Expect hefty road transport hikes as diesel costs spiral

Working smarter will help contain costs ALAN PEAT AS A commercial fuel, diesel is often called liquid gold, according to Kevin Martin of Durban-based Freightliner. “And rightly so,” he said. “The cost of this fuel can constitute as much as 30% of the variable costs to run the vehicle, and is indeed a major cost centre for all transporters. “Yet road transport, in the main, has managed to keep price increases down by working smarter and harder.” But transporters’ ability to keep on absorbing the added cost has certain limitations. “The time is soon approaching when there will be no other option for them but to raise prices – and quite substantially - in order to survive.” A main answer is for the whole freight industry to work smarter and harder to contain costs. This means looking at all the ways of reducing time in the logistic chain – like more effective packaging rather than loose, using the latest technologies in handling equipment and getting the paper-chain smoothed out so that papers are ready at the same time as the cargoes. It could mean more use of rail, for example - taking loads better suited to rail off the roads. “However, it will also need Spoornet to get its act together – and quickly,” Martin said. He also stressed a need for more member companies of the freight industry to operate
24/7 like road transporters and SA Port Operations (Sapo).