THE DEFINITIVE TRUCKING SITE



Past Issues

March 2008

PowerOutages     



While South Africa continues to reel under the shock of the on-going power debacle brought on by our politicians not listening to the Eskom experts many years ago, FleetWatch has noted that scant attention has been paid to the effect all this is having on the trucking industry. This is a grave error as unexpected and unbudgeted costs are being incurred which, eventually, will have to be passed on thereby fueling inflation even further writes Patrick O'Leary.

Given the absence of an effective rail system, the trucking industry has truly become the wheels of the South Africa economy - and when the wheels of the economy begin to cost more to run due to cost pressures outside of the industry's control, that is bad news for everyone.

And that is exactly what is happening in the industry due to the power outages that first hit the country in January and look set to continue for the next four to five years.

In a presentation titled 'Factors Affecting Road Transport Efficiency' given at the Alta Swanepoel Legislation workshops held last year, FleetWatch correspondent Max Braun pointed out via a cost example that the average ton-km cost of operating a 56 ton gross Interlink in May 2007 was 22.94 cents. "A 27.45% improvement could reflect a significant reduction to 16.64 cents a ton kilometer," he said.

While operators have been going all out to achieve such improvements, the unexpected power outages have, to a large extent, made a mockery of such efforts. Instead of achieving reductions in costs, operators have had increased costs forced on them via the multiple effects of the power outages.

What most politicians - and businesses in general - do not realize is that, as Transnet's Maria Ramos has said: "Transport is at the centre of the national effort to generate and sustain higher levels of economic growth." And yet, as Braun pointed out in his presentation, the thing that is most impeding truck transport efficiency is waiting, waiting - and more waiting. And this is what is happening to truckers all over the country as a result of the power outages. They are having to wait - and wait - in congested queues at non-functioning robots, at loading and off-loading points. This, among many other adverse inputs due to the outages, is adding to the cost of transport.

FleetWatch approached a number of companies for feedback on the effects of power outages on their operations - most notably during the 'Black Week' in January. The answers are quite shocking.

Grindrod Logistics
Mark Ackermann of Grindrod Logistics rightfully points out that the transport sector operates to serious deadlines where time is money. However, he says, with load shedding, loading and offloading of vehicles is adversely affected which causes huge delays. "During power outages, everything comes to a halt and millions of rands are lost."

In addition, Grindrod's vehicles normally refuel at the company's depots but with no electricity, the diesel pumps are non-operational. "This means our vehicles have to drive to different fueling stations which firstly, cause major delays and secondly, the fuel is more expensive per liter. As we also use the Total Route Africa cards, we can only refuel at certain refueling stations so everything compounds onto each other which is unacceptable in this, supposed to be, modern age. It feels as if we are heading back to the 'Dark Ages'.
 

"During power outages, everything comes to a halt and millions of rands are lost." 

Mark Ackermann,
Grindrod Logistics

He goes on to say that every transport company will suffer to different degrees because of the power outages. "Most companies have a switchboard that operates on electricity. They also have photostat machines, scanners, copiers and faxes that are of utmost importance in every industry. Every company is virtually fully computerized and all communication is lost. In our case, our head office is in Cape Town and we have branches all over. The connection between the branches is cut off during power outages." 

"I hope for all sectors, private and commercial, that there is a solution to this catastrophe and that certain individuals who are put into positions that they know absolutely nothing about, will step down and let the knowledgeable educated, experienced people run the show."
 

A sign of the times...
a generator now
guarantees ongoing
power for businesses

Parmalat
Frans Haasbroek of Parmalat says the power problems have hit the company hard.

"We ship product in tankers and when we arrive at customers and their power is off, we cannot offload or load because their offload pumps are not working. And then, sometimes when we do offload, the power fails and we must wait because we cannot clean the tankers inside. Also, if there has been a power failure, some of the factories have to wash their equipment before they can start producing again. All this causes major problems and our tankers stand for hours to offload. This causes major delays and we cannot service customers properly."\

Haasbroek says Parmalat also ships a lot of milk and in some instances, they have had to reroute tankers to other factories in other towns to avoid product going sour. Like Grindrod, Parmalat has also experienced problems refueling the vehicles.
 

Traffic congestion -
partly as a result of 
power outages - 
has resulted in 
increased driving
times - by up to
two hours -
between Rosslyn
and the coast.

