Road Freight Transport is important for South Africa, the region
and global trading partners. What drives or inhibits this vital
industry’s productivity? By Max Braun Nearly 90%
Road Freight Transport is important for South Africa, the region and global trading partners. What drives or inhibits this vital industry’s productivity?
By Max Braun
Nearly 90%of all freight logistics in South Africa is transported by road. According to the latest state of freight logistics survey compiled by the CSIR and co-sponsored by the Imperial Group (2007) road transport hauled 1,37 billion tons compared to 205 million tons transported by rail.
The availability, reliability and flexibility of road transport have huge potential for public private partnerships. SMME transporters and a growing number of new BEE entrants we can anticipate now that the Road Freight Industry Charter, that has been languishing on the back-burner, has been signed off by the DTI.
A vigorous road transport industry can play an important role in the emerging Corridor concepts in terms of ensuring modal optimization and providing better solutions where low density, seasonal rail branch lines exist. The ongoing absence of a freight rail mode continues to place too much reliance on road to haul bulk commodities not suited to cost-effective road transport and has a negative impact on exports and imports. Based on recent surveys the cost of freight logistics stands at almost 16% of the GDP, widely deemed to be too expensive and unsustainable. This is a matter of major concern for government, business, agriculture and the road transport industry.
There are, however, many factors inhibiting the efficiency of road transport - some of which can be controlled by the industry and some that cannot. Let’s explore some of these factors:
Traffic congestion on corridors and metro roads cause expensive delays costing the industry millions of rands in unrecoverable standing costs and a massive waste of fuel just waiting for vehicles to be unloaded. There are several researched documents that reveal the average waiting time to be unloaded at retail and other receiving points is now approximately 4 hours.
The congestion and delays at our ports and border gates are well known as are the problems facing commercial farmers who struggle to find economical ways of getting their produce to silos, mills and ports. This is totally unacceptable and unfair to operators that are rarely compensated for the costs incurred.
Unquestionably there is damage to roads due to overloading but there is also the lack of timely and proper maintenance and repair of roads. The latest CSIR Logistics Survey (available for download free of charge on the CSIR website) refers to a short case study that indicates trucks operating on questionable roads suffered increased operating costs of between 684% and 1560% - a situation that no industry, let alone a strategically important one, can be expected to accept for much longer.
In October 2008 the Automobile Association released its Transport Traffic Technology Africa Report on the state of our roads. The report indicates that the budget to maintain our roads should be around R32 billion a year but is currently only about 25% of this amount. According to the report the backlog is about R100 billion of which R95 billion is needed to upgrade provincial roads and R5 billion for metropolitan roads. The survey concludes that 35% of our roads are in fair or poor condition.
The collective impacts of congestion and deteriorating road conditions flies in the face of having ongoing transport cost improvements and first class customer service as specified in the national transportation policy objectives.
The lack of proper law enforcement is a major concern for every roleplayer, stakeholder, customer and indeed, citizen. How long has it taken to finalise, implement and enforce the RTQS and AARTO? Where is the political will to tackle and solve difficult problems? This has been with us from before 1994.
The RTMC report on unlicensed and unroadworthy vehicles released in June 2008 confirms there are nearly 920 000 such vehicles on our roads. Trucks represent 12% of the unroadworthy vehicles.
Why does it take so long to get a driver’s licence? At the time of writing it would take about six months if you live in Gauteng and up to 10 months if you reside in the Western Cape.
In terms of road transport, traffic officers, metro police and some SAPS officers are under-trained and under-resourced! How can I make such a provocative statement? The answer lies in this question; “why don’t traffic officers do roadside roadworthy inspections”? Why? Because they do not know how to.FleetWatch readers can cast their minds back to the now several FleetWatch/BrakeWatch events that were carried out in KZN, Bloemfontein, Cape Town and other locations with the co-operation and participation of the provincial and local authorities with the objective to train officers in the procedures and then subject a number of trucks to a roadworthy inspection. To date, each of these events resulted in more than 70% of the trucks inspected not found to be roadworthy and several were taken out of service until properly restored to roadworthy condition. I had the privilege of attending the event in Cape Town late last year. In the preamble leading up to the event, the 102 traffic, metro and SAPS officers in attendance were asked by Patrick O’Leary for a show of hands if the respective officers were doing roadside roadworthy inspections. Only one officer raised his hand. During the two days remaining to complete the event we took the opportunity to ask officers on an individual basis why they were not doing roadworthy inspections? Their replies were: “We have not been trained to do this, we do not know what to look for and we are not going to make fools of ourselves”.
