Rough road ahead for VUCA-plagued trucking industry

20th November 2020

Rough road ahead  for VUCA-plagued trucking industry

DRIVING LEGITIMACY Road freight operators should transport efficiently, safely and refuse to operate in non-sustainable circumstances

It is going to take at least five years for South Africa’s economy to recover from the impact of the Covid-19 pandemic, says Road Freight Association (RFA) chief executive Gavin Kelly.

“There are numerous and complex challenges that lie ahead for trucking operators in our new ‘volatile, uncertain, complex and ambiguous’ (VUCA) world. To fight these effectively and efficiently, membership of a trade association such as the RFA is a business imperative.”

He adds that, over the coming years, there are six main obstacles that road freight operators will face; with the first being reduced markets as the industry faces reduced demand for transport of goods. This is owing to consumers leaning towards purchasing less and less.

Secondly, higher transport – energy input or alternative energy – costs.

Thirdly, increased costs in maintaining personal barriers or protection against Covid-19 and preparing for whatever other pandemic may be around the corner.

Fourthly, Kelly highlights competition from e-commerce platforms as these will undermine conventional retail models and open up opportunities for the parcel/courier industry. This, in turn, will affect large retail logistics chains and conventional retail models.

The fifth obstacle, he says, is labour demands. “There will be continued pressure for increased or maintained wage and benefit levels, which will not be sustainable going forward.”

Lastly, he notes that the continuous pressure to cut costs will also plague the industry. As such, automation and the Fourth Industrial Revolution will definitely change current operations and transport methodologies.

Most operators will simply not have the capacity, expertise or resources to deal with the variety and complexity of these challenges, says Kelly.

As such, the RFA has the network, the knowledge and the know-how to inform and guide members through these VUCA times.

Future Plans

Further, with a constantly changing environment set to continue well beyond the pandemic, there are some practical steps road freight operators can take to ensure some stability in their operations.

“This new, unpredictable, disruptive way of doing business is going to be with us for some time, so companies need to adapt – and they need to do this quickly,” says Kelly.

He adds that there is a long, rough road ahead and those operators that survive and thrive are going to be those that can access the benefits of strong trade associations such as the RFA.

Kelly points out that, as an association representing the industry, the RFA is able to leverage its strengths for the benefit of all its members. This includes lobbying on matters affecting its members, such as labour and legislation, and even negotiating better rates on big budget items such as fuel, legal advice, insurance and education and training.

“Access to information and networks is the key reason that many operators sign up for membership. The RFA is the information hub for the trucking industry and members are often amazed at how quickly we are able to respond to requests for information and advice. As an industry we are definitely stronger together and we need to work together.”

Since its establishment in 1975, the RFA has played a vital role in assisting trucking companies through turbulent times, says Kelly.

The onset of the Covid-19 pandemic, however, has meant that operators have had to deal with far more challenges, in a shorter space of time.

To deal with these challenges, he encourages road freight operators to continue following the prescribed Covid-19 health protocols published by the association.

Additionally, the association urges operators to ensure that they are registered with the National Bargaining Council for the Road Freight and Logistics Industry so that they can benefit from the significant assistance packages that the RFA has made available. This will assist in aspects such as paying workers and will keep businesses going during the dry spell.

Further, Kelly advises companies to monitor their expenses to make sure that they cover the important aspects of the business. Cutting maintenance costs for example, is not a wise approach, he warns.

Meanwhile, he notes that during this time, businesses should play a role in identifying corrupt practices.

Moreover, he stresses that road freight operators should transport efficiently, safely and refuse to operate in non-sustainable circumstances. For instance, companies should ask a decent price for a decent service offered, he says, and not accept anything that is sub-standard.

“Our members have access to the RFA’s team of experts – covering labour, technical, legislative, operational and many other matters,” he explains.

Kelly encourages trucking companies of all sizes to join the association and concludes that being a part of a membership-based organisation such as the RFA is now more important than ever.