New brand, new tech, new RFA

Along with new branding, the Road Freight Association (RFA) introduced delegates to new technology at its annual conference – a fitting introduction with a theme of emerging technology at the heart of conference discussions. MARISKA MORRIS attended

While much of the annual RFA Conference that delegates know and love remained the same, the Association introduced a bit more flair to the 2019 edition, which was held at the Royal Swaziland Hotel and Spa in Eswatini, formerly known as Swaziland, from August 11 to 13.

As always, the conference provided delegates with expert insights into developments within the southern African road freight industry and the opportunity to network through a series of social events. Alongside the two-day conference, there was a Mexican-themed welcome function, a golf day and a three-course gala dinner with a Las Vegas theme. Welcome drinks for the gala dinner were sponsored by Mercedes-Benz Trucks.

Delegates also had the opportunity to test their driving skills in the Mercedes-Benz Actros at the Truck Test, which was held outside the conference centre.

This year there was a new look to the RFA and the conference sessions. As RFA CEO Gavin Kelly explained: “There is new branding, and there are new concepts and colours. The Association needs to change. We need to make sure government understands that we are the professional road-freight operators who lead in the country.”

Along with the new red and black branding, the Association introduced some new technology, which allowed delegates to submit questions and rate the presentations immediately from their cellphones. The programme also provided some entertainment between sessions with short quizzes and prizes.

All the RFA innovations were perfectly on trend with a key focus of the conference: the impact of emerging technologies on the South African road freight industry. The conversation focused on technologies born from global efforts to fight climate change, such as electric vehicles (EVs).

Electric is coming

The experts disagreed on the extent to which EVs will form part of the future of road transportation in South Africa, but there was no question about whether they would be present. Although EV sales in South Africa make up less than one percent of total vehicle sales, the global industry is booming.

As Khanyiselo Kumalo, energy analyst at Green Cape, stated: “The electric vehicle market is growing exponentially. There is a lot hype and innovation being pumped into the industry, which is estimated at US$ 118 billion (R1,7 trillion), with passenger vehicles still dominating the industry.”

There are several reasons for countries to adopt the technology. For South Africa, the key motivations should be meeting requirements set out in the Paris Agreement on climate change and protecting the automotive industry. Kumalo explained that the automotive industry risks losing business as more countries ban the sale of new vehicles with internal combustion engines.

“Where will these vehicles go if the markets to which we are exporting no longer accept internal combustion engines?” Kumalo asked. “We need to make sure that local passenger-vehicle manufacturers can keep up with global market trends and changes.” Investing in the EV market can also offer South Africa unique opportunities in the lithium-battery manufacturing sector.

Kumalo explained: “There are five key raw materials that are important in manufacturing the lithium batteries used in EVs. South Africa is home to two of those materials.” Presently, South Africa exports the raw mineral and then imports the reworked product at a higher price. There is an opportunity to refine the material before exporting it.

While the industry might offer many opportunities, the adoption of EVs in South Africa will depend to a great extent on whether the price of the lithium batteries declines, as the cost of batteries is the main contributing factor to the high cost of EVs.

“One of the factors that can derail the market is battery price, which is not declining as expected. As a result, it will take that much longer for EVs to be as affordable as petrol or diesel-powered vehicles,” Kumalo said.

If EVs do become more affordable, Kumalo expects public transport and vehicle fleets to be the main adopters of the technology. While the team at Green Cape seem optimistic about the future of EVs, Arthur Goldstuck, MD of World Wide Worx, warned against the “hype cycle”, which companies experienced with the Fourth Industrial Revolution and artificial intelligence (AI) technology.

AI and autonomous driving

Last year, many industries were told to invest in AI technology or run the risk of being left behind. A survey by World Wide Worx found that 13 percent of companies were using this technology with an additional 63 percent planning to invest in it during 2019.

However, when a similar survey was conducted this year, the company found that there had been no new investment in AI technology, and that interest had declined to 21 percent, simply because the technology was too expensive and there was a lack of adequate skills.

Instead, Goldstuck believes that technology such as AI will be introduced more gradually. In the EV market, hybrid vehicles offer a more gradual shift to electric as is evident in the high number of sales of these vehicles. Kumalo explained: “People are not ready to go fully electric. They still want the convenience offered by a petrol or diesel-powered engine.”

Similarly, AI technology and autonomous driving vehicles will be introduced more gradually, according to Goldstuck. He noted: “The vehicle of the near future will tell the drivers what to do as they drive. The next generation will optimise the performance of the vehicle while driving without the driver even realising it.

“South African roads are not ready for self-driving vehicles. What they are ready for is driver-assist technology, such as collision warning and lane assist, which is already available in some vehicles. These are forms of autonomous driving.”

Like EVs, Goldstuck believes that AI is inevitable. “There is a massive change coming, because this technology is intruding into every aspect of business and consumer activity. No one is unaffected by it. We should look at how others in the industry are using this technology, rather than how to avoid using it,” he explained.

Fossil still fuelling the country

As the industry waits for the slow adoption of these technologies, Kevin Baardt, head of strategic projects at the South African Petroleum Industry Association (SAPIA), predicts that fossil fuel will remain the predominant power source for road transport.

