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Closure of Roads at oPhongolo due to Heavy Freight Vehicles

freight

Closure of Roads at oPhongolo due to Heavy Freight Vehicles

According to media reports, the local community has blockaded roads and is preventing heavy freight vehicles from moving in the area of oPhongolo, KwaZulu-Natal. This follows on the heels of a meeting between the oPhongolo Mayor, during which the community demanded close monitoring of trucks by the municipality to prevent a recurrence of the terrible incident last year which cost the country many young lives.

Evidently the Mayor, Bheki Thwala, stated that after the horrific incident, authorities promised they would monitor trucks for speeding and roadworthiness. He said that was done and everything was running smoothly, but the monitoring suddenly stopped.

The first question that arises is: which authorities is he referring to (if not the local municipal traffic force itself), and the second is: why did the authority stop the activity? Additionally: whilst the authorities were monitoring, was there a change in the behavior of the targeted road freight operators, and when the authorities withdrew – did behavior revert back to what it was before the authorities were active?

The Road Freight Association (RFA) has repeatedly called on the authorities (at various levels in government) to address the issue of non-compliant operators (transporters), as well as to deal with any offences that are committed – especially where such offences may be repeatedly committed and are the root cause for incidents that occur.

It surely is logical that, given the huge increase in coal transport by road through the area to Richards Bay, that the Provincial traffic authority would allocate more resources to the routes that are now carrying far more vehicles.

Transporters are now faced with situations where routes are barred by communities (who in themselves are acting illegally / unlawfully) and those transporters who played no part in the recent tragedy. Some, even having contributed freely to the communities in their hour of devastation and sorrow, are now tarred with the same brush and are prevented from operating their compliant, legal and safe businesses.

This is neither fair, nor in any way legal.

There are very clear and focused legal requirements and parameters for operating road freight vehicles on public roads. The regulations contained in legislation need to be consistently and firmly applied, monitored and those operators (transporters) that ignore these requirements must be dealt with. Decisively. The law-abiding operators must be allowed to continue their operations without hindrance from parties and groupings who have no role in the control and monitoring of road freight traffic matters.

“The closure of the road is a move by the community to call all relevant stakeholders to come and engage [with] them regarding the matter,” said Thwala. Hopefully this will include the Provincial traffic authority which needs to restore the control of road traffic matters back to the mandated authorities and to ensure that non-compliant road users are dealt with – including those who block the free flow of traffic.

Thwala said he met the community and also spoke with truck authorities about the road closure. It would be interesting to note to which truck authorities the Mayor had spoken in an effort to resolve this – unless he is referring to the operators that run coal vehicles through the oPhongolo area.

biodiesel fuel

A Road Freight Logistics Perspective on the Latest Fuel Price Increase – What it Means for South Africa

As at 02 November 2022, the cost of diesel for transporters increased by R1,42 for 500ppm and R1,43 for 50ppm. That will raise the prices to R25,49 and R35,75 respectively.

The price of both grades of petrol – 93 and 95 – will increase by 51 cents per liter.

The Central Energy Fund (CEF) attributed the price hikes to rising international fuel prices and the weakened Rand.

What does this mean? Well, to put it in perspective, diesel cost R12,15 and R21,78 in January 2022. Diesel has doubled (increased by 100%) since December 2021.

Road freight transporters use – in the main – diesel as the energy source for their vehicles. They need to increase their pricing to cover the ever-increasing cost of diesel, and there are transporters who will not be able to carry on. This will be driven by the transporters’ need to fund operations (the use of fuel) whilst only being paid months after the work has been done – ins some cases up to three months afterwards.

In the meantime, the next load needs to be moved, and so on, and that all needs fuel for the vehicles. There just aren’t limitless reserves of cash to continue the high level of fuel expenditure against the delayed payment for work already done.

In some cases (and we are beginning to see more and more businesses in stress/business rescue), customers/businesses will reduce volumes to be transported or even curtail stock movement – depending on consumer consumption levels. Transporters will feel this impact on their businesses. Many transporters will not be able to muster the guarantees required for purchasing fuel on credit (required as customers take up to 90 days to pay AFTER the transport has been provided) – and the transporter has paid for fuel, paid the driver, covered other costs and still needs to operate a business – whilst others just don’t have any cash to carry themselves for 90 days.

Whether we like it – or not – the continuous increases in the price of diesel inevitably drives the cost of transport and logistics up – step by step – and, with roughly 85% of all goods moved through and around the country having a road leg at some part in the journey, there will be increases to consumers, (you and I) as the cost to transport goods increases.

Fuel breached the 55% mark in daily operating costs during the third quarter of the year, and now as we head into the final month of 2022, are already hovering around 60%. That’s a cost to company (any company or business that requires goods to be transported to manufacturing/processing/packaging/staging/distribution or retail operations) that cannot be borne by the company.

That cost will – in most cases – be borne by the consumer. You and I will pay more for – well – everything. From food to fuel, from clothing to electronic goods and everything in between. Prices will rise – some immediately, but more so a domino effect will ensue, the next in a long line of such domino effects that we have seen too often in the last few months.

Transport costs will rise. There is no alternative for transporters – and those that cannot afford to carry loads at the rates or prices customers are prepared to pay, will simply close down.

More business closures, more unemployment, less business and revenue driven through the transport sub-sector industries, and of course, higher prices at the till.

