SPIRALLING fuel-price hikes are ratcheting up transportation costs for trucking companies, which in many instances are being passed down the supply chain to consumers.
Murray Bolton, joint CEO of JSE-listed Cargo Carriers, says that companies are doing their best to control fuel consumption carefully. But as fuel becomes ever more expensive, this is being taken out of the companies’ hands.

“Our profit margins are being decreased all the time as the percentage of fuel becomes a greater element of our costs. Its reaching levels that, depending on the type of operation and the distance travelled, fuel is now close to 50% of our costs.”Bolton says that the company is looking at possibly undertaking night deliveries, when there is less traffic and consequently less diesel fuel used. Payloads are being optimised to avoid half-empty vehicles.“Using our software packages to optimise the logistics, we are examining routes where we believe there is likely to be less congestion and less distances. Its becoming more important to look at distance travelled rather than time.”

Operators are also looking at more fuel-efficient vehicles, Bolton says. “This is a huge factor. Previously operators may have gone for higher powered vehicles to be more flexible, but will now want to optimise fuel.”

“Our profit margins are being decreased all the time, as the percentage of fuel becomes a greater element of our costs. It’s reaching levels where fuel is now close to 50% of our costs”

The skills shortage is another major issue. Emigration apart, it is due to the rapid rate of growth in the South African economy, which has resulted in a training deficit, he says.“This can’t be addressed overnight. “We’ve instituted apprentice training and driver training programmes. We know we will probably lose a lot of them, but it’s something that has to be done.”

Fuel industry analysts believe that challenges could be faced in the liquid fuels industry on a number of fronts. There is concern that refineries are aging and are in need of major refurbishment or rebuilding. Also, major environmental issues are likely to arise.