‘Rate cutting sets the tone for a difficult year’

Against the background of a tough global economic environment, the industry is facing a difficult future, particularly in light of the trend among many forwarders to drive down rates to survive. That’s according to Fernando Branco of Reliable Freight who says fly-by-night road transporters are also posing risks “The industry is very competitive at present and many forwarders are dropping rates to overcome this. The result however is that it is killing the market as these rates are so low it is near impossible to make a profit,” he said. “As it is the rates are on low margins and to drop them is just ridiculous. This makes it a very difficult industry to be operating in at present.” He said another major risk to freight forwarders at present was fly-by-night transporters who disappeared after receiving their deposits. “It is important to be aware of these practices as they can have a major impact on a company should a transporter disappear with a deposit and the cargo.” Branco said while 2011 had treated his company well, it was important to strategise and carefully plan for 2012 as the world faced economic turmoil. Europe in particular is showing signs of uncertainty that will undoubtedly impact on South Africa, he said. “The rate of exchange does affect imports and exports. One does not always have the ability to focus on that which brings in the most money as our business is dictated by the client.” He said for this reason they were approaching 2012 with caution, as the markets remained unpredictable “In 2011 we saw a steady flow of business. We also rebranded the company which definitely extended our client base and helped us to sign some new contracts,” he said. “We also had to increase our staff to meet the demand and to ensure a high level of service.”