Transport, freight industry needs urgent government intervention

Violent attacks against transporters are threatening the country’s future and the successful implementation of AfCFTA – and destroying lives.
Nine trucks were set alight on the N3 highway in a single day in November. Image: Christy Filen

Continuing attacks against transporters in South Africa threaten to derail the successful implementation of the African Continental Free Trade Area (AfCFTA) agreement that was again endorsed by African leaders at the recent African Union Summit. If order is not restored, the consequences could be catastrophic – not only for South Africa, but for the rest of Africa.

Transport is the ultimate enabler of both infrastructure development and trade. It serves many sectors of the economy such as manufacturing, health, agriculture, mining, consumer goods and food. It unlocks value chains and all of the job opportunities that come with these activities.

All economies depend on the movement of goods and people. By connecting areas of economic activity within a country and between African countries, transport increases access to much-needed markets and services. Transport provides the means for emerging markets and developing countries to integrate into the global economy. It is therefore a crucial aspect of the preconditions needed to make AfCFTA a success.

AfCFTA, an unprecedented growth opportunity 

The agreement intends to create a single continental market for goods and services, as well as a customs union with free movement of capital and people in the future.

AfCFTA creates the largest free trade area in the world measured by the number of countries participating. The pact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at $3.4 trillion [close to R50 trillion].

The World Bank report AfCFTA: Economic and Distributional Effects, issued earlier this year, notes that AfCFTA will significantly boost African trade, particularly intraregional trade in manufacturing. The volume of total exports could increase by almost 29% by 2035, relative to the baseline.

Intra-continental exports would increase by more than 81%, while exports to non-African countries would rise by 19%.

Implementing the AfCFTA will help lift millions of Africans out of poverty, spur wage increases and grow the economy of the continent by up to 3%. The benefits that South Africa – and the rest of the African continent – could derive from its successful implementation are numerous and far-reaching: increased trade, poverty alleviation, job opportunities, and greater economic inclusion.

In essence it offers an unprecedented, desperately needed, incomparable opportunity for the continent to become an economic force.

This will, however, only be achieved if there are efficient supporting services that allow African traders to take advantage of the preferential market access. Transport and logistics are arguably the most important factors in the short term.

Attacks against transporters derail growth

In South Africa, transport and logistics accounts for 11% of the country’s GDP – a staggering R480 billion. About 50% of the South African economy is made up of goods, with logistics a service that relates to the transport, storage and distribution of these goods. More than 80% of goods in South Africa are transported by road.

Over the festive and holiday season, the volumes of goods transported reaches its peak, as transport companies ensure that goods are delivered on time to consumers. With companies trying to recover from the devastating impact of the Covid-19 pandemic on business and trade, the unimpeded, free flow of goods within South Africa and to and from African countries has become crucial.

The unprovoked, unlawful and violent attacks against transporters in South Africa are, however, continuing. According to recent media reports, there were 84 attacks in November alone, and 35 trucks were burnt.

Billions of rands of precious cargo has been destroyed. In one day in November, nine trucks were set alight on the N3 highway – but not before the drivers had been attacked and their cargo looted.

This is pure anarchy, economic sabotage and a threat to national security.

Read: Protests disrupt, halt operations at cement industry transport companies

This cannot continue.

It is threatening the country’s future and destroying lives, companies, employment opportunities, economic activity, goods, vehicles, facilities, roads and foreign investment to move goods through South Africa into Africa. It will have far-reaching, devastating consequences.

The costs of these actions are not just borne by the transport industry but by all consumers who could face increased prices for goods in the future.

Government needs to take action

A resolution of the problem needs to become an urgent priority for government. It needs to take urgent action to protect its citizens and ensure their constitutional rights of freedom of movement and freedom to do business.

Membership-based industry organisations have worked tirelessly through various industry structures, met on numerous occasions with relevant members, been involved in the Ministerial Task Team created to deal with the problem, and forwarded proposals on how to resolve the crisis to government.

However, the measures required by government agencies have either not been taken or addressed urgently enough.

Action is needed. Now.

If not, the whole of Africa will suffer the ramifications for decades to come.

By the Road Freight Association, the South African Association of Freight Forwarders, and the South African Express Parcel Association.

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You have Alshabab running wild in Mozam. Cash in transit heists daily. Torching of trucks and general wholesale looting across the country. Unemployed immigrats from war torn countries who are tough as nails, grew up child soldiers, roaming the streets of SA. The answers to SA problems you dont have the stomach for.
How long before China opens a massive “military base” AKA enclave like in Djibouti?

Mad Max movies on our doorstep. You’ll have armed guards on trucks in future.

The anarchy in the transport industry is similar to the anarchy in the mining industry, the construction industry, the property industry, the farming industry, the marine industry, the airline industry, energy industry, and railway industry.

The zamma-zammas, construction mafia, illegal squatters on private property, stock thieves, abalone smugglers, SAA state-capture looters, illegal power connection and cable thieves merely follow the political incentives. Nobody wants to acknowledge the elephant in the room. Different political-economic systems incentivise certain behaviour patterns among the population. Rational individuals act according to incentives. Collectivism incentivises rational individuals to plunder the public resources at the maximal rate.

The current political-economic system in South Africa enables and rewards anarchy in general, and state capture and politically connected plunder in particular. Democracy is the best system in a free-market capitalist society where property rights form the basis of law and order. A collectivist society can only exist under the ultimate power of an autocratic ruler who enforces the rules in an inhumane and brutal fashion. When a communalist society follows democratic principles and embraces human rights, it implies that law and order will disappear. Such a society, that enables and rewards lawlessness, is unsustainable and will naturally trend towards civil war, hyperinflation of the currency and food shortages.

