Diesel pressure builds away from the pump, and freight operators feel it first

When South Africans talk about fuel, the conversation usually starts with the price displayed at their local service station.

For road freight operators, however, the more important number is often somewhere else entirely: in the bulk diesel market that keeps trucks moving between depots, warehouses, stores and homes.

That market is less visible to consumers, but it can shift quickly when supply tightens. Durban-headquartered retail logistics company City Logistics says much of the pressure on transport operators starts with the discounts and supply terms that sit behind fleet fuel procurement.

Medium and large fleets do not usually buy diesel in the same way motorists do. Many work through structured fuel arrangements with oil companies, wholesalers or depot-based refuelling systems.

These can include fixed supply terms, negotiated discounts and access to bulk fuel infrastructure, all of which help operators manage diesel as one of their highest costs.

In steady conditions, those arrangements can soften the effect of fuel price movements. The problem comes when availability is squeezed because of global disruption, local shortages, refinery issues or regional constraints. At that point, the first pressure point is often not the official diesel price itself. It is the discount that suddenly gets smaller, disappears, or becomes a surcharge.

When major oil companies are under supply pressure, they generally prioritise their own retail networks and contracted customers. That can leave less product available to third-party wholesalers, pushing up wholesale prices. Transporters buying through those channels can then find themselves paying more than expected, sometimes within the same month.

The timing matters. Many transport contracts include a fuel component that is adjusted monthly in line with South Africa’s fuel price cycle. But a transporter’s actual costs can move before the next official adjustment. If a wholesaler withdraws a discount midway through the month, the additional cost is not always recoverable straight away. In many cases, the operator has to carry that increase until the next pricing cycle.

City Logistics CEO Ryan Gaines says this is where fuel volatility becomes an operational test rather than just a pricing issue.

“Fuel pressure exposes how resilient a logistics operation really is. When discounts disappear, the impact is immediate. What matters then is whether the operator has the supplier relationships, storage capacity and planning discipline to keep moving without simply passing disruption down the line.”

The issue has wider consequences because road freight carries the bulk of South Africa’s freight. According to Ctrack’s first-quarter 2025 Transport and Freight Index, road freight accounts for 83.1% of all freight payload in the country. When diesel costs rise for transporters, the effect does not stay in the logistics sector. It moves into distribution costs, stock availability, warehouse planning and, eventually, the price consumers pay for goods.

The current environment is also exposing the gap between operators with mature fuel procurement systems and those more exposed to the spot market. Larger logistics companies are usually better placed to manage volatility because they have direct supply contracts, depot storage, contingency stock and relationships with more than one supplier.

Smaller operators have fewer buffers. When wholesale availability comes under pressure, they may be pushed towards retail forecourts or spot-market purchases, where pricing is less predictable and often more expensive. That can be particularly difficult for transporters working on fixed-rate or monthly adjusted contracts.

For retailers, manufacturers and distributors, the question is therefore not only whether diesel is going up or down in a given month. It is whether their logistics partners can keep operating when the fuel market becomes unpredictable.

That means looking more closely at continuity planning. Which routes matter most? Which customers cannot be missed? Which distribution points need protection if the supply becomes constrained? These are not abstract questions when fuel availability tightens.

Gaines says load planning is one of the practical ways operators can reduce exposure.

“Load efficiency becomes more important in volatile periods,” he says. “If you can move fuller loads and avoid unnecessary trips, you reduce the amount of fuel risk inside the network.”

There is also a timing issue. Demand for fuel can rise before monthly price adjustments, particularly when an increase is expected. That can create short bursts of supply pressure. Operators that plan around those cycles, rather than reacting to them, are better placed to avoid disruption.

Some logistics companies are also using hybrid fuel models, combining depot-based bulk fuel with on-road refuelling through participating service stations. The point is not to rely too heavily on one supply channel. If one part of the market tightens, another may still provide enough flexibility to keep vehicles moving.

Multiple supplier relationships can also help, especially in a country where fuel availability may differ by region depending on infrastructure, refining capacity and distribution constraints.

Fuel risk cannot be removed from road freight, but it can be managed. In tighter markets, the strength of a logistics partner becomes easier to see. The operators best placed to protect customers are those that treat fuel not as a monthly line item, but as a supply risk that has to be planned for before the pressure arrives.