Rates squeeze

Small transporters are struggling
to make ends meet as volumes and
rates still have to improve to prerecessionary
times.
“In theory one would think a
cross-border operation to the DRC
would be a very profitable option for
a transporter, but as small operators
we just cannot compete with the
big volume-based companies any
more,” says Andre van Huysteen,
owner of Boksburg-based trucking
company Vanito Trading.
Before the 2008 global economic
downturn transporters would easily
get up to R75000 for a one-way trip
to the DRC, and be able to make at
least another R40 000 with a return
load. Those days, however, are long
gone.
With rates in the region of about
R45 000 at present, transporters
are struggling to make ends meet
seeing that the cost of a round-trip
to Lubumbashi is in the region of
R65 000. If the transporter is lucky
enough to pick up a return load
(bringing in about R40 000) he can
still manage to make a slight profit
of about R25 000 on a trip.
“If one takes into account that
a round trip to the Congo takes a
minimum of a month, theoretically
it means a transporter is making
R25 000 for each of his rigs,” says
Van Huysteen, who runs four rigs at
present. “But that is before the bank
instalment on that truck is paid,
which will come in at around
R20 000, leaving you with about
R5 000. All of this is also
dependent on a smooth trip with no
breakdowns and no bribes having to
be paid and no delays.”
If a company is running 400
trucks it becomes a viable business
but small transporters with only four
or five rigs are finding it hard to
remain competitive and stay afloat.
“We just can’t do it anymore,”
says Van Huysteen. “We have to pay
at each border post for a number
of extras ranging from permits to
income taxes. Diesel alone will cost
about R27 500, another R10 000 for
the driver, at least R25 000 for toll
fees and then some. In Zambia, for
instance, you can pay up to $30 000
for a permit for over 53 tons. The
costs are high.”
Van Huysteen says with rates at
present often at least half of what
they were before the recession,
more and more small transporters
are facing the reality of no longer
running cross-border operations.