State of the road transport sector in SA unpacked

27 May 2016

South Africa economic growth outlook for 2016 is the lowest forecast on record thus far, standing at 0.7%. With next year's growth rate revised from 2.1% to 1.8% by the International Monetary Fund (IMF), it does not bode well for the transport sector. Economic challenges coupled with transport challenges, including volatile fuel prices, toll costs, and stricter carbon requirements, will continue to hinder business growth. This according to Brendan Horan, MD for MiX Telematics Africa.

falco via pixabay

“Following the recent RFA convention we attended, it’s clear that road transport operators will need to do things more efficiently, while improving driver behaviour and safety, in order to ensure sustainable businesses,” says Horan.

Building and maintaining suitable transport infrastructure is one of South Africa’s greatest challenges. Government has budgeted approximately R229 billion for transport and logistics infrastructure over the next three years. However, with carbon taxes still on the radar and the Department of Transport’s drive to move freight to rail in order to reduce emissions, as well as the increase in truck hijackings, the industry is under severe threat.

Road safety and driver management

According to the International Transport Forum, South Africa is ranked the worst out of 36 countries in terms of road fatalities, costing the country over R300 billion every year, with the majority of vehicle accidents being caused by irresponsible driver behaviour.

“Whilst the number of truck accidents is lower than light vehicle accidents, an incident with a heavy vehicle has a far greater impact,” says Con Roux, commercial manager at N3 Toll Concession. “There are an alarming number of accidents every year on the N3, causing lane closures which delay road traffic. The impact of this is longer turnaround times, reducing overall supply chain efficiency and operators’ profitability.”

“In an economic downturn, companies need to invest in telematics as it will have a major impact on the bottom line. For example, it can reduce the fleet size by 12% to 30%, reduce maintenance costs by 15%, reduce accidents by 70%, as well as reduce fuel costs between 7% and 15%. Most importantly, telematics data can assist operators to effectively manage their drivers with real-time monitoring of driving behaviour. This reduces the risk and cost of poor driving habits, helping to contribute to safer roads,” states Horan.

Other key factors

Other key factors impacting the performance of the industry includes rising inflation and the power of collective bargaining, as well as key issues related to the lack of skilled drivers and regulatory compliance.

“The collective of these issues simply means that businesses need to get smarter about the way they manage their operations. They need to identify key areas of risk and implement fleet telematics solutions that enable them to improve operational efficiencies. Solutions that offer integration with existing systems, for example, fuel systems, will further optimise the fleet management process. In challenging times, businesses need to make highly informed business decisions, and telematics data is vital to ensuring that fleet operators can remain profitable in spite of adverse operating conditions,” concludes Horan.