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Past Issues

November 2001

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TransportSecurity

LAX
SECURITY
threatens
EASTERN CAPE
transporters

The Eastern Cape is South Africa's largest province. However, do not mistake its physical size as an accurate reflection of the state of the province. The metropolitan economies of Port Elizabeth and East London are based primarily on motor manufacturing and while in this arena there are some great success stories to be told, the rest is hardly uplifting. For truckers, operating in this province is a nightmare - and this especially at night when hijackers and robbers come out in full force. If the province wants to keep its truckers, it better do something about safeguarding the trucks writes our CapEcorrespondent Stephanie Platt.

According to local government, the Eastern Cape has been earmarked as a priority for growth and economic development. The province presently contributes approximately R30-billion to the national GDP and is the poorest province in terms of average monthly expenditure.

With two harbours and three airports offering flights to main centres, the population of 6,3 million is unevenly spread with less than three persons per square kilometre in the Karoo and up to 99 persons per square kilometre in high density rural areas in the former homelands of Ciskei and Transkei.

It is the latter area that presents one of the most serious threats to road transport. No operator in his right mind will send a vehicle through the Transkei after dark. Drivers are hijacked and attacked, or tarpaulins are cut open and vehicles offloaded while driving.

Ronnie Goosen, a director of the Kempston Group and manager of Haulgoods, Kempston's brokerage division, is based in Port Elizabeth and explains: "Any truck leaving after 10pm will most definitely lose part of its load." 

Serious security problem
When security companies have to be contracted to escort vehicles through a province as a matter of course, there is a serious security problem. This is the overall complaint from every transport company, from vehicle hire to courier to heavy haulage.

Intertown Parcel Delivery Services puts two drivers on every vehicle. The vehicles also have reliable communications and are fitted with satellite tracking. In spite of all of this, they also only travel that route during daylight hours.

As far as rented commercial vehicles are concerned, Debra Bouwer, manager of Kempston Truck Hire East London, says their problems come in spells. There will be a spate of incidents and then things quieten down for a time.

"Vehicles with decals are particularly vulnerable as criminals realise the vehicle is not being driven by an owner-driver. Our vehicles are therefore regarded as easy picking," she says.

Unitrans is in a position where, because it is delivering to chain stores, its vehicles only travel during the day. They do still have incidents though says Malcolm Glennie, project manager for the company. "We've had problems but these occur mostly while in the process of offloading." 

Companies like MCK Transport and Haulgoods have contracts with security companies to escort vehicles where necessary. As Goosen explains: "A truck can't load in Durban, leave and get through to East London before nightfall. We have to arrange an escort for the vehicle to Umtata where it stays overnight and will then travel through the following day."

Companies pulling out
The consequence of all this is that such conditions are contributing to forcing independent transport companies to pull out of the region.

Mornay Delport of MCK Transport is one of the few remaining independent transport operators left in Port Elizabeth and has moved all his vehicles to Durban or Gauteng. Only maintenance is done from the home base, where vehicles are brought back every two weeks. While security - or the lack of it - is a factor, there are other reasons he says.

"You can't work out of Port Elizabeth as the rates in this province are just too low. In addition, our operating costs are higher." Given this, Delport reckons he will probably soon consider relocating his entire operation - including workshops.

But why are the costs higher than elsewhere? Delport explains: "You can't compare the Transkei with any other region when looking at inter-city transport. That route is harder on tyres, drivers and fuel consumption. There is also a very poor support structure and if you have a breakdown - well then you can kiss your load goodbye!"

Due to the condition of roads in the Eastern Cape, companies like Intertown Transport - which delivers throughout the region - are forced to have wheel alignment corrections on their entire fleet on a monthly basis. This is a huge added expense.

Imbalance of freight movement
Also, similar to Cape Town, both Port Elizabeth and East London have an imbalance of freight movement. The ratio of inbound to outbound goods is 3:1. This means that, in theory, two out of every three trucks leave the region empty. Companies in the region would rather work overtime to load vehicles where Gauteng based transport companies will give them a better rate to get their vehicles away earlier.

The composition of loads out of the region has also changed. "Three to five years ago there were many more full loads leaving the Eastern Cape. Now there is more consolidation and break-bulk has become the order of the day," says Goosen. "This is in line with the trend by companies not to hold stock. However, this lower tonnage has a time-factor influence as well as an increased transport cost to the operator who now does multiple stops."

