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New, ‘vague’ regulations set to address truck overloading, insurance dearth

23rd January 2015

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Do you transport, as a haulier or consignor, more than 500 t of cargo a month by road? If so, brace yourself for a raft of new onerous, but rather vague transport regulations, warns Norton Rose Fulbright South Africa associate Peter Lamb.

The National Road Traffic Regulations, enacted under the National Road Traffic Act 1996, have been amended by the Minister of Transport, as published in the Government Gazette Notice October 31, last year, with these amendments due to come into operation on January 31.

According to the new regulations a person operating a motor vehicle carrying goods on a public road must be in possession of a written declaration containing information on, among others, the nature and quantity of the goods transported; the contact particulars of the fleet operator; and also the particulars of every consignor and consignee of the goods carried.

In addition, the operator must be in possession of a written agreement between the consignor and operator for the transportation of goods.

The written agreement must state the nature of the agreement, the loading instructions, and the responsibilities of all the parties.

“The term ‘operator’ is not defined. We understand the operator to be the road haulier,” notes Lamb.

A consignee is a person who receives more than 500 t of goods a month transported by road.

A consignor can be understood to be the goods seller, adds Lamb.

Already there are a number of problems arising from the new regulations, he says.

“For example, the regulations assume that the time of entering into the contract to transport the goods occurs at the same time the goods are loaded.

“In practice, these contracts may be entered into well before the goods are loaded onto the transporting vehicle.”

COMPULSORY INSURANCE
Aside from carrying a written agreement with every load, the haulier must now also carry a schedule of insurance, notes Lamb.

Regulation 330D prohibits a consignor or consignee from transporting goods on a public road or accepting the goods unless “such transportation is fully insured for damages that can occur as a result of an incident”.

However, it is not clear what “fully insured” means, says Lamb.

He warns that the term is probably too vague to be enforceable.

“There are different risks involved with the transportation of goods. A road accident can cause damage to the carrying vehicle, the goods, road infrastructure, vehicles driven by other road users and pedestrians.

“If harmful substances are spilt on the road as a result of a collision, major damage can be caused to the environment.

“An accident can give rise to indirect damages such as economic loss caused by the delay of the delivery of the cargo.

“This list is endless and not every possible loss can be insured.”

Lamb suggests that carriers and consignors procure a reasonable degree of cover, considering the particular circumstances.

A cargo owner may have Goods-In-Transit (GIT) insurance in respect of his goods, and the carrier may have Carrier’s Liability insurance and motor vehicle insurance, for instance.

“The regulation does not distinguish which insurances the consignee or consignor is obliged to take,” says Lamb.

OVERLOADED VEHICLES
One of the issues the regulations try to address is overloading, which is to be welcomed, notes Lamb.

However, enforcement of these regulations may prove impossible.

The amended regulations demand that the consignor obtains from the operator a written submission as to the payload of the vehicle and the distribution of the load on the vehicle; have in place a method of determining the mass of a vehicle and any axle or axle unit of such vehicle; and keep a record of the mass of every load transported from his or her premises, explains Lamb.

In turn, the consignee is prohibited from accepting goods if the vehicle is not loaded and transported in accordance with the Act; and from entering into a contract with the operator to transport the goods if the vehicle is overloaded.

“These additional obligations are breathtaking when one considers what facilities a consignor would need to have access to in order to comply with these obligations; for example, weighbridges and other mass measuring apparatuses,” says Lamb.

Also, it is not clear how a consignee would know whether the vehicle is loaded in accordance with the Act, or what additional steps the consignee would need to take to ensure compliance.

COMPLIANCE AND PENALTIES
“Until the regulations are amended, we recommend that consignees and consignors comply with them as far as possible,” states Lamb.

The National Road Traffic Regulations Act states that any person who contravenes the Act will be guilty of an offence and, upon conviction, will be liable to a fine or to imprisonment for a period not exceeding one year.

The new regulations, however poorly drafted and difficult to enforce, mean that road hauliers, consignors, their brokers and underwriters now have to have written agreements in place, or face legal penalties, summarises Lamb.

“This means that they will have to have proper bespoke agreements or standard trading business terms, properly presented waybills and road manifests.

“Brokers advising clients and insurers are also going to have to peruse the insurance provisions set out in Regulation 330D and decide what products to offer,” he adds.

“In our view Regulation 330D is too vague to be enforceable. However, Regulation 330D is an indication of government’s intention to create a system of compulsory insurance on the transportation of goods by road. We recommend that brokers advise their clients to ensure that the goods owners have GIT insurance and that carriers have appropriate liability cover at the very least.”

Lamb believes most current agreements and standard trading terms would need to be revised in order to take into account the effects of the new regulations.

 

Edited by Creamer Media Reporter

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