In addition there is considerable evidence of serious corruption involving traffic officers and personnel manning weighbridges. The evidence garnered from transporters and company-owned fleet managers reveal companies are being targeted when refusing to pay the bribes. There are instances of officers being willing to allow dangerous goods vehicles to proceed even if they are illegal.
Based on my own experience it is clear that most provincial MECs and the previous minister of transport have shown scant interest in road freight transport. They refuse to speak to any one suggesting all questions be submitted in writing or not responding at all. This tends to confirm the notion that trucking in South Africa is neither properly recognised nor respected. Based on the lack of interest the media displayed following the appointment of the new minister, Mr S’bu Ndebele, provides further indications that road transport continues to be blind-sided, as it always has been, by government, business and the media. Hopefully the additional powers granted to the minister of transport will be used to change these perceptions.
What about the road freight industry and what it can do improve productivity and efficiencies? It is not uncommon to find that drivers, schedulers, controllers and even fleet managers are not trained in the basics of mass distribution, load placement and safe loading practices. Every day, we see vehicles on the road that are under-loaded, over-loaded or loadless. By now, night deliveries should be the rule rather than the exception. Those who attended Alta Swanepoel’s Workshops last year will know that in due course the consignor will be jointly responsible for the correct and legal loading of vehicles and will be required to sign off each load that is transported in their own or contractor’s vehicle.
What about the maintenance of vehicles? I have already mentioned the shocking findings that emerge each time FleetWatch mounts its Brake & TyreWatch projects. Why is it so difficult to maintain trailers in particular, tyres and vehicles generally? Why does the road freight industry not promote a career in the industry as being worthwhile? Why do we not have a basic qualification before an operator’s licence is granted. Contrary to popular opinion that such a requirement is not in the interests of SMME’s getting into the industry, just think of how many newcomers would make the grade and not go belly up whenever there is a bit of heavy weather. Give some thought to how many transporters went belly up at the beginning of 2009. There is now, more than ever before, compelling reasons for the road freight industry to take ownership of its industry by embracing a viable and sustainable system of self regulation and engaging government at all levels.
With respect, the Road Freight Association needs to change fast to incorporate fleet owners whoever they may be. There is no decent lobby with which the government can engage, one that government will consult and listen to. The industry is still too parochial.
Private carriers have different mindsets and no representation. They operate generally in a comfort zone. The huge growth in the wholesale and retail trades in recent year failed to realise much investment to improve the number of loading bays, dock levellers, trolley jacks, staff to assist and supervise faster unloading. Unlike other countries, consignees do not pay demurrage when contractors’ vehicles are kept waiting.
Producers and FMCG manufacturers have indicated a willingness to address some of these problems and much is being debated about the importance of collaboration. To speed up deliveries and seek lower freight rates we can anticipate the emergence of deals between producers, manufacturers, wholesalers and retailers that customise client needs based on market demands and conditions and delivery requirements. A properly organised road freight industry will make sure that they are included in such negotiations and decisions.
What can be done?
What then can be done to improve road transport productivity and efficiencies? Here are a few suggestions for consideration:
While road transport is doing a credible job filling the gap left by rail, its performance is driven by ongoing demand. However, this is with ongoing cost increases for the economy and the industry. To overcome or minimise the root causes that make road transport more and more expensive, a realistic and holistic approach to identify and get to grips with the key cost drivers is probably the only way productivity and efficiency can be improved. The example that follows looks at the cost of road transport at different levels of efficiency.
We need to keep in mind that small savings frequently make worthwhile contributions to profits, productivity and transport efficiencies. The simple, hypothetical example is based on current market related benchmarks and illustrates how minimising and improving current obstacles contributes to ongoing productivity.
The ubiquitous Interlink, the rig we love to hate.
This hypothetical case study is based on a long haul operation covering 189 000 kmpa, with a 34-ton payload and 100% load factor. The average speed is 63 km/hr and the fuel consumption is 1.8 km/litre. The workload is 250 days. The fixed, overhead and running costs are based on current market related benchmarks.
