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South Africa’s road freight transport depicts decrease

South Africa’s major logistics companies are finding the weak economic climate to be a major challenge, with a slowdown in manufacturing and mining production and consumer spending resulting in pressure on volumes.

The Statistics SA Land Transport Survey shows that the seasonally adjusted volume of freight transported by road increased by 9.5% in 2018, but decreased by 4.3% in the first quarter of 2019. Industry role players indicated that escalating fuel costs and a poor economic environment have placed pressure on customers and eroded margins.

The sector is affected by numerous cost increases including fuel prices, the Road Accident Fund levy and carbon tax. Delays at ports and border posts could have a significant impact on logistics costs.

Additional costs include vehicle tracking and tracing systems, warehousing and distribution operating costs, municipal charges, escalating electricity costs, costs of compliance with legislation and standards and a proposed waste tyre recycling levy.

Variable costs, or costs that can be controlled and reduced by operating and maintaining the vehicle professionally, represent 55% of a vehicle’s total operating costs.

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