THE YEAR 2009will long be remembered for the near catastrophic melt down of our economy as the country took the massive and repetitive body blows that flowed from the reckless and seemingly insatiable greed of reputable international banking institutions and to an extent, similar irresponsible practices on the part of our local banking and financial services fraternity. Thanks to the established prudent financial policies of the Reserve Bank and the ministry of finance during past years, South Africa was, at the time, in better shape and somewhat less vulnerable than many other significantly larger countries. While there is no useful purpose in laying the blame, the banks will long be remembered for their consummate failure that resulted in handing transporters, fleetowners, newcomers and the vast number of equipment suppliers an extremely difficult year. A year that saw any number of transporters being forced to sell their businesses, reduce the size of their fleets, or just go belly up.
Intrepid transporters have shown considerable determination and innovation in coping with lower volumes, fewer drops per day and the total kilometres they can travel due to ongoing delays especially where vehicles are unloaded. Coping with these challenges should be seen against the background of weaker freight rates and notwithstanding a lower average fuel price when compared with the average for 2008, there were, during the year, several sharp increases in operating costs (tyres, replacement parts, labour rates, driver wages, toll road and licence fees are examples). Shippers and consignors were seen to hold a tough line when it came to paying for reduced payloads, refusing to recognise the reality of transport costs. The daunting transport challenges that needed to be overcome in 2009 and no doubt well into 2010 demonstrates the widespread lack of knowledge, understanding and appreciation of road freight transport operating costs. This may sound derisive of shippers and consignors. However, based on the views expressed by any number of long established transporters, experienced and respected transport managers and the number of requests for help and advice in respect of trucking costs that flow from the FleetWatch training projects and visitors to the website, there is undoubtedly an urgent need for management to have more focus on this vital element if the country is to enjoy the benefits of efficient transport.
Road transport bears the brunt of criticism that arises out of the high cost of freight logistics and the destruction of the roads. Yet, Transnet Freight Rail (TFR) continue to make limited progress in coping with the major share of commodities that should not move by road, this especially so in respect of mining and agriculture. Without road freight the country’s fruit exports would be minimal. Government needs to step up to the plate and maintain roads properly according to a sustainable schedule and support its efforts with consistent and effective enforcement of road traffic regulations – this with particular focus on overloading and vehicle fitness.
As we greet 2010, transporters and fleet managers can start to look towards improving volumes and hopefully a reduction in “fly by night” transporters who, like the “TV runners” in the Comrades Marathon, grab the limelight for a brief while and then run out of steam somewhere a long way from the finishing line. Transporters acquiring a repossessed vehicle take a chance going into the market with cut throat rates, which destroys a number of successful transporter/ shipper relationships and sooner rather than later move on to some other way of make a living. The few rands shippers think they are saving is short lived when compared with the damage it does to a healthy road freight industry.
The availability of employable drivers remains a key factor. Other than inhouse training programmes, little has emerged in the form of accessible and affordable training programmes from the industry training authority. The looming onset of the AARTO Act demands the better training of drivers in all aspects of the driving job as it refers to the joint accountability drivers and owners have for the vehicles they operate. The question of limits on driving hours cannot be evaded for much longer and should be jointly addressed by the road freight industry and various government departments to which transport applies.
It has been a long cold winter for vehicle manufacturers, their dealers, trailer and bodybuilders as well as all the allied equipment suppliers. Once again, based on a cross-section of views expressed by transporters and fleet managers, there are more brick-bats than bouquets when it comes to the level of service that dealers are offering. Allegations of excessive parts pricing, poor technical back up and questionable workmanship are levied against virtually all the most well known and long established suppliers in the country. A surprising outcome at a time when one would have expected a major lift in after sales service and back-up as a useful source to generate enough income to recover daily operating costs – key to long term survival in the retail motor business. Hopefully 2010 will bring a more positive attitude to this vital part of the business of trucking.
The good news is that it is not all doom and gloom as some persist on preaching. The tough times have motivated any number of transporters to seek and find more frequent return loads, thereby improving their overall load factors. This is a much tougher task for transporters of perishable goods who need to find compatible loads without having to wait too long before returning to base. Night deliveries are slowly but progressively becoming more the rule than the exception as more shipper and receiver managements accept the need to extend the hours goods can be delivered. The question of security is more a convenient excuse to avoid employing the additional staff to receive after hours deliveries. Industry watchers are still dining out on the Woolworths/Fast ‘n Fresh 24/7 operations that resulted in a 50% reduction in fleet size, fewer delays and fewer accidents and incidents.
The stress and strains that flowed from the huge retail boom that occurred mid-way in this decade, the high and at times obscene fuel price and the ongoing negative impact on available time to complete primary and secondary distribution tasks inspired transporters and fleet owners alike to seek a variety of ways and means to reduce costs and improve payloadability of their fleets. The growth of 6x2 truck-tractors and 30-pallet tridem semitrailers are examples of the huge investment the industry has been made to meet the challenges of our exploding freight logistics framework. Sharp focus of optimal load placement, improved routing and scheduling aided by extensive use of technology to drive communications with drivers and customers, and real time vehicle location are now standard practice among the most successful fleets.
What then are the positives we can look forward to in 2010? Hopefully the suggestion made in 2006 to suppress the movement of freight before, during and after the FIFA World Cup will not transpire other than in the immediate vicinity of the stadia on the days of the matches. The predictions for the number of visitors to the country during the period May to July augurs well for increased volumes of just about everything. Some believe there will not be sufficient truck capacity during this period. Agricultural production and fruit exports are likely to be at or near record levels.
Government has signed off the Road Freight Transport Industry Charter, now in the Parliamentary Standing Committee for Transport; the third draft of the Charter confirms strong government support for road transport to ensure its ongoing growth and success to fulfil its role in the economy. The Liquid Fuels Industry Charter will reach maturity by November 2010 by which time the industry is committed to ensure there are a lot more Previously Disadvantaged People participating in the distribution of liquid fuels. The emergence of these two Charters will enhance the awareness of the importance of road transport as a vital element in our economy.
An ongoing recovery of the US economy will hopefully bring a more stable Rand. The advent of the AARTO Act roll out during the course of 2010 should make a positive contribution to improved vehicle fitness and better control over overloading practices. According to Barloworld SupplyChain forecasters, more CEOs have participated in its upcoming survey and the prospect for better collaboration to improve the delays at outlets is encouraging The work needed to be done to finalise the production of cleaner liquid fuels are underway and should be finalised during the year.
As 2010 dawns we can look forward to an interesting year with potential to claw back market shares, improve operating costs and above all, achieve more transport with fewer vehicles, better payloads, more drops and sufficient kilometres to earn at least a commercially acceptable return. q