The table that follows depicts the differences in productivity when expressed in ton/km-hr. Note the difference in the cost per ton/km-hr and cost per ton delivered when there are minor improvements in payload, average speed, and load factor. The improvements are reflected in small changes to the number of working days and working hours. The optimum operation for this vehicle configuration would be a payload of 36 tons, and average speed of at least 65 km/hr and a 100% load factor.
The example illustrates a considerable impact on the cost of transport when the payload is compromised, the standing time excessive and average speed limited to the speed of traffic.
A CSIR Freight Logistics Survey indicates road transport accounts for 245 billion ton-kms. Given the difference in costs depicted in the example above, this would represent between R22 and R66 billion if it applied to all the ton-kms traveled. While this is obviously not possible it does underline how much can be done to make road transport more affordable by at least improving the challenges outlined so far. Such improvements would also remove vehicles from the road. More transport with fewer vehicles is an elegant solution to many of these challenges. The recent article in FleetWatch documenting the arrangements between Woolworths and Fast ‘n Fresh to deliver and receive goods 24/7 has resulted in a 50% reduction in the F ‘n F fleet size along with a host of other benefits including fewer accidents and incidents frequently associated with fatigued drivers.
Government is under pressure to take tonnage off the roads and is seeking a new national freight strategy. A way forward would certainly include optimising modal strengths. The challenges facing affordable and sustainable freight logistics in South Africa is not about rail versus road. It is about the coming together to optimize the strengths and innovative potential of each mode. Is it not time for the DoT to establish inland dry ports? Why should we clear all the imports for our land-locked neighbour countries and then haul it across our roads. Is there not a case for in bond ports located in say Polokwane where vehicles can haul goods from there across the borders. There is probably a strong case for such a port to be located in Gauteng where almost half the country’s economic activity takes place.
Currently there is discussion on ways to exploit possible intermodal projects. South Africa does not have the distances as in the US thus making intermodal operations less attractive. It is also not just about forcing container traffic onto the rail. Here again we see the need for a strong fully representative body to be part of the discussions and future decisions to ensure the country does not end up with even more knock-on costs than it has due to the current imbalances.
Road traffic and related regulations must be implemented and properly enforced. There is no point in amending or implementing laws that are not enforced. Enforcers must be trained and properly managed. Tough action needs to be taken to wipe out corruption. Overloaders, including consignors need to be reined in. Time for talk should be over, operator cards should be suspended as the law requires and if necessary impound vehicles of serious and habitual offenders. In this respect, the DoT needs to rebuild trust with the industry and road users generally.
From an industry perspective, all aspects need to participate in the formation of a meaningful organisation capable of engaging government at all levels as well as other relevant stakeholders. The stakes are too high for the status quo to continue. Road freight transport must be fully recognized for the key role it plays in ensuring the economy succeeds locally, regionally and as part of the global community. Several African countries are growing their GDPs at rates almost equal to developed countries in the first world. South Africa does not want to miss out on the opportunities this will present in due course. On the other hand, failure to tackle and achieve this will eventually see South Africa with a culture of traffic and transport lawlessness as found is many of the countries north of our borders. The disintegration of the infrastructure, unrestricted importation of unsafe, unroadworthy used vehicles with no reasonable means of reinstating any level of acceptable standards are examples.
The road freight industry must now step up to the plate and implement an acceptable and sustainable level of self regulation. The number of unlicensed unroadworthy vehicles on our roads along with hordes of under-trained, ill-disciplined, fatigued and churlish drivers is already a matter for national concern. When properly applied self regulation makes law enforcement much simpler and effective while vehicle owners score longer contracts and make better profits. The industry has access to the CSIR, NPI and Load Accreditation Programmes (as in Sugar and Timber projects successfully implemented in KZN). Regular technical and driver performance audits are the stepping stones to improving transport efficiency and raising the level of compliance.
There is no substitute for an efficient and productive road freight industry. Road transport must grow with the economy. The economy must grow to help create jobs. South Africa has world class transporters, a good infrastructure – albeit we need to look after it a bit better – and an industry with huge experience, expertise and knowledge that needs to engage with government and business to deliver that long sort after objective of ongoing cost improvements and world class customer service.
The FleetWatch family, wish you a more successful and more rewarding year in 2010. Let’s look forward to regular and bigger volumes and more payable kilometres at better rates. Let’s be positive, think, talk and achieve better transport efficiency by working smarter and not just harder.