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they compete head on with the state-owned rail network, the
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various lements of the South African road transport industry must work together o succeed — and failure is simply not an option. Max Braun reports.
The slogan "Without Trucks, South Africa Stops", coined by the South African Road Freight Association (RFA) some years ago. is the literal truth According to the 2005 Annual State of Logistics Survey, published by the well respected Council for Industrial Research in Pretoria (CSIR), 83% of the billion-plus tonnes of freight moved in South Africa during that year was hauled by trucks. The country's operators moved lust over 200 billion tonne-kilometres, representing a growth of 7°. over 2004.
The 2006 Annual State of Logistics Survey is scheduled for publication in February 2007, and according to Dr Hans Ittmann, manager of the Centre for Logistics at the CSI A, it is unlikely to reveal any material change in the ratio of road to rail.
The rapid rise in road transport's share of overall freight movements began shortly after deregulation in the mid-1980s.lt accelerated following the demise of apartheid and the election of the government of national unity under the presidency of Nelson Mandela in 1994 To gain a better perspective of the sheer scale and significance of road transports role in the South African economy— and indeed the economy of the whole of southern Africa —we need to look at the industry's history. Control over road transport began in 1930; within a few years regulations governing the transport of goods were extended to include 'for-hire (hire and reward) and 'own-transport (own-account) operations, covering the entire country. But political expediency soon crept in to protect the interest of the state-owned railway system.
As a result, transport legislation and regulations hobbled the growth and development of the road transport industry, restricting it to the extent where only a few basic operations could be run without a permit.
Trucking in South Africa has always attracted a wonderful breed of men and women who possess an insatiable entrepreneurial spirit, fed by the diesel that flows through their veins. During periods of economic growth and development, individuals who could scrape a few pounds together for a reasonable second-hand truck took the first steps into the rough, tough world of being a transport subcontractor.
Survival of the fittest
Sadly. through lack of experience, knowledge or financial resources, many lost whatever they started with. Others, however, survived and grew into flourishing world-class carriers; many are still family-owned businesses operating 100 or more vehicles In the 1970s, after battling for years to convince the Department of Transport (DoT) to relax some of the stringent constraints embedded in transport legislation, a handful of large privately-owned carriers formed an organisation along similar lines to the UK's Road Haulage Association; it is now known as the Road Freight Association (R FA).
From the first it successfully lobbied the government and various interest groups to gain concessions including the maximum length of artics. and permission to use tractor units with a range of semi-trailers.
The RFA has become a truly representative organisation, capable of lobbying for widespread recognition of road transport's vital role in the economy.
Towards the end of the 1980s. a lack of investment left the South African rail system struggling to meet the demand for inter-city transport in general. and the movement of containers between major cities in particular. But at the same time traffic regulations made it increasingly difficult for operators to haul their loads legally.
The then transport minister, not wishing to offend the all-powerful railways, asked for a 'Band-Aid solution that would pacify the hauliers while keeping the rail bosses at bay. Hugh Sutherland. the RFA's technical manager at the time, came up with a solution acceptable to everyone concerned. including a maximum GCW of 56 tonnes (see diagram, page 62).
For most of its people. South Africa continues to enjoy the longest economic upturn in living memory. This is reflected in the demand for transport services, and the number of new trucks sold in the past four years. The etude parc at six tonnes gross and above has rown by about 100 000, and it's expected to
row by another 30.000 next year.
According to Fleet Watch magazine and the ational Association of Automotive Manutacurers in South Africa (NAAMSA). the national fleet over six tonnes reached just over 287,000 at the beginning of 2006, with about 130,000 large trailers and semi-trailers.
Lopsided infrastructure
South Africa's infrastructure reflects the country's lopsided industrial landscape. Nearly 50% of industrial and commercial activity takes place in the Gauteng province, which includes Johannesburg Pretoria and the former Witwatersrand Inbound freight from the overstretched Durban harbour is the starting point of the golden route for long-haul big rigs The ubiquitous six and seven-axle intercity vehicles ply the heavily tolled N3 freeway to Gauteng day and night.The N3 from Durban t Belt Bridge, at the northern extremity of South Africa. is also the gateway to land-locked neighbouring countries including Zimbabwe Zambia Malawi and Botswana. All national freeways (N-roads) are busy round the clock with heavily loaded, often overloaded, long an medium-haul LGVs carrying just about anything that can be transported on rubber.
Road transport in South Africa is diverse: close to 70% of vehicles above six tonnes gross are run by own-transport operators. These include manufacturers of fast-moving consumer goods (FMCG) such as Coca-Cola SAB Miller, Shell Oil. BP and the Spar Group. Renowned international and local third-party distributors such as DHL/Exel, Vector Logistics, Digistics and Imperial are succeeding in their quest to take on the transport and distribution functions of large FMCG manufacturers.
Sophisticated rental sector
Aside from own-transport fleets and third-party distributors, South Africa has a sophisticated truck-rental industry, well represented throughout the country and capable of providing a full range of equipment for operators with seasonal peaks.
Used-truck traders are also well organised and in abundance, especially in major cities. A wide variety of pre-owned vehicles is constantly available, so transport operators, fleet managers, owner-drivers, truck-rental companies and third-party distributors are spoiled for choice when it comes to selecting vehicles and equipment, along with technical support. It's always good to have options.
The seemingly inexhaustible stream of new makes and models provides operators with arguably the widest choice anywhere in the world. Traditionally, European marques have dominated the top end of the business, Mercedes-Benz currently holds pole position with its Actros, Axor and Atego ranges. MAN, Volvo, Scam% Iveco and Daf all enjoy strong sales in this market.
