Credit crunch hits service providers

GETTING PAID for services delivered is one of the biggest risks to business at present, says Jozef Rosenblatt of Paragon Customs Services. “We work on a good faith principle and times are tough out there. “With the increase in general operating and fuel costs there isn’t that much cash in circulation and this has affected clients’ ability to settle accounts timeously or at all. We have reached the point where we are not releasing cargo until we have been paid,” he told FTW. While volumes have decreased over the past six months, this is an annual trend and therefore not of too much concern, says Rosenblatt. On the positive side, import volumes from the Far East look set to grow even more and India is also picking up nicely, he added. There are good export volumes to Europe in the form of clothing, personal effects and automobile and machinery parts, and the demand from African countries is on the increase. This is mainly for food and clothing products manufactured in South Africa. A noticeable trend is the swing to seafreight away from airfreight. “Seafreight is much cheaper so many customers are prepared to wait longer and pay less,” says Rosenblatt.