Hauliers absorb rising costs as money is pumped into rail

Lobbying and negotiation are the primary functions of any industry body, and the Road Freight Association is no different. But tangible products and services are equally important for its diverse and growing membership FTW spoke to acting CEO Sharmini Naidoo to find out what progress the association was making on both counts. joy orlek “The core function of the RFA is lobbying and negotiation,” says Naidoo. “We use our collective bargaining power to pull weight – we are the watchdog of the transport industry. “The products and services are the add-ons – tangible value adds as they’re called – but the reason we exist is to provide a strong lobbying platform.” Last year the RFA focused on its relationship with government, says Naidoo. And while there was criticism that it was too close to government, this was not the intention. A current issue of focus is the reduction in permissible tolerances for overloading from 5% to 2%. The legislation was gazetted in May by the National Overload Control Technical Committee and implemented in June without consultation or prior warning to the RFA. While the association strongly supports government’s efforts to curb overloaders, the lack of consultation was not well received by operators who are up against new challenges all the time. The increasing fuel prices, the reduction in weighbridge tolerances, and the looming threat of additional toll roads are some of these. “The Petroleum Products Amendment Act is yet another impediment to our operators, where diesel rebates may no longer be applicable to smaller operators.” Ultimately the road haulier is forced to absorb any additional costs in a highly competitive industry where margins are constantly being trimmed by a range of other factors, like fuel, another issue of strong focus for the RFA. “Fuel increases have been climbing drastically,” says Naidoo, “and since fuel counts for up to 36% of the haulier’s costs, the consumer will ultimately foot the bill. Money from fuel levies needs to go into investment in road infrastructure and not into the general fiscus.” The industry concern is that government is making road transport very expensive in order to get traffic off the roads and onto rail. And while the RFA supports the contention that certain goods are better suited to rail, it is concerned that investment is being skewed so that road becomes less competitive to fulfil the government’s mandate to push up rail utilisation. “We had a meeting with Spoornet to look at the collaboration issue last year and they expressed an interest in the concept. “Rail is talking to bigger operators but can’t negotiate with every SMME. They have suggested that the RFA sets up a consortium to act on behalf of SMMEs in a collaborative effort. "It’s a concept that the RFA supports, but as the RFA we need to maintain our independence and as such could only facilitate this. We can’t get involved at an operational level.” In a related project the RFA intends undertaking a study to determine which products are best suited to road versus rail. “At the moment we’re having difficulty getting the information for rail, but intend to do an in depth study that tests the efficiency of each mode commodity by commodity.” Naidoo says the road freight industry is prepared to collaborate with rail if it is cost-effective and results in better service levels to customers.