TFR rates unchanged by fuel price dive

If you are thinking you are just about to benefit from dropping rail rates because of the plummeting oil prices, think again. Transnet Freight Rail (TFR) is a massive user of diesel fuel in the SA freight transport industry, but it is not about to immediately cut its rates – despite oil prices having been slashed by some 60% since last June. “This is certainly built into our cost structure,” said spokesman Mike Asefovitz, “but things are just too volatile at the moment to look at adjusting prices.” He also told FTW that most of TFR’s business was contract-based. “And it’s too early to start thinking about re-negotiating these.” Another point made by Asefovitz was that TFR was also highly committed to electricity as a locomotive and equipment drivingforce. And that, he said, was not just doubtfully available, but also getting no cheaper. Something that adds to the rail operator’s costs, and hedges their thinking on rates reductions. Not that it’s forever. If current oil prices are sustained, then TFR’s thinking could change. “Given a bit of time,” Asefovitz said, “we’ll be able to see just how the oil prices pan out. Then we may be able to think about prices.”