Freight industry faces serious challenges – Coface

The South African freight industry faces some serious challenges in the months ahead as uncertainty in the global recovery, fluctuations in the oil price and unusual weather patterns all continue to have an adverse effect, said Jayson Naidoo, freight analyst for Coface South Africa. “Locally, volatile fuel prices and strike action especially have affected freight forwarding prices and guarantees of product delivery,” he said. “We have recorded a slowdown in the freight market as a result of organisations consolidating deliveries to save costs.” Naidoo said internationally the Japanese tsunami and the ash cloud over Europe had played a role in affecting the freight sector across the globe. “In addition to all these market pressures, the impending tolling of Gauteng highways is expected to have a further negative effect on the industry.” While it could provide an opportunity for freight to be moved to rail, inadequate infrastructure would rather see the cost of freight soaring in coming months. “Coface does not foresee freight forwarding companies absorbing the increased costs but rather the increasing of freight forwarding charges. This is expected to have a knock-on effect for suppliers, who will either have to absorb the additional cost of delivery or pass it on to consumers. “Increased competition will mean that customer service will continue to be an area of key focus for most companies as these challenges are faced headon,” said Naidoo.