When the bell tolls for city distributors
With new and widened freeways to be tolled in Gauteng and general toll fees almost certainly to be increased throughout South Africa next year, city distribution will require careful vehicle selection and fleet management. UDO RYPSTRA looks at this market sector and the brands currently preferred by fleet operators
City-to-city and inner-city distribution is going through an evolution, if not a revolution, with traffic congestion and the call for less pollution (through lower vehicle emissions) posing new challenges for fleet operators.
Overseas, especially in Europe, it has led to city officials imposing bans on commercial vehicle traffic during peak hours and the introduction of predetermined in-city delivery periods.
Apart from instant traffic flow information, and fleet management systems that can be accessed even by drivers via the mobile web (for example iPhones), it has also led to changes in vehicle selection. This has included the introduction of hybrid and electric service and delivery trucks by municipalities and companies such as UPS and DHL.
In South Africa, hybrid and electric trucks are still in the testing stage, but the need to reduce traffic congestion is as high on municipal agendas as it is overseas. This applies especially to Gauteng; the growth of a new major distribution hub at Midrand and the connected roll out of the first R21 billion phase of the Gauteng Freeway Improvement Project (GFIP) pose new challenges to fleet operators.
Gauteng continues to contribute the most (35,7%) to South Africa’s gross domestic product and is expected to do so until 2014, according to the Gauteng Provincial Economic Review and Outlook released recently. The GFIP is supposed to enhance this status in terms of better traffic flows and faster distribution.
The project comprises different phases to upgrade and implement new freeways in what will ultimately be a 560 km freeway network. The first phase, comprising the upgrading of 185 km of the most congested freeways, is currently under construction (having a total of 15 work packages).
Apart from widening freeways, the GFIP project aims to remove bottlenecks at interchanges. For the first phase of the GFIP, 34 interchanges have been or are being significantly upgraded, including infamous interchanges such as the Allandale, Rivonia, William Nicol, Gillooly’s and Elands interchanges. At the time of writing (8 November), more congestion was expected for four weeks around the Linksfield Bridge, to allow for the steel bridge joints to be replaced.
As in developed countries, South African cities will also have median lighting and Intelligent Transport Systems (ITS). In Gauteng these are already provided on the sections of the network with Variable Message Signs (VMS), CCV cameras and Incident Management Services. This will allow the South African National Road Agency (Sanral) to manage the national road network in Gauteng for optimal use of the road capacity available.
Through the VMS, Sanral is also able to warn truckers and other road users of congestion – important to operators with regular or critical delivery times. The CCTV cameras ensure that incidents are noticed and emergency services dispatched immediately. (This information is also available on Sanral’s traffic website: www.i-traffic.co.za.)
The GFIP, combined with the completion of the Gautrain track linking Pretoria, Midrand and Sandton (now scheduled for August, not June, 2011), is expected to reduce the congestion on freeways. It is hoped this will especially affect the Ben Schoeman highway between Pretoria and Johannesburg, past the Midrand distribution hub, and at Gillooly’s. But, how much congestion will be reduced by is still anybody’s guess.
A lot depends on the final toll fees on cars and trucks for the GFIP to be introduced in April 2011. The cost of a Gautrain commuter ticket for all those Pretorians working in Johannesburg will obviously influence them. The choice will be between the Gautrain or whether to pay several hundred rand extra a month using – and crowding – the Ben Schoeman highway at peak times.
The rates will be charged between the 42 automated gantries that make up the network, 36 of which go live in the early project implementation phase.
In 2007, Sanral published a tentative fee of 50c/km, before discounts, for light vehicles such as passenger cars. This led trucking companies and the RFA to assume that toll fees for truckers could be as high as R3,50/km.
In November, Sanral CEO Nazir Alli and other Sanral officials told reporters that toll tariffs and discount strategies would be finalised only by the end of this year. Alli said in response to the assumptions of the trucking companies, truck operators could expect to bring the cost down to R1,92/km, through savings on vehicle maintenance and truck repairs, as the freeway system would be as good as new.
These savings were calculated using the 2009 State of Logistics Survey for South Africa, which dissected the additional costs added to truck transport through poor road conditions.
Alli added that registered toll road-account users could then receive a further discount and they could see the toll charge come in at R1,31/km.
However, Ismail Essa, northern region manager of Sanral, was quoted as saying that while a 50c/km rate for light vehicles was mooted in 2007, higher toll fees were expected.
The RFA and major logistics companies like Imperial Logistics and the Value group, have stated that the toll cost for three- and four-axle vehicles had already risen substantially and that these had to be passed on to the consumer as would fuel price increases.
The fact remains that the introduction of toll fees on major freeways that were not previously tolled, will add to current supply chain costs, which are likely to be passed on to the consumer.
Proper vehicle selection to keep operating costs down, including fuel, maintenance and toll fees, therefore remains a critical factor for distributors. An analysis of National Association of Automobile Manufacturers of South Africa (Naamsa) sales figures for October reveals that South African manufacturing and service delivery companies, and public hauliers, overwhelmingly go for a Japanese brand when it comes to selecting light, medium and heavy distribution vehicles.
In the pick-up sector (under 3 500 kg), it is a close fight between the Toyota Hilux (2 495 units) and the Nissan NP series
(2 205), with GMSA’s Corsa pick-up (1 339)third and Isuzu’s KB series (945) lying fourth. It must be said that a large number of these are double cabs used as passenger cars and that sales of the new Volkswagen Amarok had just started. Also on offer are the Kia and Hyundai freight carriers, of which it seems plenty are being sold, but not reported to Naamsa.
It is in the medium commercial vehicle sector (between 3,5 tons and 8,5 tons GVM) that one can start talking about real distribution vehicles, with drivers requiring a professional driver’s licence. Here again, the Japanese brands are preferred with the Toyota Dyna/Hino 300 Series (188) leading the pack well ahead of the Isuzu N-Series (102).
The Mercedes-Benz Sprinter (99), however, remains SA’s favourite van, well ahead of the VW Crafter (51) and the Iveco Daily (43) with some of these units obviously being sold as chassis cabs or for conversion into midibuses.
It is when one comes to the 8,5 to 16,5 ton sector that one finds the heavy distribution vehicles, and here, too, the Japanese reign supreme. UD Trucks (101) and the Isuzu F-Series (95) seem to be hot favourites with the Hino 500 Series being the third choice.
It is only in the extra-heavy sector, where the difference between long distance and city distribution trucks becomes blurred, and one finds the European brands, noticeably the Mercedes-Benz and MAN brands, dominating.
Back to the proposed tolling of all these vehicles. Instead of passing high toll fees on to the consumer, big operators like ABI, Spar, Fast & Fresh and oil companies with their big in-city vehicle combinations, could benefit from a new exercise in logistics planning, especially route planning, or even a change in vehicle selection. However, we have been told they can only do so once they have the final toll tariffs and discounts to work with.
Small private operators, running delivery services from factories and/or produce markets in Pretoria, Kempton Park, Germiston, Alberton and City Deep, with light and medium commercial vehicles, could also benefit by electing fewer but bigger vehicles. In this way they could achieve the best rate for tonnages or volumes moved per kilometre (CPK). But watch your turnaround times!