SA’s trucking industry is crashing. This is why

Sandton trucking boss Mass Borgia has been forced to start from scratch at the age of 74, after the company he founded more than two decades ago downsized its fleet and retrenched half its staff.

Borgia, who was retrenched as a director of Canterbury Transport, once owned 26 long-distance carriers which have now been cut to six in the face of a crisis besetting the trucking industry.

Borgia, who is now operating one cross-border truck on his own, blamed his old company’s plight mainly on the low rates conglomerates pay transporters to move their goods across SA.

With more than 80% of SA's food, medicines, fuel and many other goods transported by road, there is growing concern about the state of the trucking industry as both large and small companies face closure, drastically reducing their fleets or shutting up shop.

Trucking industry experts blame soaring fuel costs, an oversaturation of trucks on the road because of SA’s failed rail system and ongoing protest action for the state of affairs.

“It seems to me that transport is the first place big retailers cut costs. They get transporters who will do it cheaper,” said Borgia.

“There’s rising fuel costs, the risk of drivers getting shot, trucks being burnt, theft and looting. All that is on the shoulders of the poor transporter who does the work.”

Earlier this month transport minister Fikile Mbalula announced that government would bring about a “rail renaissance” and there would be an eventual shift of freight from road to rail.

In response, Gavin Kelly, head of the Road Freight Association, asked: “What rail?”

“The reason 88% or more of goods are transported by truck is that there is no viable alternative. There is cargo on the roads that should not be on the roads but the owner of the cargo has no other options.

“Now you want to attack the only system that is moving goods. When road freight stops, this country will stop. It’s fuel, it’s food and medicines plus everything else.”

Kelly said fuel costs and protests were the main reasons some of the industry was in a shambles.

“The biggest challenge for small and even big operators is that as fuel goes up you have to somehow find the money to keep buying fuel or putting guarantees in place for large amounts.

88% of SA's goods are moved by road.

R25 — the average amount per km it takes to run a truck.

—  IN NUMBERS:

“They might get paid at the end of the month, but sometimes 30 days may seem like 40 years to a business that just does not have the cash to survive.” 

Kelly said protests within and outside the road freight sector had also become debilitating for transporters.

This week several truck drivers brought traffic on the N3 between Johannesburg and Durban to a standstill in protest against the employment of foreign truckers.

“The terribly difficult thing is that these protests affect everybody, including the guys who are compliant, who don’t employ foreigners and who pay more than the minimum wage. Their assets get burnt and their drivers get hurt,” said Kelly.

He said the freight industry was also battling with being the target of service delivery protesters.

“When you burn a truck it looks far better than burning a small little car.

“Protests are a huge challenge for us, because they seem never-ending. Often they have nothing to do with the sector itself but they impact on us.”

There are a number of operators who have closed because they can no longer take the economic hits from the protests.

—  Gavin Kelly, Road Freight Association

“There are a number of operators who have closed because they can no longer take the economic hits from the protests. That means fewer operators. We still have enough operators to pick up the slack, but one has to look at the long-term economic impact of the fuel price and protests.”

A transporter, who did not want to be named, said his company had battled several challenges recently.

“Low rates paid to us is one of them. We had a truck hijacked recently. The load it was transporting and the trailer were stolen. Eventually the truck was dropped off at our client’s premises.

“The safety of trucks in high-risk areas is also a problem. Last year one of our trucks was burnt. Our tyres get stolen while parked at a client or at certain truck stops.”

Afzal Hamed of SA Long Distance Truckers — a Facebook page for truckers — said looting, hijackings, poor road conditions and low rates had adversely affected the industry.

“Some companies haven’t increased rates in four years.

“At the moment it costs R25 per kilometre to run a truck on average. Few companies are getting R20, others even less.”

Steven Gottschalk, CEO of logistics and warehouse conglomerate Value City, said apart from escalating fuel prices, transporters were incurring additional costs on security due to looting, strike action and increased crime.

“The looting of vehicles is of great concern. In our experience the N3 Mooi River, N1 Cape Town and Grassmere [in Gauteng] are hotspots for looting.”

He said while the company had not reduced its fleet “we have had to improve on our planning and on-road tools to optimise our operations”.

“Both of our Pinetown and Cato Ridge operations were severely affected by the 2021 unrest. Rioters burnt and stole our trucks and forklifts as well as our customers’ goods, pilfered our depots and destroyed our properties.”

He attributed the closure of transport companies to the Covid pandemic, financial pressures and unrest “which continues to affect the whole supply chain industry”.