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.”