 4 billion a month by 2014. Other research by Transnet suggests freight movements of 50 tons million a year by 2009 - that's nearly a million tons a month. This begs questions like (1) does the country have enough trucks to meet the challenge? (2) Are we using the trucks we have effectively? 

The hypothetical model that follows provides a basis on which to reflect typical levels of road transport efficiency in 2007.

Operating Scenario
The model envisages a seven-axle flat-deck inter-link plying between major centres on national highways. There are two scenarios as detailed in Table 1.

Table 2 shows the increase in transport efficiencies for the two scenarios. Note the large decrease in fixed cost recovery. Fixed cost recovery is always a problem for fleet owners when vehicles cannot be economically operated. The comparison highlights how small improvements in payload and average speed result in significant efficiency gains. Note the improved use of fuel when expressed in ton/km per litre.

The average ton/km cost of operating a 56-ton gross seven-axle inter-link in July 2007 was 23.21 cents. A 27.45% improvement in efficiency reflects a significant reduction to 16.83 cents a ton/km. Considering the number of six- and seven-axle rigs on the road at any time suggests even such modest efficiency improvements holds huge potential for reducing road transport's share of the national freight logistic costs. Pitseng Resources, a consultancy briefed by Transnet estimates that 3000 trucks ply between Durban and Johannesburg everyday.

What impedes road transport efficiency?
Waiting, waiting and more waiting is a major inhibiting factor for almost every road transport operation. A visit to any container terminal, port, border gate or access road in and out of the Metropoles provides a clear picture of how much on the road time with wheels turning is lost every working day. The Barloworld Logistics survey for 2007 reveals the average waiting time to unload at the large retailers is now up to four hours, a shocking and totally unacceptable state of affairs. Add to this the pressure retailers are putting on FMCG manufacturers and their contractors to deliver faster and more frequently in a bid to stave off stock-outs. Bigger vehicles have been demanded with the objective of reducing the number of deliveries per day, however, larger loads have not necessarily materialised. There is not a lot road transport operators and fleet owners can do to overcome this. What then can be done to improve road freight transport efficiencies on a national basis?

Improving road Freight Transport
For years South Africa has battled with congestion at its ports, especially the Durban port. Is there not a case for inland bond ports? This was discussed as far back as the mid-1990s when the national transportation policy was reviewed. Inland ports located in Gauteng and Limpopo would dramatically reduce congestion at the Durban port, it would take a few thousand trucks off the N3 and provide the basis for road transport to uplift the containers and other goods and deliver them to the final destinations. An inland port located in Limpopo would handle the goods in transit to the land-locked neighbouring states. The National Land Freight Strategic Framework and other working groups are discussing projects of this nature as well as the potential for transport corridors. 

Scheduled, dedicated freight trains between major cities (Johannesburg, Durban and Cape Town) where Spoornet provides the prime-movers, rolling stock and the line while road freight transport would provide the vehicles to bring and take the goods from the rail. This would be an elegant example of inter-modal co-operation that optimises modal strength. This option was discussed with Spoornet nearly 20 years ago, a time when the rail operator had a narrow mindset in terms of who "owns" the customer.

Dedicated routes offer opportunities to optimise road freight transport efficiency. The objective permits suitable vehicles to operate exclusively on appropriate routes at maximum gross combination mass. Depending on the route and vehicles this could achieve payloads of approximately 55 to 60 tons.

What can road freight do to improve transport efficiency?
If road freight transport is to become permanently more efficient it would require operators and fleet owners to take self-regulation seriously. Too many large fleet owners are operating by the seat of their pants. Those that have grown beyond their ability to properly control the daily operation of their fleets would have fewer problems and make better profits if road traffic regulations were consistently and predictably enforced. When the law enforcement agencies get down to regular roadside roadworthy inspections and making house calls on habitual offenders they will be surprised to find how many fleets operate with an untrained proxy or no proxy at all, expired operator cards, outdated CRWs, bald tyres, cracked windscreens, defective brakes and a host of other non-compliance factors. Fleets under pressure are failing to select drivers carefully or give them any basic training. Maintenance schedules are side-lined to maintain vehicle availability that in many cases is being negatively impacted by accidents and incidents and keeping too many vehicles off the road for long periods.

There is a national shortage of trained, experienced truck drivers, particularly for large articulated rigs plying the national road network.

Fundamental to improving road freight transport efficiency is the urgent need to fast-track up-skilling and training of drivers, technicians and management. The industry needs to establish a broad-based lobby to gain a voice that government at all levels listens to. If the problems are to be solved they must be tackled now, not later on. It is essential that planning horizons be beyond 2010. The country's so called third-world infrastructure is the result of growth beyond what anyone anticipated or expected. Look at the facts: nearly two million new jobs, an emerging middle-class with buying power, two million new vehicles on our roads in little more than the past two years. Strong economic fundamental, super-efficient tax collections, responsible money management - in plain language, South Africa has out grown itself. Hopefully we won't perpetuate the old South African tendency to under-estimate ourselves. This time we must take bold decisions and think beyond when the whistle blows on the final game in the world soccer cup 2007.