Peter Southwood, who runs haulage businesses Southtrans and Tip-Trans, had been badly rattled by a violent attack on his trucks the night before he sat down to talk to the FM.
“Last night, I had a truck that was [stoned] and the damage is around R100,000,” he says. “I saw on the [truck’s] cameras, the police just stood by doing nothing. I don’t know whether they’re not allowed to do anything, or don’t want to do anything.”
Southwood’s businesses aren’t a piffling operation either. He’s been in business for 35 years, with customers that include global giants such as PepsiCo. In all, his trucks haul more than 1,000t of commodities a day.
The bad news is the attack wasn’t a freak incident. “Co-ordinated or targeted attacks against road freight vehicles [increased] from 6,500 incidents in 2009 to 21,000 incidents in 2023,” Road Freight Association (RFA) CEO Gavin Kelly tells the FM.
It makes the industry an easy target for criminals, as greater numbers of trucks take to our roads to mitigate the country’s logistics snarl-up, caused by an inept and inert Transnet.
The slow implosion of South African industry, circa 2023, is a tale with Transnet at the centre. It used to be that Transnet Freight Rail was the go-to for companies, particularly mines, to carry cargo around the country and to ports.
But thanks to rampant mismanagement and an ineffective response to protecting its rail lines from thieves, freight volumes have plunged.
In 2017 it carried 219Mt. This had fallen by a third 149Mt last year. A decade ago, it carried 210Mt. And, even when it does work, the service is patchy and unreliable: last year, the general freight which Transnet carried arrived, on average, more than seven hours later than expected.
By the Minerals Council’s estimate, this means R30bn in lost coal export revenue just last year. Former Transnet CEO Portia Derby, who quit last month, had a thousand excuses, but experts weren’t buying any of it.
“Only about 20% of the lost tonnages were due to cable theft and electricity disruptions on the coal rail corridor,” the council’s chief economist, Henk Langenhoven, said earlier this year. “The bulk of the explanation lies with inefficiencies on rail and in the ports.”
The economy had to fill the hole. And it did this by putting more trucks on the road. A year ago, then transport minister Fikile Mbalula said that road freight transport had grown 48% over the past decade, with trucks now making up 34% of all the traffic on the N3 highway connecting Joburg and Durban.
That’s an estimated 3,000 trucks on our highways at any one time. And while it may seem good for truck owners, it’s less profitable for everyone else, as experts say it costs 40% more to carry goods by road than rail. Transnet’s delinquency is hurting everyone.
Southwood says the cost of a truck, to transport agricultural commodities to a port, is about R2.2m, which rises to R3.2m if there’s a trailer needed.
But as the attack on his truck shows, this shift to using trucks to carry the country’s goods has opened up a new, and grisly, front.
It’s no coincidence that the July 2021 riots, which cost South Africa R50bn and did immeasurable damage to its reputation as a safe haven for investment, began with truck burnings, ostensibly as a protest against “foreign” truck drivers.
There have been several flare-ups since, most notably last July, when 20 trucks were torched on the N3 between Joburg and Durban, the N1 to Limpopo and N4 to Mpumalanga — acts which President Cyril Ramaphosa described as “economic sabotage”.
Kelly said at the time this was a co-ordinated attack, adding that “without trucks, South Africa stops”.
He warned that global firms would opt to ship goods from Maputo rather than Durban’s port. As he put it, traders are saying “we are not going to move stuff through South Africa because the risk is too great, the delays are too long in the ports, and the inefficiencies are costing us too much.”
In other words, with rail no longer a reliable option, the last thing South Africa can afford is for trucks to also become a casualty of the country’s slow descent into lawlessness.
Trucks burn while police doze
It’s clear that Transnet’s failure has laid bare numerous socioeconomic faults — not least bubbling xenophobia against foreigners, who are being blamed for taking trucking jobs in a country with unemployment of 31,9%.
Pressure groups are open about their agenda. The All Truck Drivers Forum (ATDF) proclaims proudly on its Facebook page that its goal is to “unite to save our jobs from being taken away from us to the foreign nationals”.
ATDF secretary Sifiso Nyathi said in a TV interview that truck owners should “apologise to the people of South Africa”, get rid of all foreign truck drivers and “employ South Africans” — or protests would continue.
These tensions risk fuelling the sort of xenophobia that has led to sporadic incidents in townships, with economic resources as the fulcrum.
