With the price of fuel set to increase by about R3.20 in the first week of June, “the first signs of despair and retreat will be within the road freight logistics sector”, says Gavin Kelly of the Road Freight Association (RFA).
In a no-holds-barred column (*) sent to Freight News, the association’s chief executive refers to the price increase as a “perfect storm”.
Whereas the country as a whole cannot afford such a spike, road freight operators will be forced onto their knees by the steep increase in running costs, he warns.
“Already, some transporters have closed their doors due to the effects of the Covid pandemic. Financial pressures have remained on the increase, and the unrest that continues to ferment, radically shown by the violent period in July 2021 when the whole logistics chain was attacked (trucks, depots, distribution centres, warehouses and retail stores), continues to wear down companies and cause more closures.”
He adds that “operating costs within the road freight and logistics sector have continued to increase exponentially, with many of these increases coming at a time when the road freight industry can least afford, or withstand, these shocks”.
Trying to remain viable without passing too much cost onto consumers, also backed into a corner by spiralling costs, means the projected fuel price increase with be the “final nail in the coffin” for some transporters, Kelly warns.
Read Kelly’s column here: https://tinyurl.com/47yt5cvr
