Trucking industry having a torrid time as diesel costs spike

An overall feeling of dismay is probably the best way to describe how transport operators are processing the latest diesel price hike on Wednesday. While petrol increased by 51c/l, it’s the continuing hike in diesel – this month by R1.40/l – that will be straining the economic lifeblood of our economy. From crime and looting, to road blockages and a dysfunctional ports system, the road freight industry has been licking its wounds for some time now. Gavin Kelly, chief executive at the Road Freight Association (RFA) tells BizNews correspondent Michael Appel that operators can’t keep on absorbing these increasing costs so it will, inevitably, filter down to an already overstretched consumer.

Excerpts from interview with Road Freight Association chief executive Gavin Kelly

Gavin Kelly on the effect of the latest diesel price increase on the industry

There’s obviously a lot of dismay for some transporters. They have to find the capital to fund their operations. Many transporters run on a process where they drive and deliver and then submit invoices. And a number of those invoices are subjected to a 30 or even a 60 or 90-day recovery process. So they have to carry the expense of diesel for a number of months. So dismay is probably the right word. And if you don’t have the resources to buy the fuel – and operators have had a torrid time with the fuel that has doubled in price over the last two years – we’ve had Covid-19 and all of those wonderful side effects that came with that. Then there’s the war in Ukraine that has been forcing pressure on many supply chains. So you will find that many operators are struggling. Operators can’t keep absorbing these sort of costs. So the cost is going to have to be passed to the client.

On the latest Transnet strike and its impact on logistics

Something like this at the ports really is a bad thing because those are almost the gateways into the country and into the continent. For a long time, South Africa has played as the gateway to the continent in terms of logistics. When something like this happens it places tremendous pressure on the ability to deliver on time, especially for manufacturing processes. And, of course, all of the perishable types of industries that exist. So the first thing is that where you have very tight delivery timeframes within the logistics chain that are linked to perishables, then of course that stock is either lost or it is just returned and not accepted. So our ports are really critical to the supply chain. You have the operators and the transporters – you might have seen reporting on social media – some trucks were standing in queues of five to seven days.

On road closures and blockages on major routes like the N2

It has been really difficult for us. We have a number of communities who now want to block off roads, especially in that [Pongola] area, especially in Mpumalanga and around those routes that the mining trucks are taking. When I say mining trucks, those trucks that are carrying products from the mines like coal and manganese. One can understand why the communities are upset. Not only are their lives in danger, in terms of the volumes and the way in which some of those trucks are being driven, but the whole infrastructure is under tremendous strain and that is destroying their quality of life in terms of them being able to travel safely on those roads. So one understands the frustration. The problem is that a number of actions taken are both illegal and unlawful, which then of course brings in conflict between the industry or the drivers themselves in those communities.

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