This is the reason why undemocratic China enjoys rampant economic growth, while democratic South Africa suffers rising unemployment and economic contraction. Both are communalist nations, one is an oppressive and undemocratic one-party state, while the other one is a constitutional democracy with human rights. The Chinese have learned from history. They understand, that the moment you give voting rights to a communalist, he will use that vote to plunder the economy. This is the critical design flaw in the South African economy.

No mention of the Authorities themselves, the SAPS and Metro services, as being a huge threat! When they are hungry and see a truck, it’s like a moving KFC outlet to them! They actually drive the truck driver to the nearest ATM in the Police car/van to draw the bribe money albeit nothing wrong with the truck or load in most cases!! It’s not Cool drink money either, margin gone money for sure!! I caught a driver who would phone the Cops and tell them he was close, then split the money, it’s turning into a fiasco!

I have just spent the last few months traversing the African continent(and EU all work). This is a severe problem everywhere.

It is all very well to identify this and report on it – but what is the cause of this rapidly accelerating problem? The elephant in the room – you can forget about ever seeing AfCFTA in operation it is a pipe dream for the intermediate future.

Africa has always been on edge, not usually as a whole but in specific hot spots or regions. In recent years Alshabab and Bokoharam (and other 1st world players) have taken advantage of these cultural, religious and of course economic tensions. South Africa has been in dire straits for some time and was in real trouble already in 2018/19. As Sensei points out the logistics industry is just the latest symptom to explode in this country.

There is a very worrying trend in that Africa as a collective is starting to unravel and South Africa with the largest most organised economy (relatively speaking)will be the spectacle on the continent in making headlines. For sure there is civil war in Ethiopia and international war threatens possibly between Ethiopia/ Sudan/ Egypt over the Grand Renaissance dam. Kenya and Somalia are sabre rattling and exchanging fire. So are Uganda/Kenya and Tanzania. Southern Tanzania is a powder keg feeding N. Mozambique and unfortunately their immediate neighbours which include us. The list is sadly endless at present.

These are not problems that have sprung up overnight, they have been about land, resources and economics for years and decades – but when economic times are tough these tensions always explode – what happens in a bad marriage when there is financial strife it breaks down immediately.

South Africa and Africa needs to abandon this idiotic notion that they can attempt to control a virus, with EU/UN/WHO sanctioned lock downs and ongoing severely curtailed economic operations. This is what has triggered mass criminal waves of theft and violence the continent over – you cannot push an extra 150+ million people below the poverty line without serious blow back. There seems to be this rock solid belief that when covid 19 is gone that all will be well and all will return to normal. That is impossible, some industries, businesses and jobs have been forever wiped out. Yes i still consider a lockdown any form of additional expense you have to incur that you did not 12 months ago. When we embrace the fact that life must go on and that covid is just another disease – the continent can get back to rebuilding – hell in most of Africa malaria takes more lives in a week than those countries have lost to covid in 8 months. Yet countries that rely almost solely on tourism have and are completely shut off still, thanks to idiots like Tedros/ Johnson/ Ferguson etc – at the moment instead of not just Africa emerging from 8mths of madness, we seem hell bent on going deeper the world over. I pity the Americans – it seems they have hard lockdown from the 21st January.

Further to this article – for many years it has always been a fact that when we transported copper/cobalt and other types of high value cargoes, we did and still do transport them in convoys of 10 usually only within SA borders – and in the very high value cargoes we travel with helicopter response/ surveillance – these trucks have largely been left alone as they know the likelyhood of success is low. However, with the lockdowns having driven 50%+ of small businesses under and at least 7-10 million additional South Africans much closer to abstract poverty – high value is no longer top of the pops – consumables are – am sure you have seen the video of baked beans being cleaned off a tort liner near Murchison. Consumables are the new gold – why target a R5m copper load that requires all sorts of sophistication and admin, when you can go for unprotected tinned foods/ mealie meal/ sugar/ oil etc – where a truck can be offloaded in minutes(by many hands) and distributed to ‘buyers’ long before the police respond – when they do – it often just looks like civilians finishing off the load – add to that the drivers and police are likely involved in many instances.

Trucks are burnt for a variety of reasons – namely you cannot just replace specialised trailers over night, evidence destruction, malice, frustration etc and one needs to look at which companies/ routes are being targeted and which ones are not – this is telling. There is a very high level war between syndicates and unions for spoils of what is a rapidly shrinking pie.

It certainly does not look like the police have a handle on things at the moment and now it is not unusual in some gun battles, that police task force are being seriously out gunned with better weapons and military grade ammunition. SA police need better management and to take the gloves off. 2021 is going to be one hell of a year globally for civil unrest and extreme violence – as the EU/USA also unravel and the lockdown chickens come home to roost. Africa needs to bat smart – Asia is not nearly as badly affected by lockdown as the west – if Africa can stop following their old colonial rulers economically suicidal advice – they can actually benefit from what will likely be one of the greatest commodity bull markets in more than 100 years and feed an insatiable appetite out of the east. With the Aussies and Chinese at loggerheads – SA should be going hell bent for leather to fill the gaps…

Very informative post. Thank you. I suggest you write an article on the topic to share your insights and experience with the Moneyweb community. Best of the festive season to you.

End of comments.

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