An internal memorandum to staff of Massyn Vervoer which was leaked onto social media has caused huge confusion with most reading it as an announcement of the company closing. This is not true. Massyn Vervoer has not been put into liquidation. It is not being sequestrated. It is not closing. Rather, a management decision has been taken to close the tautliner division – the long haul division – of the company only. The other divisions will remain open. The decision, however, is significant as it acts as a huge wake-up call and a warning to all in the industry and indeed, to the country as a whole that all is not well in the long haul sector. This 40-year-old highly successful company has not failed. Rather, the environment in which it operates has failed the company and is failing the industry as a whole writes Patrick O’Leary.
The Memorandum – dated March 24th 2022 and signed by MD Frans Massyn – was headed ‘Notice of Sale and/or possible ceasing of operations’. The copy read as follows:
“It is with a heavy heart and deep regret that I have to inform all staff that we have taken a decision to cease our entire logistics operations within the Republic of South Africa. This is mainly due to market conditions in the road freight industry, the vandalism and damages we experience and the overall challenging South African economy.
“There is a potential buyer, however, no confirmation has been forthcoming. In the event of the company being sold, we will consult all staff in terms of the transfer.
“If no sale agreement is reached, we will cease operations effectively 30 April 2022. All statutory monies such as severance pay and National Bargaining Council for the Road Freight and Logistics Industry (NBCRFLI) entitlements will be paid to each employee. May I thank all of you for your loyalty and hard work over the years.”
Certainly, the notice should not have been leaked into the public domain but it was and as we all know, once anything is out on social media, it runs like a river in flood. And when that river flows, things get distorted and misread. That said, given the heading and some of the wording in the Memorandum, it is perhaps understandable that one would come to the conclusion that the company was closing in its entirety. However, this is not the case.
What is the case here is that management is basically ‘gatvol’ – that’s my, not their word – with the overall conditions and environment in which the long-haul division operates; conditions that have contributed to the business model becoming unsustainable. The decision was thus taken to close that part of the business in a structured and dignified way that leaves no loose ends and ensures that staff are looked after and ethics are retained rather than wait for it to all collapse in a mess.
There is a huge warning here that brings home the reality of what FleetWatch has been cautioning of for ages. What Massyn Vervoer has done serves as a heads-up to all in the industry – indeed to the country as a whole and especially to those customers who are acting as ‘bully-boys’ driving down rates to the point where ‘Best Practice’ transporters are unable to survive. The reasons will resonate with many long haul operators.
Massyn Vervoer is not a fly-by-night operation. It is a highly respected family run business that has been in existence for 40 years with many of its drivers and other staff having been with the company since its inception. It also strives for Best Practice in offering a quality transport service and to this end, is an accredited RTMS (Road Transport Management System) operator. But, it can no longer reach the high levels of standards it has always operated to. Why? Well, read what Bettie Massyn, wife of founder Frans Massyn and financial manager of the company, has to say.
“We’re facing price increases on every front. Fuel is the obvious one but there are others. Tyres are up by 14%; the price of trailers is up; wages are up; toll fees are up; insurance is up; everything is up and yet, apart from our diesel increases which we are able to recuperate, we can’t recoup any of those increased costs. Why? Because customers are demanding reduced not increased rates which means we have to carry the increases. This has resulted in our margins shrinking to unsustainable levels,” she says.
As an example, she cites a trip from Johannesburg to Cape Town as costing R23 000. That’s the raw costs for an interlink rig. “Everyone is paying the same costs and yet, when you put this in front of some customers, they want to pay R19 000 for the trip. That’s R4 000 below our costs. We can’t keep our wheels running to RTMS quality standards at cut-throat rates. It just does not make business sense. At best, if we add a margin to our costs, we will make around R3 000 on that trip which is way below what it should be and yet we are expected to come in at R4 000 below our costs meaning that we are expected to do it at a R7 000 loss per trip.”