During his presentation at the RFA Conference, Baardt noted that EVs will make up only 32 percent of the market by 2060. He explained: “Where transport is concerned, and considering the reliance on fossil fuels, oil is likely to still be the dominant energy carrier along with biofuel and gas. That is today’s view point; it can change tomorrow.”

Baardt believes that cleaner fuel should be a priority. “Fuel quality is critical to achieving acceptable environmental performance of internal combustion engines,” he said.

He explained that, according to research, emissions from vehicles that run on Euro-6 engines are cleaner than the ambient air quality. In addition, these vehicles produce less particle emissions compared to their electric counterparts.

Particle or particulate matter (PM) refers to solid particles or liquid droplets found in the air. There can be a great impact on the respiratory and cardiovascular health of people who come into contact with these particles.

“If you compare a Euro-6 vehicle with an EV, the PM emissions from the Euro-6 vehicle are less than that of an EV, because an EV is a heavier vehicle with more loaded brakes, which result in more particle emissions,” Baardt explained.

Unfortunately, South Africa is not yet able to produce the cleaner fuel required for a Euro-6 engine. However, these clean fuels are being produced in other African countries like Kenya.

No more ignoring the changes

Whatever the solution, South Africa can’t ignore the need for greener transport much longer. Liesl de Wet, who provides strategic support for the RFA, spoke about green trucking at the conference and shared some very concerning statistics including the fact that the global temperature has risen by one degree.

“Back in 2016, the world came together and agreed that in order to prevent runaway climate change, the global temperature can’t warm by more than 1,5 degrees,” De Wet explained.

“There is thus only half a degree to play with. Scientists predict that unless global emissions decline by 45 percent by 2025 and reach net zero by 2050, the world won’t achieve its goal. Currently, the world is heading for a two- to three-degree increase in global temperature.”

Economics and politics

In addition to discussions around various new technologies and global warming, the conference also provided some insights into the economy and political situation of the country. Political analyst Ongama Mtimka shared some insights into the challenges facing President Cyril Ramaphosa and the ANC. He estimated political stability will be achieved only in 2029.

“I highlight that election year, as I think South Africa will be emerging from a coalition government, which will take place in 2024. The self-destructive momentum of the governing party will most likely continue, and it will lose a significant portion of the national vote in 2024,” Mtimka explained.

While South Africa still faces some political unrest, Mtimka felt that institutions such as the courts will help provide some stability. Although there is some uncertainty around land reform, Mtimka noted that South Africans have a very constitutional view on policies, thus no land reform policy will be passed that is unconstitutional.

This is important, as respecting property rights is essential to a successful economy, as economist Dawie Roodt pointed out at the conference. He shared some insights into the expected economic growth in South Africa and explained that, while South Africa isn’t in a technical recession, the country is getting poorer.

A technical recession is when there are two consecutive quarters in which the economy contracts. However, this doesn’t necessarily mean a country is becoming poorer.

“If the population is growing at a rate of one percent and the economy is growing at a rate of two percent, then, on a per capita basis, the country is getting wealthier. If the population is growing at minus one percent and the economy is not growing at all, the country is still getting wealthier on a per capita basis,” Roodt pointed out.

He describes a recession as any growth, or lack thereof, which results in a decline of wealth for the population. Although Roodt predicts growth in the second quarter, this doesn’t mean South Africans are becoming wealthier.

“Growth in the first quarter was very low. This means that growth in the second quarter will have been even lower,” he said. South Africans will continue to become poorer over the next two years as the economy continues to grow very slowly.

“My expectation for economic growth this year is probably around half a percent or lower, with a similar growth next year,” Roodt predicted. “South Africa needs to grow its economy by roughly five percent per annum. We are not going to get there with the current economic policies.”

Industry overview

Kelly also used the opportunity to share some information about the work being undertaken by the RFA and some expectations in the industry. He noted: “It has been a difficult year, and many have felt the lashing tongue of the foreign driver issue. The road ahead for seems to be filled with potholes and challenges. We need to remain positive.

“One thing that became very clear during the foreign truck-driver issue is that without trucks South Africa truly did come to a standstill. Somewhere along the road, everything was on the back of a truck. Whether that truck is one with a 1,5-t payload or 200-t payload, road freight plays a huge role in the lives of every person in southern Africa.”

The Association sat down to talk to the individuals involved in the burning of trucks. Kelly said: “From that moment going forward, 90 percent of the attacks stopped. Even the attacks on the transport operators who are not members of the RFA stopped.

“If there was any doubt about the value of the council and the RFA’s relationship with the unions, this was very good example of why we need to have these discussions. While there have been some sporadic attacks, the uncontrolled violence has stopped. We’ve lost drivers, trucks and money, but the violence has stopped.”

He noted that there have also been fewer hijackings and urged operators to report any incidents within an hour to assist in recovering the vehicle. Kelly also urged transport operators to pay their e-tolls.

“I don’t think e-tolls will go away. If this was going to happen, it would have happened a long time ago. Remember, it remains illegal to not pay e-toll bills,” he pointed out. Kelly also touched on some unresolved policy changes, such as the high-cube container legislation, which will be revisited only at the end of 2019.

The 2019 RFA Conference once again provided the road freight industry of southern Africa with some valuable insights. The industry can look forward to what the new and improved RFA will have to offer in the coming months.