Industry organisation the Road Freight Association (RFA) says the looting and violent attacks on road freight logistics vehicles and the wanton destruction of trucks and goods have begun to harm the status of South Africa as a safe haven for investment, and as an efficient logistics hub for foreign traders.

“What started out as sporadic incidents on one or two routes has become the norm on any and all routes of the total supply chain, which occurs whenever someone is upset, and is affecting destinations and originations. With the total supply chain now being impacted, the economic effects are far reaching,” RFA CEO Gavin Kelly says.

While short-term losses run into millions of rands, the long-term impact is “incalculable and will be felt long after the burning has stopped” and when it is far too late, he adds.

The owners of freight travelling through South African ports, especially the Port of Durban, and along the corridors that have been targeted, as well as their customers, may choose to move the cargo through neighbouring countries.

“This has already been happening as South African ports become inefficient and the surrounding ports develop, improve and drive efficiencies up. South Africa’s Gateway to Africa status has been lost and these attacks will further cement the move of transit freight from South Africa to neighbouring countries. Port revenues will drop, as will income through all support and related freight logistics users,” he says.

Additionally, depending on the category of vehicle, the type and value of cargo, and the specialised equipment required for the cargo, the financial impact on businesses can be anywhere between R3-million and R10-million. However, the loss of income through businesses closing is far greater; there are instances where small businesses have lost their only truck or trucks.

“This means a loss of earnings or revenue for the business, loss of salaries paid to staff who would no longer have jobs, owing to the business being shut down, loss of revenue through the services and support the business uses, such as fuel, storage, maintenance, tolls, staff requirements and licensing, among others,” Kelly notes.

The potential closure of businesses means fewer transporters available to perform work. Some companies might feel the industry is not a safe or secure environment, and so their owners could decide to simply close their business, he adds.

Further, costs relating to insurance will increase, as the risk to insurers has increased over the last four years, partly as a result of the frequent attacks on trucks.

“The evidence is clear that road freight is attacked as it is an easy target and the looting prospects are huge in terms of the quantity and the variety of goods that can be looted. Security costs will increase as logistics companies are forced to employ guarding services. Routing will change to safer, but perhaps far longer, routes where control is easier,” he says.

The consumer will foot the bill for what has happened through indirect charges relating to the cost of logistics and as risk appetite softens and insurance providers demand higher premiums.

The costs relating to operational assets are just the tip of the iceberg and, as reports come in, this may very well grow, However, the cost to the South African economy will run into billions of rands lost, as foreign investors’ confidence in South Africa plummets and those who use South Africa as a transit hub turn away from this country and move to other countries that are safer and more efficient.

“The association reiterates its call to the President to ensure that common violence is dealt with. The level of opportunistic crime is far too high. It needs to be dealt with now. The association has repeatedly called for the rule of law to be shown to be firmly in place and that the safety and security of South Africa and its people is ensured. Government needs to act swiftly and decisively to bring an end to this senseless destruction of the road freight sector,” Kelly says.