Nyathi argued this is “not xenophobia” — but it doesn’t help his argument that several members of his forum have been linked to the torching of vehicles.
Five members of the ATDF were arrested for the wave of burnings earlier this year. They appeared in the Ermelo magistrate’s court in September on charges that included attempted murder and malicious damage to property.
A leaked crime intelligence report, published by City Press, described how the conspirators stopped trucks and demanded to see identity documents. “South African drivers were let go, while foreign drivers’ trucks were burnt,” the report stated.
There’s a clear political element to this. The ATDF was outspoken about the jailing of former president Jacob Zuma in July 2021 for contempt of court, saying he’d been “incarcerated without trial”. The truck burnings began soon after.
Whether this threat led policymakers to contemplate walking back rights for foreign nationals is unclear. However, Nyathi has spoken of how his forum has “engaged” extensively with the government, which later decided to terminate the Zimbabwe exemption permit, which allows 178,000 Zimbabweans to work in South Africa.
In June, the Helen Suzman Foundation clashed with home affairs minister Aaron Motsoaledi in court on this matter, and was vindicated when the court ruled that the decision to terminate the permits was “an unjustifiable limitation of rights”.
Legally, truck owners are fully within their rights to employ Zimbabweans. On the ground, however, the threat of violence has had a chilling effect, as some haulage firms have begun laying off foreign drivers.
In one case involving a company called Image Logistics, the Zimbabwean Exemption Permit Holders Association and 11 drivers filed a case interdicting the company from firing them, according to Moneyweb.
“It’s very unfortunate to have xenophobia as an issue,” says Peter Mountford, CEO of the JSE-listed haulage company Super Group.
In Super Group’s 2022 annual report, it listed “xenophobia” as one of the risks to its business, and said its “mitigating actions” included “employing South African nationals in South African operations”, as well as “workplace education”, and working with the RFA to find a “sustainable solution.”
(Among its risk factors, Mountford’s company also listed “criminal syndicates”, and attacks on vehicles and drivers as part of “social unrest”. Kelly adds to the list: industrial sabotage and road rage.)
This illustrates that, for many truck owners, the risk of damage to vehicles is just too great — especially as the police do little to hold people to account for this damage.
"[There are] little to no consequences for those who perpetrated violence, attacks or murders, [and perpetrators] have not been arraigned or given penalties,” according to the RFA’s Kelly.
Erik Fourie is a trucking veteran who has been in the haulier business for nearly two decades. He tells the FM “the security situation is very bad”.
“I had two incidents within two months where trucks of mine fell and the police weren’t available to protect the loads. In both cases, looters stripped the trucks of the freight, tyres and batteries.”
And that’s before you even consider a disturbing spike in truck hijackings in recent months, as revealed by the latest police crime statistics.
In the three months to July, 499 truck hijackings were reported, a 76% increase on the 283 cases from 2019 (pre-Covid). Equally, in the three months to April, 435 truck hijackings were reported — 77% more than the 245 of 2019.
It’s become so bad that truck drivers can’t afford to stop overnight next to the road.
“When trucks overnight next to the road, diesel pipes are cut and the fuel is stolen,” says Fourie. “These days you must book a spot at a truck stop to secure your trucks. And this costs money too.”
Roads to ruin
Anyone who has driven on the KwaZulu-Natal north coast in recent months will have seen the fallout from Transnet’s failure: kilometres and kilometres of trucks, queuing for days at a time, on the turn-off to the Richards Bay export terminal.
It shows how Transnet’s failure has spawned a cottage industry of truckers. But the country’s financial squeeze has hurt even these new operators, as the weak rand has caused fuel prices to spike.
In November 2018, a litre of 50ppm diesel would set you back R16.20. Today, five years later, it’s R24.40 — a 50% jump — and this has fed into freight rates.
“Whereas tariffs from Bloemfontein to Alberton were R350-R420/t five years ago, it is now R653/t,” says Fourie.
He says his company’s profitability took a knock, as much of the costs couldn’t be passed on. “Our freight tariffs were always negotiated annually. So you fixed your tariffs for a year, and it didn’t change. But last year, as the diesel price started fluctuating quickly and you couldn’t keep up with it, we told customers we can’t work [with fixed tariffs] any more.”
Many customers didn’t like the switch from a fixed per-freight tariff to one with a shorter guaranteed period.
Southwood, whose trucks gobble about 200,000l of diesel a month at a cost of about R4.8m, agrees with Fourie.
