Mon Dec 26 2022 07:53:07 GMT+0000 (Coordinated Universal Time) - QikTruck Media
Since the start of the 21st century, South Africa has seen the commodities market surge and crash several times. Despite these dips, the South African trucking industry was still vital and effective in moving goods from one point to another. This remarkable success, however, is often contingent upon the cost of fuel in the region. The cost of fuel, ever increasing or decreasing, has and will continue to affect South Africa’s transportation industry, dictate transport and trucking rates, and could even potentially cripple the commerce sector altogether.
The burden of increased fuel costs has, and always will, impact the trucking rates significantly. Increases in fuel prices often rise due to seaborne freight, which, if it increases, could cause trucking companies to immediately raise their rates. Similarly, factors such as inflation and government excise taxes have a direct implication on the cost of fuel, thus causing an almost immediate price increase across all South African markets.
Another notable issue that is worth mentioning is cost fixing, which occurs when trucking companies raise their rates to remain competitive. This ultimately creates a monopoly of sorts and fewer choice for consumers, eliminating all other competitors who cannot match the set prices. This subsequently creates stagnant transport prices, which could lead to a general decline in the transportation sector across the board.
As one of South Africa’s most important sectors, the trucking industry has a significant impact on the country’s economy. In 2017, almost 4.5 million tons of cargo were transported, which generated an estimated income of R246 billion. With this in mind, it’s easy to see the positive impact that the trucking sector has on the economy.
However, the concern lies in the rising and inconsistent costs of fuel, which could have an adverse effect on the industry if left untreated. Increases in fuel prices cause massive strain on trucking companies as they are often constricted by their own small profit margins, leading to cuts in other essential departments & processes, such as payroll.
In response to this, the majority of trucking companies will attempt to cut costs by either reducing the size of their fleet, cutting back on maintenance services or by hiring cheaper drivers. This will, in turn, lead to long delays in delivery times, lost contracts and an overall decline in the quality of service.
The fluctuating fuel fees, and their subsequent implications, are an area of great concern for the trucking industry. At the current moment, many companies are devising strategies to try and reduce the impact of fuel prices upon the industry, such as reducing staff and cutting back on expenditure wherever possible. The most effective strategy, however, has been the emergence on on-demand truck and driver hire services, such as QikTruck.
QikTruck is an innovative on-demand truck and driver hire service. This service allows businesses to substantially reduce their overheads by having the flexibility of hiring drivers and trucks on a ‘pay-as-you-go’ basis. This eliminates the need to employ permanent drivers, meaning that businesses can just hire the necessary amount of vehicles to complete any deliveries and long-hauls.
QikTruck is revolutionizing the way trucking companies do business by significantly cutting back on overheads and eliminating inefficiencies. Through this service, businesses can rent any type of truck or cater for any kind of transport service, all with the help of a dedicated account manager and a one-on-one consultation process. This has been done with the purpose of creating a more transparent, flexible, and cost-effective trucking service.
The cost of fuel in South Africa has an unmistakable influence on the trucking sector with freight rates constantly shifting due to increases and decreases. This has, without doubt, had a notable effect on the way businesses perceive this sector with profit margins continuously under threat. To counter this, companies are turning towards more innovative solutions, such as QikTruck, in order to reduce costs, enhance efficiencies and remain competitive.