Impact of Consumer Protection Act on forwarders spelt out

The Consumer Protection Act will not impact too drastically on the freight forwarding industry in South Africa – particularly when it comes to day-to-day business deals. Briefing the South African Association of Freight Forwarders (Saaff) at its annual general meeting in Johannesburg, legal adviser William Fullard said expectations were that the Department of Trade and Industry would set a threshold value for the Act at around R1 million per annum similar to that of the Credit Act. This would mean that the Act would only be applicable when doing business with companies with a turnover of R1 million and less, while for bigger companies it would be business as usual. “The big impact is that each company will have to decide if it is worth the effort to still do business with the smaller players and the individual. If they do decide to do business then they will have to alter their standard trading conditions to take the Act into consideration.” But, said Fullard, who has been commissioned by Saaff to look at the impact of the Act on the freight forwarding industry, it would probably no longer be of value to do business at the bottom end of the scale. “The dti was expected to announce the threshold at the end of April, but this did not happen. They have also refused to commit to a timeline of when they will be announcing the threshold. At this point however all indications are that it will be aligned to that of the Credit Act which is R1 million.” Fullard’s advice to companies in the meantime is to analyse their customer base and determine what percentage of clients will be affected by the new Act. “I don’t believe it is worthwhile for companies to change their entire business model for a small percentage of clients. Of course it will depend on each company and each CEO will have to make a decision based on who their customers are and what their company strategy is.”