Strict transport regulation, combined with expensive start-up costs, have been identified as major obstacles to new entrants into the transport sector, particularly black emerging operators.
The regulatory obstacles faced by emerging road freight operators came under the spotlight during a panel discussion at the launch of the Truckers Association of South Africa (Tasa) last week where a spokesperson for the Department of Public Enterprise pointed out that “legislation” had proven to be a challenge for government in providing opportunities for new black transporters.
Tasa has officially put itself forward as the representative of smaller players in the road transport industry, particularly previously disadvantaged truckers.
Head of the international transport, trade and energy department at Shepstone & Wylie Attorneys, Quintus van der Merwe, however believes the challenges are more regulation-related than legislative. “Together with the common challenges faced by experienced operators in the industry, this can be a major obstacle – particularly for those not well versed in the complex management of a transport operation,” he said.
Van der Merwe added that although there were BEE initiatives, and that it might be a bit easier for new companies to gain contracts – especially from state-owned enterprises – the freight industry was still competitive and therefore difficult to break into.
He highlighted the National Road Traffic Act, various provincial ordinances, cross-border legislation, customs legislation for licensing, consignor obligations and the requirements for handling dangerous and hazardous goods as just a few of the obligations that emerging transporters needed to abide by. Along with fuel running costs, toll fees and operating costs such as tracking devices, safety equipment, licences and training for drivers, new road freight companies might opt out of important protections such as insurance and voluntary accreditation like the Road Traffic Management System (RTMS) in order to save money.
“Naïve entrants might not protect themselves through standard trading conditions or limits of liability,” said Van der Merwe.
“If you can only just afford the cost of a rig, invariably it is going to be a tight push to cover all of the other costs.”
He pointed out that the risk of not doing so would be losing work to larger operators.
