Cost of truck strife ‘could run into billions’

If all the knock-on effects of the ongoing truck violence, which has adversely threatened the economy of SA and the region, are taken into account, the final costs to the country could run into billions of rands, according to economist Mike Schussler.

In quantifying losses incurred by the industry, the knock-on effect the violence has had on the economy and on consumers, Schussler said yesterday the xenophobic strife, sparked by unhappiness over the employment of foreign truck drivers, was “too costly to continue”.

With a single vehicle costing R2 million, an employed long-distance driver losing R60 per hour and a three-hour delay on the N3 highway translating to R540,000 per truck, the costs will hold serious implications all round.

“We are dealing with one of the most important sectors of our economy, which is the transport of goods from SA to neighbouring states and to the southern Democratic Republic of Congo,” explained Schussler.

The truck logistics industry, contributed 11% of SA’s gross domestic product (GDP), estimated at R1.26 trillion in the second quarter of 2019.

“If you look at the GDP numbers in the second quarter, the transport industry was already in the negative due to the burning of trains and the taxi violence, which spilled into the freight business,” said Schussler.

Unless the authorities, labour and other stakeholders moved fast to quell the violence, South Africa’s economic stability and growth was threatened.

“The impact of doing business is likely to be steep for the local and southern African logistics industry, with costs increasing.

“Due to the violence, the industry now has to pay more money in insurance to cover vehicle and goods costs, with backlogs impacting on delivery.

“For example, the delayed transport of chilled goods like milk, which have a week to be on shop shelves, are not likely to be there on time.

“This will have a knock-on effect on everyone in terms of loss and higher costs.

“SA citizens and neighbouring countries are now set to feel the pinch of rising food prices.

“The burning of one truck on the N3 highway, which is a long-distance corridor in South Africa, affects the movement of 6,000 others.”

He said the South African industry, with a footprint in the continent, was “concerned and deeply worried” about the ongoing violence.

“Buying a decent truck requires money and the consequences are huge for long and local distance transportation,” said Schussler.

Meanwhile, Statistics South Africa has made a surprise announcement, confirming that the country has avoided a recession, with the economy growing by 3.1% in the three months to the end of June.

The economy declined in the first quarter after more than 270 hours of Eskom load shedding, weak investment levels, a gold mining strike and a weak grape harvest.

But despite dodging the recession, the economic outlook remains bleak, due to low investment levels, labour unrest and yet another spate of xenophobic violence.

– brians@citizen.co.za

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