Shippers will pick up the tab for toll-related R60m extra per year

The tolling of Gauteng’s roads will increase Imperial Logistics’ operating costs by R60 million per year, according to its chief integration officer, Cobus Rossouw. This figure, he said, was less than expected and excluded internal administration fees. “Initial calculations were around R100 million, but we are now looking at around R60 million per annum,” he said during a recent presentation on the impact of the Gauteng Freeway Improvement Project (GFIP) on freight logistics. “We must not forget that we often overestimate how much we travel on tolled roads. The average is lower than 50%. So yes, we expected the figure we were going to pay on toll fees to be much higher.” Asked who would ultimately be responsible for the bill, Rossouw admitted much of the cost would be passed on. “It is a very difficult question to answer because Gauteng is impacted heavily by distribution activity and throughput. That is different from your normal long hauling activities,” explained Rossouw. “The reality is that Gauteng has a very different logistics environment that has to be taken into account. With distribution it is not as simple as just passing the cost on to the customer as efficiency has been gained that must be taken into consideration.” He said where it was statutory costs they would undoubtedly be passed on directly to their clients. “There really is no simple answer.” He said regardless of the increased cost of the tolls it was important to note that logistics operators and customers alike were gaining efficiency. “We will be able to get better predictability of vehicles with faster turnaround times on trucks. All in all there will be a benefit to all.” Rossouw said ultimately freight logistics in the country needed capacity and therefore Imperial Logistics welcomed the GFIP as that was what it was ultimately creating. “We need capacity to grow with the economy. I live in Pretoria and I work in Germiston and I have to admit that the R21 that I travel along is a pleasure, but already capacity has been breached as it takes me fifteen minutes longer to get to work than a year ago,” he said. “We are now in the plus-15-minutes-a year situation. The message is simple. If we don’t have new development and we don’t spend money on our infrastructure we will not grow our economy.” According to Rossouw, the lack of capacity often results in congestion – an unpredictability that drives up supply chain and logistics costs. “Therefore we put lots of fat into the system as one does not have control over when deliveries will take place. That results in higher costs,” he said. “Also, when freight is moved to off-peak times such as deliveries at night, for example, it has a cost implication.” Calling on more compliance from truck operators, Rossouw said logistics operators would ultimately benefit from the GFIP as it would improve efficiency significantly. “Compliance, however, is critical. We need to make sure that we don’t have overloaded vehicles on the roads or vehicles that are not being maintained.” INSERT ‘We must not forget that we often overestimate how much we travel on tolled roads.’ CAPTION Cobus Rossouw … ‘We will be able to get better predictability with faster turnaround times.’