Don’t shoot the messenger

This month, JIM WARD tells a fascinating tale of fleet meeting fiction… when paper trucks drive phantom profits. Meet Sampson, who built an empire on essentials and the myth that his trucks actually existed, only to watch it collapse. It turns out that spreadsheets don’t haul cargo…

The ancient Greek philosopher Plutarch first described an event embodying the expression “Don’t shoot the messenger”:

“The first messenger that gave notice of Lucullus coming was so far from pleasing Tigranes that he had his head cut off for his pains, and no man dared bring him further information.”

That mindset applies to many politicians today. Now substitute Tigranes for Sampson Gumede of South Africa. Once upon a time, Sampson opened a store. Growing up in the shady doorway of his grandmother’s tiny shop, he’d noticed what people needed and knew what he wanted to be in life. He sold essentials like candles, cooking oil, flour, mealie meal, paraffin, snuff, sugar, tea, tinned food, tobacco, Vaseline, Vicks, and Omo. In his twenties, he opened his second trading store, then a third, and the business grew into a national chain. Soon he rented offices and assembled a management team. They began opening wholesalers across the land.

After several successful years, Sampson’s team suggested he would make more profit if he owned the trucks and didn’t outsource distribution, so he bought vehicles. Business expanded and he needed a fleet. Some dealers saw Sampson coming, and sold him cheap dry goods bodies with floors made of matchwood and sawdust, fitting the biggest bodies onto the cheapest trucks.

He became a transporter by default. The fleet was run by store managers who knew something about selling, but nothing about trucks. They employed the worst drivers, who had been fired from everywhere else and would wreck the trucks, turning services into rebuilds. Rear doors sagged and wouldn’t close, but forklifts were used to force them shut, bending door surrounds, locking bars and frames, and punching holes in the doors. Nobody checked, so damage was never reported. Dealerships soon became costly, so the stores found backyard places using unbranded spares and recycled oil. They did the absolute minimum, because they weren’t allowed to do much more than oil services.

When the drivers’ seats began wearing out, drivers stuffed them with newspaper and advertising from Sampson’s Wholesalers, because the frames hurt their backsides. Floorplates wore through and were patched with boards to stop rainwater and cold coming in. When vehicles broke down, store managers told mechanics to strip parts from other trucks to reduce costs, so vehicles with accident damage would be cannibalised to keep the others running. They endeavoured to hide expenditure, to avoid head office discovering how few of the vehicles in the fleet were still useable.

Sampson’s Wholesalers was big business now. He couldn’t visit 138 stores himself, so he had people for that who provided feedback. He studied the figures, paid his wife’s gym fees, and enjoyed his big Mercedes, despite the switches that he never understood. At month-end, store managers submitted monthly returns with the boxes suitably ticked:  Fleet allocation: 13  ☑   Fleet available: 13  ☑

The trucks that still ran were constantly out working. There weren’t enough of them left, and many were informally transferred to busier stores; no-one controlled them.

The gap between head office assumptions and what really exists is greater in Africa than anywhere else. Sampson’s fleet had been extensively relocated: engines were often in different towns to their trucks, sent for repairs that were never completed. Maintenance budgets set by head office were unrealistic, but rather than fight with the baMnumzane*, managers pretended they still had vehicles that had actually stopped running years before. A fleet manager was considered an unnecessary appointment. Fictitious monthly returns were accepted – transport costs routinely understated. A store allocated 12 vehicles could only use seven. Of the non-runners, one now stands on bricks in a backyard, minus its engine. One is a chassis cab; the load box has no roof or doors. One lies upside-down in a riverbed at the bottom of a ravine, stripped to a shell. One is at Butterworth Police station, stripped of saleable parts, after a drunk driver hit a goat in an undocumented accident. One is on permanent loan to Flagstaff, as all of theirs are wrecked.

On top of that, there’s a cylinder head in Lusikisiki (the cashier’s boyfriend claimed he could repair it with an angle grinder) and an engine lies in boxes in a rusty shed at Ngcobo, sealed by the Sheriff. An FSR 800 gearbox is in Umtata somewhere, stripped. The business has closed.

Occasionally, attractive young auditors randomly visit stores, but they remain indoors where the air conditioning works, not wanting to dirty their suits or break a heel outside. They ask questions, complete their audits entirely on laptops, eat KFC, and go.

