Heavy vehicle sales expected to drop 40%

The road freight industry has been feeling the pinch of the global economic downturn and 2009 is proving to be much tougher than many expected. According to the Road Freight Association, the trucking industry was severely affected by the dramatic changes in the oil price, the fluctuating interest rates and spiking currencies due to a shock resignation (even if it was only temporary) by the Minister of Finance. With fuel costs accounting for about 42% of operating costs, the fluctuating fuel price is severely hampering the industry. With the fuel price continuously hovering around the R10 mark, costs remain high and transport logistics are expected to remain at their current depressed levels. But the wheels have to keep on turning, as there is no doubting the importance of trucking on the South African economy. According to economists, it is imperative that goods and products still be moved across the country, despite the drop in demand. It is expected that over the next five years the slow improvement of rail networks, the congestion at ports and the investment in mining and infrastructure will continue to drive road transport. But South Africa’s recession is impacting the industry continuously. According to Wesbank, heavy vehicle sales are expected to drop a staggering 40% this year – the first time in years that this sector has seen any decline.