Companies increasingly call for up-front payments

Rail may be a very viable and appealing option when moving freight in and around South Africa and Africa, but the reality is that it is just not sufficiently trustworthy. That’s the view of Hazel Briggs, managing director of HB Services, a Johannesburg-based local and cross border freight consolidator that specialises in the transportation of hazardous chemicals. “Border clearing times are always an issue, but at least daily progress reports are available when one is transporting by road. With rail this facility would need to be addressed and in our case I would need to be sure that even though Transnet has improved its service, cargo is safe at all times. What happens when the cargo leaves South Africa?” Briggs says it is imperative to address issues like the infrastructure of receiving countries to ensure that cargo is not pilfered or damaged before reaching its final destination. Briggs says ensuring cargo reaches destinations safely is just one aspect of service excellence and that changing to rail is not an easy and quick decision. Taking the worldwide economic downturn into account, the focus in many businesses is not to re-invent the wheel but rather to keep cash flows going. “All businesses are facing difficult trading conditions and the important aspects of doing business right now include keeping a close watch on cash flows and offering service that is value for money to clients while looking for any opportunity that may arise out of the downturn.” According to Briggs the majority of companies are feeling the pinch and while many had been hoping to avoid the economic downturn, the next few months will be make or break. “It really is about trying to find the opportunities to remain viable in order to still be around when the economy picks up again,” she says. This is not made any easier when suppliers of cross border transport want up-front payments. “The old days of 30 and 60 day accounts seem to be disappearing. So shipments cannot even be collected till proof of payment has been received. Also, due to the increased costs many are experiencing, many transporters now insist on partial or full up-front payments, which can play havoc with cash flows.”