Toyota, Nissan Diesel. Isuzu, Mitsubishi, now branded Fuso, have dominated the mediumtruck sector (7,50015,000kg gross) for many years. The Asian invasion began recently, with Tata's 6x4, 10m3 Novus K4DEF capturing an impressive share of the rigid tipper market
PowerStar, the Chinese-built version of the outdated M-B Powerliner, is carving out a share of the burgeoning tipper sector. MAN is due to launch its Indian-built Cargoline during 2007, while Freightliner's Argosy, Paccar's Peterbilt, Navistar's Eagle. and Mack represent the USA. Volkswagen will be launching its Constellation range in 2007.
Over the years. several trailer builders have developed high-quality products specifically for South African operations. All nature of trailers and semis suitable for the large variety of operations in the country are available as flatbeds, insulated loadboxes, bulk-tanker trailers, pressure vessels and artic tippers (side and end-tipping).The large manufacturers provide comprehensive maintenance contracts and technical support Equipment suppliers and service providers work within an ultra-competitive market. Vehicle suppliers have added huge value to the industry in several ways by sustaining comprehensive dealer networks; maintaining large investments in replacement parts and reconditioned components; providing technician and driver training; and offering fleet management assistance with particular reference to vehicle selection and performance.
Road transport support services are also well developed.There is a large selection of suppliers offering vehicle satellite tracking, automated fuel management systems, temperature monitoring equipment, fridge units, truck-mounted cranes and hydraulic tailgates, along with virtually any kit that is obtainable in the EU or USA.
Trucks need finance
And vehicle finance has evolved to service this burgeoning industry. Most vehicle manufacturers are linked to large financial services companies and provide a full range of packages. including leases with or without maintenance and guaranteed buy-backs under certain conditions.
So what are the downsides for road transport in South Africa? With everything going so well over the past few years, it is generally agreed that the economy will remain stable up to and even past 2010. That's the Soccer World Cup year, on which much of the current optimism depends. However, despite steady demand for transport services —the product of a stable economy supported by sound economic fundamentals —the road transport industry has its challenges.
Operators and fleet managers are struggling to gain control over issues such as the flood of new vehicles coming on to the market; traffic congestion to the point of gridlock in and around the major cities; the sharp rise in fuel prices; and the shortage of experienced and trained drivers.., the sort of problems that would make a UK operator feel at home!
Exchange rate issues
More recently, the weakness of the rand against the US dollar and the euro —the two currencies with the biggest impact on the transport industry — have imposed further pressure on companies coping with flat freight rates that are not likely to improve any time soon. Growing overcapacity, especially in dryfreight haulage, is another challenge.
The shortage of drivers is a real problem, particularly at the top end of the industry. Many older drivers are stopping due to health problems such as diabetes and high blood pressure. which prevent them from holding a valid professional driving permit (PrDP). A PrDP is mandatory for drivers of all vehicles over 3,500kg GVW. and it must be renewed every 24 months.The industry has also been hit hard by HIV/AIDS. It is not a notifiable disease in South Africa, but based on extensive anecdotal reports a significant number of drivers in South Africa suffer from the virus. Ongoing difficulty in obtaining competent drivers will inevitably drive up wages and lead to other concessions.
Road/rail rivalry
The long-standing battle between road and rail in South Africa continues. During the past 18 months Transport Minister Jeff Radebe has made clear the government's intention to facilitate discussions on how best to take logistics costs below the present estimated 15% of GDP.
The DoT has stated it is committed to seeking ways to reduce and reverse the migration of freight categories from rail to road —container traffic is included in the suggested list of commodities that are deemed to be more suited to rail. Spoornet, the state-owned rail system, is in the process of generating more than R6Obn (£4.2bn) to replace and refurbish its rolling stock, locomotives and general infrastructure. Within a few years the rail network hopes to double its share of general freight traffic to 20% — and, as in the UK, it is not yet clear how this will be achieved.
A further decision, aimed at protecting roads and reducing the cost of highway maintenance, presents another challenge to road transport. In the near future, bucking the trend in the EU, maximum axle loads and vehicle lengths will be reduced.
Stronger policing of the roads and roadtraffic regulations are in the pipeline too. The government plans to allocate large sums to beef up the transport infrastructure and ensure the success of the Soccer World Cup in 2010, and as part of this programme traffic laws are to be more strongly enforced. Amendments to regulations are being signed off, while more traffic officers are being recruited and trained to ensure all aspects of the road-transport quality system (RTQS) are complied with. RTQS covers operator, vehicle and driver-fitness responsibilities. Governme thinking includes introducing a comprehensiv 'user-pays' structure to recover taxes and charges levied on the road-freight industry.
Stretched
Spoornet will be fully stretched to provide efficient rail services to its huge iron ore, coal and commodity clients.Then it will have to tu its attention to the general freight market. Government intervention to force a modal switch, no matter how well it hides the iron fis in a velvet glove, is more likely to add to consumer price inflation than to achieve its objective of establishing a better balance.
The bottom line is that the road transport industry is vital to the ongoing prosperity oft country and it must overcome the obstacles and challenges that are fundamental to keeping the wheels of industry, manufacturin and agriculture turning.Trucking is the heartbeat of South Africa.
Above all the industry needs to present a united front and become properly organised lobby government effectively at all levels. It is time for operators to demonstrate a consiste commitment to self-regulation and the excommunication of those who fail or refuse comply. Without trucking, it is not only South Africa that will stop —the entire southern African region will grind to a halt. In