A refreshing change

I recently attended the annual UD Trucks Southern Africa press conference where some thoughts on how to “reignite” and “kick-start” the South African economy were shared

It was so refreshing to attend this briefing and hear Gert Swanepoel, acting vice president, and Rory Schulz, marketing director, share their thoughts and vision for the next year. Over the past few years, we journalists have become accustomed to mentally preparing ourselves for yet more news of doom and gloom, and predictions of things getting worse…

Not so this year at camp UD − as you’ll read on page 38, the men from UD Trucks predict the commercial vehicle market will grow by around three percent in 2017. Similarly, they predict the country’s fixed investment rate and gross domestic product (GDP) to increase a couple of percent over the next 12 months.

Sure, we need to remain wary of some issues, but the picture they painted is still better than the one to which we’ve become accustomed.

The two most encouraging observations, though, were made by Schulz…

“We get the distinct impression from our customers that they have recovered from the paralysis of recent times and are going to start running their businesses again; doing what is necessary to grow again. I find that very encouraging,” he began.

Schulz then detailed how much the private sector really can do to give the South African economy a kick start.

“Why is the most sophisticated economy in the region lagging behind? Why are the GDPs of other countries growing at three, four or five percent and ours is growing at 0,1 percent?” Schulz questioned. “What is it we can do from a South African business perspective?” he continued, specifically referring to the transport industry.

“The road-freight industry might play a very small part of this, as it employs only about 3,8 percent of the country’s workforce, but it has a critical role. Cost-effective and high-quality transport systems are key in modern logistics, and there is a lot, in terms of road transport, that the local industry is doing very well.

“The services around road transport are becoming more important, as is understanding diversity; we cannot treat the road-transport industry separately, we have to integrate it into the total economy.”

Schulz suggested: “There is a very good programme written by The World Bank called the Road Services Reform. According to this, there is no off-the-shelf solution; the objectives for reform should be clear. The identification of the relevant stakeholders is key and institutions are important for sustainability. We need some political will, individual businesses must be able to participate and there must be a balance between regulation and cost,” he explained.

An important consideration is for the regional authorities to assist with some of these reforms, with the balance between regulation and cost being critical. “In the Southern African Customs Union, duties are being added upon duties, for example. There are, however, opportunities for companies to start small and grow bigger, providing we get the balance right with the correct levels of regulation.”

There is much that can be done by operators. “Good drivers are so important; they are central to an operation. They are the ambassadors and multitaskers. Safety is also becoming a very big issue. If safety is compromised and if the vehicle is not fuel efficient, the whole operation is compromised.

“There must be a balance between the internal and external cost of transport. There is, however, another ‘cost’ of transport to the public − the environment. We all pay when the environment is polluted.

“I also think an awareness of the full and total cost of ownership of vehicles is needed. For a long time we’ve been saying that understanding this is vital to planning and becoming more efficient,” said Schulz.

“Only a mix of tools specific to the region will change the situation,” Schultz explained.

He concluded: “We need to start somewhere, in spite of what’s happening in terms of politics. We, too, are going to be positive this year. We’ll focus on our customers and on doing the job that we need to do in order to contribute to this industry.”

Let’s hope that, this time next year, his 2017 recap will reflect just that.