Massyn contends that some blue-chip companies have become bullies to transporters. “I’m sure they look at their financials and identify transport as being a big expenditure so they demand that the transport rates be cut. They improve their profits margins by eroding the transporter’s margins. And on top of this, they then stretch their payments to between 60 and 120 days – interest free. So in essence, the transport industry has become the largest interest free bank in South Africa.
“By doing all this, they are killing the transporters and we are just not prepared to go on like this anymore. We cannot go on like this anymore,” she says.
And it is not just the unrealistic rates and slow payment that has led to the decision. On-the-road risks and the overall toxic climate in which transporters are operating has also added to the woes.
“The poor state of the roads are incurring extra costs via, for example, tyre damage caused by the numerous potholes all over the country. We don’t carry spare tyres as that is the first item to be stolen by criminals so we contract a service provider to do on the road repairs. This is yet another cost both in terms of lost time as well as paying the service provider.”
In the Memorandum, it states that apart from the market conditions in the road freight industry and the overall challenging South Africa economy, it is also due to the vandalism and damages experienced.
FleetWatch has noted on some of the social media posts where the Memorandum has been circulated that people are commenting on this part of the statement as being related to the truck attacks we have seen over the past conducted by the ATDF. Not so. Certainly the truck attacks have added to the toxic environment of risk but in this case, the Massyn Vervoer example highlights the negative impacts of criminality that transporters and drivers are facing every day. It’s not just the truck attacks.
Criminality is rife
“Criminality is rife in the industry and trucks are easy targets for the criminals,” says Massyn. “Our drivers are only allowed to overnight at truck stops but even there, where you feel you will be safe, criminals are active. They cut the tarpaulins to check what’s on the trucks and if the goods are easy to dispose of, they steal the load. The Eastern Cape is particularly bad where criminals jump onto the trucks when they are moving up a hill and steal the loads on the move,” she says.
Another worry linked to the criminal activities taking place is the safety of the drivers. “Drivers are scared nowadays and we are no longer prepared to put their lives in danger. They get caught up in protest actions and can’t stop for fear of being attacked.”
As is well known, hijacking is also on the rise where drivers’ lives are under dire threat. Just last week, a truck driver was killed by hijackers on the N3. In another incident in the same area, a truck driver shot and killed two criminals who attempted to hijack him. The driver lived to tell to tale but he should not be put into such circumstances. He is a truck driver for goodness, not a special forces SAS-type military man.
Stopping at lay-byes on the side of the road has also become dangerous with many drivers being attacked and mugged after stopping to rest. Beaufort West on the N1 is a hot spot for such attacks. And because they can no longer take periodical breaks, the drivers become fatigued which, in turn, leads to them falling asleep behind the wheel and crashing their truck. And to top it all, when the truck falls, looters arrive and steal the goods. It’s risk and losses all along the routes.
Corrupt practices by officials who target trucks for all kinds of nonsensical, so-called transgressions have also played a part. Bettie Massyn cites just one example being where one of their interlinks parked in a town in Mpumalanga. When the driver got back, it was clamped.
“We had to pay R49 000 to the traffic department to get the truck released. The charge sheet read like a fairy tale citing tyres not being in a good condition, diesel spilling onto the road, the truck bumping into and damaging the sidewalk where there is no sidewalk. They were trumped up charges but we had to pay. There was no way we could leave the truck impounded while taking days to argue the case as the truck had a load on it which we had to get delivered for the customer,” she says.
Given the low margins as spelt out above, a hit of that size on the company’s bottom line is equivalent to the total profit made on 16 trips from Johannesburg to Cape Town with a tautliner. It should never been imposed on the company. Something smells rotten here. Massyn Vervoer is an RTMS accredited company and I seriously doubt that its tyres were in an unroadworthy condition or that it was leaking diesel onto the road. “With the high price of diesel, you don’t waste a drop never mind pouring it onto the road,” says Massyn.
