‘Fronting charges are counter-productive’

I have been instrumental in establishing one of the first joint venture BEE companies in the industry between two local entrepreneurs and a big multinational company and have been reading about ‘fronting’ frequently lately. It’s always related to BEE and targets mainly the larger and medium sized companies. Must these companies just lay down their tools (staff I mean) and die?
Do the ‘traditional’ BEE companies, as they are being referred to, really believe that they can offer the same kind of service that larger or medium sized companies can offer with their own global networks of offices, warehouses and integrated IT systems, or is this maybe another kind of ‘fronting’ - or only wishful thinking?
What about international customer relationships that have developed over many years and global purchasing power when it comes to freight rates? South Africa is just one piece of the puzzle that international companies (customers) are dealing with when they look at optimising their global supply chains. What can a ‘traditional’ agent in SA do for such a customer?
I know from my own experience that especially the large and medium sized agents are doing a lot in terms of staff training and development of previously disadvantaged groups. Giving away some equity (the more the better) does not add any value for the customer, but it has happened anyway to some extent at least.
I believe there is absolutely no doubt that BEE finds a lot of support especially from the Council of 10, and the use of the word ‘fronting’ should in my opinion disappear from any discussions as it will not help the process.
Karl-Heinz Balzer, international transport management and logistics consultant, Johannesburg.