RFA condemns truck attacks

The Road Freight Association (RFA) cannot believe that the scenes that unfolded on the N3 highway in the early hours of 9 July were anything other than a coordinated attack on the road freight sector. GAVIN KELLY explains that both the specific spot on the N3 and the timing of the incident were chosen to maximise mayhem and disruption.

The road freight sector’s trucks carry 80% of the goods moved in and around South Africa, as well as the goods for those countries that use South African ports for import and export to trade with various international markets.

FAR-REACHING EFFECTS

Those who attack the road leg of logistics supply chains need to understand that in the long-term, their actions will be more destructive to employment levels and will result in further job losses, because businesses and supporting sectors will shrink and trade will move away from South Africa.

Without trucks, South Africa stops. The incident on the N3, which took place at Van Reenen’s Pass on 9 July, was a ruthless attack on the road freight supply chain. The economic, business confidence, security, law and order, and corridor movement effects are far reaching.

The immediate short-term losses will run to millions of rands. This includes the cost of vehicles, cargo, personal effects, road damage, response by emergency medical services, delays in movement, and shipping penalties. The long-term impact, meanwhile, will be felt in terms of the negative effects of increased security costs: higher logistics costs, insurance premiums, South African Special Risk Insurance Association (SASRIA) premiums, and toll fees. In turn, this could lead to decreased freight movement through South Africa, freight company closures, a spate of job losses… the list continues.

ASSOCIATED COSTS A MAJOR CAUSE FOR CONCERN

If we break down some costs associated with this kind of coordinated attack, the reasons for concern are obvious.

Depending on the category of vehicle, the type and value of cargo, and the specialised equipment required for cargo, vehicle costs can be anywhere between three and 10 million rand. A simple calculation of capital losses (assets and cargoes) of the six trucks destroyed to date in focused attacks amounts to anything between R18 million and R60 million.

The cost of loss of income through business closures is immense. If any of the trucks belonged to a small business, that business may have lost its only truck or trucks. This means loss of earnings/revenue for the business; loss of salaries paid to staff who would no longer have jobs (due to business shutdown); and loss of revenue through the services and support used by the business, such as fuel, storage, maintenance, tolls, staff requirements, and licensing.

Potential closure of businesses means fewer transporters available to perform work. Some owners might feel the industry is not a safe/secure environment, and simply decide to close their businesses.

Freight passing through South African ports (especially the Port of Durban and along the corridor that has been targeted) may be moved elsewhere, potentially through neighbouring countries. This has already been happening as South African ports become increasingly inefficient and the surrounding ports develop, improve, and drive efficiencies up. South Africa’s “Gateway to Africa” status has already been lost; these attacks will further cement the move of transit freight from South Africa to its neighbours. Port revenues will consequently drop, as will income through all support and related freight logistics users.

Some 7,000 container deliveries are made through South African ports per day (the port of Durban handles roughly 4,000 containers a day). Any delay along the N3 – along which the majority of containerised freight is destined for the port – will result in backlogs and delays for imports and exports.

BROADER IMPACTS INEVITABLE

Depending on vehicle configurations, truck moving delays cost the transporter between R5,000 and R7,500 a day. A rough estimate of revenue loss from the 7,000-odd vehicles from various destinations that would be affected by a one-day delay at various points of entry and along the N3 corridor would be around R35 million. This is the broad road freight sector impact.

This is even before factoring in the cost to communities where jobs will be lost – those that provide various services to trucks travelling the routes through South Africa and the rest of the continent. That figure will increase as freight moves away from South African ports to neighbouring countries.

The N3 is probably the busiest corridor in South Africa, carrying far higher volumes of traffic – including freight carriers and passenger / light motor vehicles for commercial, tourist, and private use – than any other corridor. To reiterate: the cost to the South African economy, taking all of the above into consideration, will run to billions of rand lost as business confidence from foreign investors plummets and those who use South Africa as a transit hub turn away from us and move to other countries that are safer and more efficient.

WHO IS RESPONSIBLE? 

Bearing in mind the significant repercussions of these events, the more important questions to be answered are: who is behind this attack, and why? There was no looting of vehicles, so the intent was not cargo theft.

Thankfully, none of the drivers or staff on the vehicles were injured or killed. Nevertheless, the targeted precision of the attack is worrying: this was well planned and efficiently implemented.

To date, no group has claimed responsibility, but if this is the same group that has been behind similar attacks across the country over the past six years, then action needs to be taken. Those who promote, plan, and implement such criminal actions must be brought to justice. We have heard the Minister of Police refer to economic sabotage and use a lot of other descriptive language, but it would seem that this behaviour continues unabated.

If, indeed, this is the work of the All Truck Drivers Foundation (ATDF) and its counterparts, and relates to the employment of illegal foreigners in the road freight (or any other) sector, the responsible Department of Employment and Labour must act. The department, utilising its inspection structures, must ensure that it strictly and swiftly fulfils its responsibility to protect employees and employers from non-compliant labour practices.

At this stage the RFA does not know which companies were targeted and attacked, nor whether this was a random choice of trucks or focused on a specific set of transporters. But it is invariably those who are compliant and innocent of the complaints or issues raised by others who get caught up in these activities. These are the companies that ultimately pay the price of closed businesses and the severe cost increases that affect operations. 

As this issue of FOCUS was finalised, there were many more attacks on trucks around the country. We will report on further developments in this regard in the next issue of the magazine, on our website, and via our social media channels.