Jeff Hosking,
General Manager
Consolidated Freight North

Bearcat Tires
“Power outages cause curing problems and we cannot always honour our lifetime guarantee. This results in replacing tyres at no cost.” says Peter Knight, Bearcat Tires. 

Global Carriers
Yustine Brynard of Global Carriers says that apart from problems such as the fact that all maintenance work in the workshops comes to a complete halt during an outage, they have found that trucks do not leave on time meaning they then arrive late at loading points and have to overnight in front of the gates. "All this amounts to huge losses in terms of minimum income," says Brynard.

The company has also had to replace equipment damaged by power outages including a plasma screen for the C-track system at R42 000 as well as a switchboard system at R23 000. In addition, the power supply on the 23 computers used in the business have been replaced twice in the past six months.

With approximately two to three hours of complete darkness every day during the 'Black Week' in January, administration staff fell more and more behind with their task and , like Grindrod and Parmalat, trucks could also not refuel.

And here's one that other transporters should take note of. "Our scheduled renewal of annual licenses has to be done much earlier due to unpredictable electricity supply. They simply send you back because, if they don't have electricity, they can't issue the new licenses. If you're late, you pay huge penalties," says Brynard. 

Teague Distributors & Golden Victory Logistics
Megan Orr of Teague Distributors and Golden Victory Logistics says they have experienced many problems due to the power outages in their business.

"Our daily running of trucks needs constant communication with customers in terms of load orders which is vital for a load to be collected at the correct address. Diesel records on a daily basis are also imperative to keep an update of filling up and without power, our computer systems are down which means all of the above is affected for hours on end which leaves our business in dire straits."

"Also, the lack of telephone lines once the batteries have given up means customers cannot get through on our telephone lines and we lose business. This is a disaster for our industry," says Orr.

Consolidated Freight North
Jeff Hosking, general manager of Consolidated Freight North, says the situation arising from power outages is causing havoc in the industry sector in which his company operates, which is mainly supplying motor components on a "Just-in-Time' basis to the OEMs nationally.

On the one day, DaimlerChrysler SA East London - now Mercedes-Benz South Africa - closed its plant due to no power. "In addition, OEMs can't receive components into their warehouses which is a further on-cost to us as we have to re-deliver the next day - and then only if the power is on."

We all know about the horrendous congestion problems in Gauteng and on this point, Hosking says that due to the traffic congestions between Johannesburg and Pretoria, driving times have increased by two hours from the coast to Rosslyn, 

"This has resulted in an increase in diesel usage and our local distribution and collections are late due to traffic congestion," he says, adding that these are but a few of their daily problems which will help to put the brakes on.

Bearcat Tire
Peter Knight of Bearcat Tire says although his company is not in the trucking field, Bearcat Tire is the largest and oldest solid tyre manufacturer in the country and reports that the power outages affect them in two ways:

  1. We have lost a number of blanks due to the power cut off happening when we are loading green slugs resulting in us not being to close or reopen the presses which results in a total reject of the tyre.

  2. Our boiler loses its head of steam and when the power comes back on, it has to rebuild the head in order to get the correct temperature to the presses to cure the tyres. We have no idea as how much extra time is required for a complete cure resulting in either an over cure or under. Both cases can cause a failure and as we offer a life time guarantee, this has resulted in us having to replace tyres at no charge.

ERT Trucking
Robert de Kramer of ERT Trucking says that he too is seeing cost being added to his business - and here is an interesting one which few people will think of.

"Being a small operator of five trucks I had, during the week 28 January 2008, a driver stuck in Cape Town not being able to load as the company had not finished manufacturing due to power outages. The end result was that I had to pay for him to stay in a lodge for the week.

"Nobody could move around and all was at a standstill for the entire week. Other loads had to be cancelled and all this takes a substantial amount out of the tight monthly budget! Needless to say, I eventually had his wife contacting me as well, asking when her husband is coming home. A week from hell was not pleasant."

Given all this, if Eskom's load shedding continues in the haphazard way it has in the past, the trucking industry is going to suffer many adverse impacts, all of which are going to add to the cost of transport. It will be asking too much of the industry to simply absorb these costs. They will have to be passed on.

President Thabo Mbeki warned in Parliament recently that the price of electricity will increase. What this means is that we're now facing added cost when the electricity is on and, as can be gauged from the above comments, added cost when the electricity is off. That sounds like an inflationary spiral to me.

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