Road freight industry facing rising costs

The association's spokesperson Gavin Kelly said the next couple of months would provide pointers to the resilience of the economy as world markets decelerate.

Kelly said the industry had so far endured 2011 with some mixed feelings.

"The beginning of the year saw a number of operators experiencing severe commitment stress such as the meeting of obligations towards asset-based financial commitments as well as having to face volume drop on existing contracts, as manufacturing slowed and the resultant consumer leg of logistics shrank," he said.

"There were some who had to close their doors - others had to down-size or curtail less profitable operations. In some cases staff was placed on shorter working weeks or were asked to take leave."

Kelly added however that the first half of the year saw more positive sentiment among operators than real economic recovery. "The sentiment is that we seem to be at the very least on a plateau at present and not still involved in a decline."

Coface SA industry analyst Jayson Naidoo said the lower than expected economic growth rate of 1.3% in the second quarter of 2011 would affect the freight industry because it was linked to all other industries in the country requiring transport of goods.

Naidoo said freight forwarders were expected to see two negative impacts from the tolling. The first was an increase in the cost of transporting goods on the Gauteng highways, which Coface SA does not expect the freight forwarders to be able to absorb.

"As a result we expect this cost to be pushed on to the companies moving the goods. We expect a knock-on effect from this with freight customers consolidating deliveries to save costs," Naidoo said.

Kelly said the past month had seen steady increases in fuel prices, which had a tremendous impact on operations, but the strong rand would help to cushion the blow.