Sampson’s asset register shows 304 trucks and bakkies, with a net book value of R74.2 million. His stores struggle on, deferring maintenance to meet incentive targets and relying on overstretched vehicles. He realises that despite owning trucks, he’s still spending heavily on outside transporters. This discovery worries him.

He hires a new advisor, who concurs that transport is non-core business and is more difficult than it looks. He decides to liquidate the fleet, recover its book value and invest the resulting funds in new stores, focusing on wholesaling, not transport. He asks around and appoints an unsuspecting transporter, keen to win the work and willing to appraise the fleet. He feels confident they will buy it. 

They are given an impressively detailed national fleet list but quickly realise this has little connection to what is at the stores. They begin a national fleet assessment. The store managers hate these visits – which will potentially expose everything hidden in their reports – so they make inspections as difficult as possible.

All the trucks are out; inspections can only be on Sunday afternoons and public holidays; they “forget” to instruct security to permit access to inspection teams and are unavailable on the dates they provided, busy in urgent meetings or disappearing on leave when inspections are due. They fear the inspections because they don’t want to get into trouble, reluctant to explain to Sampson about write-off accidents and missing vehicles.

Completing vehicle inspections in a short time at multiple sites is exceptionally difficult. Favours get squeezed out of many good people. Only the cleverest mechanics can find the sites, identify the vehicles, take useable pictures, and complete detailed inspections – and usually they’re the busiest technicians, always busy on breakdowns.

Their employers dislike audits: no spares are fitted. It’s an unprofitable use of their key staff, who are treated badly and made to feel very unwelcome. After ‘Stefan’ has waited two hours outside locked gates at the Kuruman store on Easter Monday (after driving through the night to be there by 7am), he is sent on a breakdown and is 230km away, removing a Powerliner’s propshaft, when he receives an abusive call from the store manager, demanding to know where he is. The manager complains to HO that even though he “opened up specially”, no-one came for the inspection. He neglects to mention that he arrived four hours late.

Skilled mechanics waste valuable days driving from town to town: chasing leads, trying to establish where vehicles are, and hunting components strewn all over the countryside. The eyes glaze over when they enquire why the only 14-tonner’s engine is in Pofadder, but the truck is in Khatu, with a back axle in Kakamas.

The ugly truth emerges slowly and painfully: an enormous digital folder with hundreds of damning photographs reveals a fleet without engines, wheels, or batteries – with smashed windscreens, accident damage, missing bodies, doors, and components. Asset numbers don’t match descriptions and no transfers were recorded, although registrations have changed. Fleet numbers were never replaced after resprays. This is all news to Sampson…

No-one can explain how, out of 304 listed vehicles, only 178 are runners. Similarly, no one dares to tell Sampson that the book value conceived by his deluded accountant has little bearing on market value. Book value vs market value is now R33.7 million apart.

Nobody wants Sampson’s scattered fleet of mongrels – badly maintained vehicles with cheap bodies and no service histories. Buyers don’t want trucks when they must roam around locating missing components to rebuild them. An abandoned truck without wheels or engine, lying beneath a thorn tree in Kimberley, is a challenging sale. In Sampson’s asset register it’s worth R328,000, but to the market it’s scrap, with recovery costs exceeding its value.

It falls to the transporters to break the news and this prompts an awkward conversation about agreed fleet valuation. Sampson’s chief financial officer wants to shoot the messenger. Sampson wants to shoot his CFO.

Secure in the Sandton offices, the CFO assumed he could value the fleet remotely, based purely on store returns, applying a simple straight-line depreciation formula – naively imagining that managers are all honest in their monthly reports. He never defiled his crocodile skin shoes to check things himself, because he believed that the asset verification forms were genuine.

It’s unwelcome news to discover that a fleet – that glorious asset on paper – is not worth what you think it is. It’s easy to lose a grip on reality if you never go and see what’s really happening outside, assume much, and believe those who flatter to deceive. Plutarch the philosopher understood this, back in 120AD.

*The term “baMnumzane” is a Zulu plural honorific derived from “umnumzane“, meaning “man of the house,” “headman,” or “sir”. The prefix “ba-” makes it plural or collective – so “baMnumzane” refers to several respected gentlemen or headmen in a group.