High fuel costs challenge all operators

FINDING WAYS to mitigate high fuel costs is the goal of all freight firms, and Germistonbased Reddy Cargo Services has various ways to deal with a 60% rise in the running costs of its fleet of 50 long-haul and 20 local trucks. One way is to do more short-haul and over-border jobs. “Rates are more attractive for over-border work. Costs increase with long-haul jobs within South Africa, like the Jo’burg to Durban and Port Elizabeth routes. We prefer local work, short-haul within a 100 km radius, break-bulk and container work,” said company MD Arnold Reddy. Customers are squeezed by costs as are transport firms, Reddy said. “There is a wide range of transport companies to choose from locally. We are an established firm with an overhead that determines our costs, and if a shipper can save a couple of hundred bucks using a trucking company with five vehicles operating out of someone’s garage they're welcome to go for that. But those other firms cannot offer the security or the same reliability customers get from us,” said Reddy. Business for Reddy Cargo Services is “busy, busy, busy,” despite the fuel cost burden, and this allows the firm to choose customers who are cooperative about fuel costs. “We are picking customers who are informed, who know about the world situation (with regards to fuel costs) and are willing to pay,” Reddy said. Undesirable customers are those that are fully aware of the fuel cost effect on transport, but put the blame on the transporters and demand last year’s shipping rates. “They demand 30 days' notice even though we don’t have contracts with them. We do have long-standing relationships with some customers, and they are understanding,” said Reddy.