Transporters under threat
One can carry on and on but if there is one thing that stands out high above everything, it is that the transport industry is under threat of deteriorating into a shoddy, anything goes sector where unroadworthy vehicles haul goods at unrealistic rates. Unless, of course, you take action such as Massyn Vervoer has taken and end it before you reach the bottom of the pit.
While Massyn Vervoer has taken the decision to close its long haul business due to the toxic conditions as outlined above, there are many companies which do not have any back-up and are thus accepting the cut-throat, bully-boy rates and toxic environment just to keep their wheels rolling.
Many such operators have to cut costs and our biggest concern is that the cuts are being made on the maintenance side which poses a huge safety risk not only to the company but to its drivers and other road users. Also, given that these operators have to push hard to increase their trip times in order to generate a tiny profit, their drivers are driving tired and fatigue has become a huge problem in this sector. You have to be blind not to have noticed the increase in truck road crashes over the past year or so.
One sector where we are already seeing this happen is in the side-tipper commodities segment where small operators are somehow getting contracts but at rates that don’t enable them to fix a puncture never mind do any kind of scheduled maintenance on their rigs. And many of these rigs are in an abysmal state of unroadworthiness. They are horrendously unsafe – and FleetWatch has proof of this.
Who is giving out these contracts? Is it is the mines? Then shame on you. Is it the brokers? Then shame on you too? The point being that many of these transporters – small SMMEs – are at the bottom of the feeding chain and are being exploited to the ‘n’th degree. Massyn Vervoer did not want to wait to reach that point.
“We’ve always operated to high ethics and we did not want to get to the stage where we can’t meet our commitments to our creditors, debtors and staff. The good name that we have built up over 40 years is very important to us and we would rather get out now than disappoint people by holding on until we are completely destroyed and can’t meet those commitments,” says Bettie Massyn.
“My heart is sore”
One person who has been hit hard by this decision is founder of the company Frans Massyn (Sir). Although he knows it is the right business decision to take, he says his heart is sore.
“I’m feeling very sad,” he tells FleetWatch. “Telling people who have worked for you for decades that they no longer have a job is not easy – especially when neither you nor they have done anything wrong. It’s all being imposed on us by outside influences. The ‘blue-chip’ companies are not looking after their transporters. They are killing them.”
Frans is proud of the fact that all the drivers – and most of the administrative staff – have not been left in the lurch. “We have found jobs for them. They deserve that,” he says with a heavy heart.
And here’s something scary. According to Frans, when the news got out, he had a number of calls from transporters expressing empathy towards the decision adding that if they could get out, they would – and for the same reasons as outlined above. Those reasons resonate with many transporters.
In fact, FleetWatch received a What Sapp message from one transporter saying he had heard of Massyn Vervoer closing. Without knowing any other information, he stated in his message: “We as transporters are being killed by the large organisations that supply warehousing and other facilities to the various manufacturers and make their profits from warehousing and the transport of loads that are superior, leaving the multi-drop and poor location drops to the transporter that subcontracts.”
While on the point of other transporters finding themselves with the same gripes, it was not long ago that FleetWatch published a letter from Clint Brook, managing director of Logico Logistics headed: “Why do we transport for miniscule margins?’ You can read it here: https://fleetwatch.co.za/why-do-we-transport-for-miniscule-margins/
A lighthouse is a tower with a bright light at the top located at an important or dangerous place with its main purpose being to serve as a navigational aid and to warn boats of dangerous areas. Lighthouses mark dangerous coastlines, hazardous shoals, reefs and rocks.
The loss of the long-haul division of Massyn Vervoer can be seen as a lighthouse emitting a warning of danger ahead. Given that rail is almost non-functional, the South Africa economy depends on trucks and the country cannot afford to lose its truckers. Is South Africa going to heed the Massyn Vervoer lighthouse or ignore it and end up crushed and broken on the rocks?