These increased costs have not prevented small business from attempting to compete, particularly in the parcel delivery arena. According to Grant Tomlinson, who runs Intertown Transport: "If you have a car or a bakkie and a waybill, you can call yourself a courier".

Tomlinson has collected 400 waybills from different courier companies operating in the Eastern Cape over the past few months. The so-called couriers do not all have offices but have some type of agent or satellite branch. Many of them will take a parcel, irrespective of where it is to be delivered and pass it on to the next courier operator in the hope of making something on the delivery.

This has led to serious rate cutting and has resulted in small towns not carrying stock but becoming totally reliant on transporters delivering when they need. "This sort of practise has crippled the Eastern Cape and has been one of the largest contributing factors to the failure of many small companies," says Tomlinson.

The general public have also learnt to use the courier companies and will rather buy something in Port Elizabeth and pay the courier charges to whichever town they live in. "It has got so bad that people will go grocery shopping for someone they know in the country, pack the goods in a box and send it by courier," he adds.

Number of positives 
There are a number of positives though, one of these demonstrated by the substantial investments in the East London area over the past 12 months by Tony Cotterell, chairman of the Kempston Group.

Cotterell, widely regarded as one of the leading businessmen in the area, has been on a property buying spree snapping up, according to a feature in the Daily Despatch of August 8, 2001, properties such as the Becketts building on the West Bank. This had been home to National Brands for many years and will now be used by the commercial division of Ronnies Motors and as a service centre for DaimlerChrysler staff vehicles.

 

He also purchased the former Amatola Sun building in Bisho, resulting in a property portfolio which, according to his brother Paul Cotterell, totals in excess of R100-million.

The group's pioneer company, Kempston Truck Hire, is by far the most dominant truck hire company in the province. Bouwer estimates that they enjoy a 70% market share. In Port Elizabeth, their presence is almost as strong, although there have been attempts by other national truck hire companies to establish business there.

Putting aside the negatives, on the contractual side, Unitrans' Glennie believes there is potential in the region. "We picked up two contracts that have been running for the past year without doing extensive marketing and we certainly intend to become more active in this area in the future."

He sees more opportunity in Port Elizabeth than in East London and explains: "Unitrans has a number of divisions and although I speak for the general freight division, we have other substantial contracts in our fuel and chemical division that run in Port Elizabeth."

From the Haulgoods perspective, Goosen says that with the rationalisation by major transport companies - as well as liquidations - the region has seen a marked drop in the number of vehicles.

"Trucks have become scarce and at last we are able to improve our rates, although it is a painful exercise." A huge disparity exists though, where transport companies still earn 50% more on goods coming into the province than out of it.

Economic development 
Goosen is also involved with a task team in Port Elizabeth set to boost economic development. There are a number of factors that can play a positive role.

"The Koega Development will definitely have an impact, as it will be a deep harbour. The benefits of this will only be seen in about three years though. In the meantime, we are working toward making the Port Elizabeth harbour more productive. It is completely underutilised and yet we are able to deliver goods to Gauteng from the harbour in a shorter time than Durban can. This is mainly because Durban is congested and we would like to take this overflow."

Although business appears to be putting in as much effort as possible toward making the area economically viable, the government doesn't appear to be placing any emphasis on the serious issues such as safety and security that dogs the transport industry.

In a policy speech made in February this year by Dennis Neer, MEC for Provincial Safety, Liaison and Transport, no mention was made of the theft and hijacking problems, let alone any measures intended to counteract them. Full emphasis seems to be geared toward public transport, eliminating taxi problems, aviation and the collection of outstanding license fees.

This is foolish in the extreme and Neer needs to be told that for any form of economic development, trucks are essential. If crime is killing that industry, then he needs to do something about it. Let the province ignore this at its peril.

New look for  Kempston Truck Hire  Kempston Truck Hire has become more noticeable on roads throughout the country, the result of refurbishing its entire fleet. Predominantly a cheerful yellow with a modern design, the change cost the company a substantial amount of money and has taken over 18 months to complete. Kempston director Carolyn Clokie says they embarked on the project to modernise the fleet some time ago. "It was a long time in the planning stage but we are now seeing the results." Feedback from customers has been positive. One client said: "We deliver quality goods and with the trucks looking clean and in good condition, it means our product is also being delivered in a quality package."  From a marketing perspective, the company has certainly raised its noise level and this certainly makes a change from some other rental companies whose idea of a revamp is simply to move the stripes elsewhere on their trucks.