As we have experienced, the Reserve Bank has aggressively increased the Repo Rate in an attempt to restrict the inflation monster, and signs are pointing to another stiff repo rate increase in November (at least 50 basis points – if not another 75 basis points). That, together with transportation costs for goods and services, will grip the consumer in a tightest financial squeeze just before the festive season – where traditionally many retailers have generated income to carry them through the financial year.

This will not be a bountiful as it has been in the past, and there are many consumers who will “stay at home” and cut the “lavish spending” associated with the Festive Season.

tyre market

Department of Trade, Industry and Competition (DTiC) Stabs Consumers with Huge Tyre Levy Hike

The DTiC published anti-dumping protection levies on the importation of tyres into South Africa, yesterday: “in terms of section 57A of the Customs and Excise Act, 1964. This provisional payment in relation to anti-dumping duty is imposed up to and including 8 March 2023”. A schedule was published with this announcement. The anti-dumping duty is levied at 38,8% on the imported price of the tyres.

Together with other transport-related organizations and associations, the Road Freight Association (RFA) had earlier engaged with the DTiC – and bodies involved in the retail and wholesale tyre sectors – to gain clarity on why these anti-dumping duties would be implemented, given the inability of the local manufacturing industry to meet local consumption demands, as well as to ascertain how the local manufacturing industry would be adversely affected. Tyres are imported from various markets – precisely because South Africa does not have the capacity to meet local consumption.

Will the DTiC be using these levies collected on imported tyres to fund the development of a local tyre industry, specifically for local manufacture? Will tyres that are locally manufactured also include the price hike? What is the plan by the DTiC to ringfence such levies collected, to ensure that the local industry is developed and grown?

A 38,8% increase on the price of tyres will impact on the operational costs of transport, driving the price of the transportation of goods up by at least 8%: depending on the transport leg variables, this could be more. This means that, despite the dire economic situation in the country, consumers will pay more for goods, (including the basic basket of everyday food, transport and medicines. This will drive inflation – if not higher, it will definitely hold off any decreases from occuring a lot sooner than we had hoped.

Tyre prices incurred the normal annual increase in July 2022 – which was 5,9%. By adding the anti-dumping levy, tyre prices will now increase by a whopping 44,7% in a single year. This is untenable for any transport operation – whether moving freight or passengers – and will see increases inevitably being passed on to consumers.

Tyres are a crucial link in the safe and efficient operation of a vehicle – affecting road safety (through road holding ability, carrying weights, navigating through bad roads and ensuring the driver has control in unexpected weather or traffic situations). They also affect the fuel consumption of a vehicle and the type of wear and tear that is experienced by the road surface. The country cannot have a situation where tyres become so expensive that fleet owners and private individuals begin to push tyres to the extreme limits of wear and endurance.

The Association appeals to the DTiC to reconsider this decision and proposes that, once there is sufficient sustainable capacity in the country, that the possible introduction of an anti-dumping levy is then considered to protect a local tyre manufacturing industry that actually produces enough tyres to meet local demands.

fuel

Reports of Large Fuel Price Decreases are a Welcome Breath of Good News

Data indicates estimated decreases in the fuel price in the coming week as follows: R2.35 per liter for ULP95, R2.18 per liter of ULP93, 77c for 50ppm and 87c for 500ppm. Illuminating paraffin is set to drop by an estimated 87 cents per liter.

The Road Freight Association notes that any decrease in the cost of fuel – in particular larger decreases – will have a tremendous positive effect on transport costs and supply chains.

Whilst the price of fuel has dropped, the effects into the logistics chain should be felt in the coming quarter and will certainly make life slightly easier for consumers towards the end of the year.

With fuel prices dropping, there should also be a boost for the local tourism industry to boot.

South Africans will now pay less for fuel than they did in June 2022. This will go a long way to placing downward pressure on inflation as well as the cost of logistics within South Africa, which is one of the key drivers of the items measured in the “inflation basket”.

It must be remembered that fuel price fluctuations are driven by the cost of oil (fuel) on the international market and the Rand/Dollar exchange rate. Concerns remain around the effect global instability has on these two factors and the long-term effect high fuel prices will have on the South African economy.

There would, obviously, be a greater positive/downward) effect on freight logistics if the price of diesel was to drop as dramatically as petrol has, as the majority of road freight logistics is done with diesel vehicles.

The Association calls on the government to speed up programs to make South Africa less reliant on fuel imports, by improving or expanding SASOL and similar manufacturing processes, as well as ramping up the introduction of suitable and sustainable Electric Vehicle program.

About The Road Freight Association

The Road Freight Association was established in 1975 to support its Members who are, in the main, road freight operators. It is a lobbying and negotiating body which influences the state of the industry, rates, upkeep of the road infrastructure, road safety, freight security, driver interests, cross-border transport, education, health, the fuel price, law enforcement, labor relations and many other issues related to road freight transport.

Member companies include small and medium-sized trucking companies, including many family-owned businesses, owner operators, as well as most of the largest trucking companies in South Africa. Members come from all sectors of the trucking industry.

Private and public operators are Members of the RFA. Membership also includes a significant number of affiliates and associates – those companies providing goods and services to the trucking industry.

Team RFA (made up of support staff and experts) is committed to serving you. The team brings with it a high degree of professional experience, knowledge and dedication – which greatly contributes to the effectiveness, relevance and standing of the RFA.

As the voice of the trucking industry in South Africa, the RFA is your voice. It is important that you avail yourself of that opportunity to be heard.