South African road freight operators are heading into one of their busiest trading periods facing a difficult cash-flow equation. Diesel price hikes, rising operating costs and differing customer payment cycles are squeezing working capital just as Black Friday and festive-season demand put additional pressure on transport capacity.

According to Lula, the SME finance provider, more work does not necessarily mean more cash in the bank – particularly when transporters must pay the costs of moving goods long before customers settle their invoices.

Garth Rossiter, Lula’s Chief Risk Officer and Head of Credit, says November exposes the funding gap between the immediate costs of running a transport operation and the often lengthy wait for customer payments.

November brings Black Friday, year-end supply chain pressures and festive-season fulfilment into focus. This year, however, the seasonal rush comes against a backdrop of sharply higher fuel costs.

For owner-operators, fleet businesses, courier networks and last-mile delivery companies, the challenge is finding sufficient working capital to keep vehicles moving while absorbing higher costs and waiting for customers to pay.

The cost of moving freight comes first
“A transporter fills the tank, pays the driver and services the truck before the load leaves the depot, then waits up to 90 days for an invoice to be paid,” says Rossiter.

“In November, this cost pressure increases as volumes do and the amount the business has to pay out in advance increases in parallel. The busiest month of the year is also the month in which the business carries the most cost on its own balance sheet.”

Fuel is central to the problem. The Road Freight Association (RFA) estimates that it can account for around 35-55% of road transport operating costs, depending on the operation, route, vehicle and conditions.

For operators that pay for fuel upfront but allow customers to settle invoices on credit, every delivery creates a funding gap. The business must finance the movement of goods before receiving payment for the service. During the seasonal peak, additional deliveries also mean higher fuel consumption, vehicle wear, driver costs and toll charges.

Lula’s SME Pulse Report, published in May 2026, described fuel as the hidden tax on every item moving through the supply chain. For logistics businesses, that cost is particularly difficult to absorb when payment is deferred.

More freight does not necessarily mean more cash
The sector has had little room to absorb further cost increases. The Ctrack Transport and Freight Index rose by just 0.2% quarter on quarter in the third quarter of 2026. Road freight contracted by 2.7%, with Ctrack attributing the decline to high fuel and capital costs affecting demand.

In September, RFA chief executive Gavin Kelly said operators faced a choice between increasing their rates or drawing on diminishing financial reserves to protect existing customer contracts. Some have incorporated fuel adjustment mechanisms into their contracts to accommodate rapid price fluctuations without compromising longer-term commitments.

The problem for logistics SMEs is that a full order book can actually intensify cash-flow pressure. Contracts are in place and customers are liable for payment but the money has already left the business and will only return when invoices are settled. As peak-season activity gathers momentum, this gap can widen precisely when reliable delivery performance is most important.

Working capital keeps the wheels turning
“When a logistics business comes to us in November it is rarely because something has gone wrong,” says Rossiter. “It usually means the contracts are in place and the trucks are fully booked and the business needs the cash to run them until their customers pay. Funding at this point is a sign of a healthy business preparing for peak season.”

Asset-based fleet finance remains an appropriate mechanism for purchasing vehicles, but it does little to cover the day-to-day costs of operating them through a demanding trading period.

“Logistics businesses need working capital that can move at the speed of a delivery schedule,” says Rossiter. “Fuel is bought daily and invoices are paid monthly, so the funding sits in between the two – it is available on the day the tank needs filling and repaid when the customer settles.”

Lula says its assessment of logistics businesses considers cash flow, revenue-generating capacity and the way each operation trades. Contract histories and customer payment cycles also inform the assessment.

As a founding member of the South African SME Finance Association (SASFA), Lula says its approach to SME funding is guided by a code of conduct requiring transparency, fair treatment and responsible lending.

Funding ahead of the seasonal rush
Lula’s Cash Flow Facility is designed to address the timing mismatch between operating expenditure and customer payments, Rossiter explains. Structured like a line of credit, it has no monthly account or administration fees. Operators can draw funds for fuel, driver costs and maintenance as November volumes build, then repay as customer invoices are settled, paying only for what they use.

“The businesses that get through November well are those who arranged their funding in advance. Planning for the peak with the right funding instruments is part of running a healthy logistics business,” concludes Rossiter.

Editor’s comment: With diesel, maintenance, wages and tolls demanding immediate attention, operators need to manage the timing of cash as carefully as the movement of freight. In November, having trucks available and loads secured is only half the battle – having the working capital to keep them moving is the other. As such, Lula’s Cash Flow Facility deserves consideration.

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