“If the diesel price jumps by R1/l in a month, it immediately costs me R200,000 a month extra,” he says. “Recently, it jumped by R5/l in a month; that’s R1m out of my budget for that month. I can’t pass the price through as I have to wait until the quarter has passed.”
In the meantime, he has to carry the financial burden. “You can’t tell [customers] you’re transporting their goods, for example, R100/t this month, R120/t next month, and then the fuel price declines, so you can charge R70/t the next.”
The other big issue for hauliers, and for every other motorist on the road, is that as 3,000 trucks pound our highways every day, our roads are deteriorating. Truck drivers tell horror stories of navigating a moonscape of badly potholed roads to get to mines or remote areas.
As Kelly explains it: “Slowly but surely the road network not controlled or managed or maintained by [national roads agency] Sanral is collapsing. There have been some attempts at road maintenance, but not enough and not in time to deal with repairs — the roads quickly become a total rebuild operation.”
Haulage firms moan about this, arguing that they’re paying hefty licensing fees, which should be used to keep the roads navigable.
Fourie says it costs R25,000 a year to licence a 30t truck and trailer, with licences for abnormal load trucks exceeding R45,000. “And there are the toll fees, which are usually double the amount for light and passenger vehicles,” he says.
In theory, provincial governments use the licence fees to maintain the roads; in practice, that money is going to pay bloated bureaucratic salaries, so the potholes get deeper, and the roads more unusable.
And the broken roads mean higher vehicle costs too, pushing up the cost of doing business.
Southwood explains that there are 26 tyres on a large truck and trailer, with the price of a single tyre about R7,000. When roads were still in good condition, a tyre could be changed every 100,000km, or roughly once a year.
“Nowadays, we need to change two or three tyres every month,” he says. “That tyre, which costs R7,000, hits a pothole and gets a crack. It may not burst today or even next week. There is nothing you can do with a tyre that got nicked.”
It’s pushing up the cost of doing business in other ways too. “Maintenance, repair and tyre management have doubled over the past 10 years in terms of bottom-line expense,” says Kelly. “This creates revenue depletion but, more importantly, longer transit times, more downtime of vehicles in maintenance and repair, either larger fleets to cover inoperable vehicles or the reduction in business to what the fleet can accommodate.”
Big cost to the economy
All of these issues — Transnet’s failure to provide a reliable route-to-market for exporters, inept or corrupt policing, and a low-level war against trucks and foreign drivers — have major implications.
One frequently ignored risk, says Southwood, is food security.
“Our trucks transport maize to the mills — white maize for human consumption and yellow [maize] to feed cattle, pigs and chickens. When the truck is damaged, it stands still for a week to be repaired and doesn’t generate revenue. There you easily lose more than R100,000 a week,” he says.
Everyone loses here — creating real cracks in the food pipeline.
If you want a sense of what South Africa stands to lose, consider that the road freight economy clocks in at R15.8bn a month — the value of the 73.9Mt of goods moved in August. Of this, 37% was made up of mining commodities, 7.5% was agricultural commodities, and 13% was food and beverages, with a wide assortment making up the rest.
Elna Moolman, economist at Standard Bank, says the weakening rand isn’t going to make it easier for truckers any time soon. The exchange rate would hit food and fuel prices. “It’s quite a large impact as fuel is one of the biggest inputs in [agricultural] commodity production.”
Over the past five years, fuel prices have risen by about 50%, and it’s no coincidence that food prices have risen by 40% over that time — outpacing the 28% gain in inflation. For this reason alone, anything that gets Transnet operating properly again, allowing food producers to rely less on trucks, will help.
Much depends on what happens to the oil price.
Anchor Capital analyst Casey Delport says the “severe escalation in the long-standing conflict between Israel and Hamas carries the ominous prospect of escalating into a broader regional Middle East conflict, potentially involving major oil-producing nations such as Saudi Arabia and Iran.”
Still, signs that higher interest rates are keeping a lid on prices are evident: the German economy shrank in the three months to October, as consumers reined in spending. If other countries follow suit, this should keep oil prices in check.
With Transnet not likely to be fixed any time soon, that’s good news for thousands of South African companies that have been forced to rely on trucks to haul their produce around the country, and to the ports.
For people like Southwood, however, that’s only a small part of the battle to stay in business right now, with attacks on his trucks an increasingly bigger worry.
“Somewhere I need to make the R200,000 back that I lost with the stoning and looting of the truck last night,” he says. “But that is the South Africa we live in.”
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