Compliance in the Road Freight Transport Industry in South Africa
The South African freight transportation landscape fundamentally differs from that of the rest of the globe. In most other countries the fleet sizes comprise mostly of the owner of the transport business, who is also an “owner-driver” on one of his vehicles and maybe another couple of vehicles, but not in excess of 10 vehicles. The management of the transport business in those countries, therefore, is also a lot simpler as the owner has a good understanding of the condition, utilisation and legal status of the assets under his direct control.
Here in South Africa, larger fleet sizes are the norm and sometimes ran into three digits, making the management of those fleets more complexed. Often multiple systems/software/Excel spreadsheets are required to keep track of the status of each asset. For example, a workshop program is used for managing vehicle maintenance, a Tyre program for managing tyres, a fuel system for fuel transactions, several books for managing revenue in load deliveries and many others. In most cases, none of the systems/software/Excel spreadsheets talks to each other or complements each other as it should in providing accurate, on-time and usable data. Also, compliance is not always met or addressed as required in terms of the expiry of vehicle licenses, permits and other legislation.
Compliance adds exponential amounts of time and cost to supply chain performance which goes against the industry aim to shorten timeframes and reduce costs.
It is the responsibility of the operator to ensure amongst others that compliance is met in:
- Vehicles are roadworthy and in possession of a COF (Certificate of Fitness);
- The vehicle does not exceed the permissible axle masses (No overloading);
- The load is secured before dispatching the vehicle;
- Pre-trip vehicle inspections are carried out;
- That drivers are trained, in possession of a PrDP (Professional Drivers Permit) and his/her license is free of endorsements;
- All drivers receive regular medical examinations;
- If Transporting dangerous goods (DG) or hazardous chemicals (Hazchem), the vehicle is registered as a DG operator and the operator card or disc is displayed;
- Required documents for transporting goods in South Africa or Cross-Border is available for inspection by authorities.
Several questions come to mind, and we hereby address them accordingly:
1) What are the most important sections of legislation that govern compliance in the freight industry?
National Road Traffic Act, 1996 [No. 93 of 1996] and as amended by National Road Traffic Amendment Act 8 of 1998 [W.e.f. 1 August 2000 - Proc. R47 / GG 21425 / 20000731]
National Road Traffic Amendment Act 21 of 1999 [W.e.f. 1 August 2000 - Proc. R48 / GG 21425 / 20000731] [W.e.f. 20 November 2010 - Proc. 61 / GG 33742 / 20101110]
National Road Traffic Amendment Act 20 of 2003 National Road Traffic Amendment Act 64 of 2008 [W.e.f. 20 November 2010 - Proc. 60 / GG 33742 / 20101110] dealing with:
- Registration and licensing of vehicles
- Licensing of drivers
- Driver Permits (PrDP)
- Fitness of Vehicles
- Operator Fitness
- Dangerous Goods
- Hazardous Cargo mostly requires SQAS (Safety & Quality Assessment for Sustainability). This is a system of uniform third-party assessments to evaluate the performance of Logistics Service Providers and Chemical Distributors.
- AARTO Amendment Bill, 2015 [B 38B-2015] responsible for:
- Levying of penalties: Traffic fines, overloading & impounding of vehicles
- Imposing demerit points
Customs Control Act 31 of 2014 as
- Amended by Tax Administration Laws Amendment Act 22 of 2018
- Amended by Tax Administration Laws Amendment Act 13 of 2017
- Amended by Tax Administration Laws Amendment Act 16 of 2016
- Amended by Tax Administration Laws Amendment Act 23 of 2015
- Amended by Tax Administration Laws Amendment Act 44 of 2014
The Customs Control Act 31 of 2014 aims: to provide for customs control of all vessels, aircraft, trains, vehicles, goods and persons entering or leaving the Republic; to facilitate the implementation of certain laws levying taxes on goods and of other legislation applicable to such goods and persons; and for matters incidental thereto e.g. Examining: Cross border permits, Customs road manifest, Consignment note, Commercial invoice, Packing list, F178 - bank clearance for goods valued at R 50,000 or more, Veterinary - health or agricultural permits or certificates and Certificate of Origin - SADC, COMESA or SAD500.
National Bargaining Council for the Road Freight and Logistics Industry (NBCRFLI)
The Council is governed by the Labour Relations Act of 1995, which allows for employer and employee organisation’s to establish a bargaining council for industry and area. Through the bargaining council, trade unions and employer organisation’s can negotiate matters that are of mutual interest to the road freight and logistics industry ensuring: Industry wellness e.g. Adherence to the maximum driver hours, Minimum wage, Provident fund deductions.
Occupational Health & Safety Act (85 OF 1993)
To provide for the health and safety of persons at work and for the health and safety of persons in connection with the use of plant and machinery (Section 8 and 14).
- Environmental Systems 18000 & 14000
- SANS 10228, Annexure A,B,C,D,E,F,G, Main
- SANS 10229-1
Dealing with Access restrictions to certain areas/streets, Parking restrictions e.g. No driver or person in control of a heavy motor vehicle shall park or leave such motor vehicle parked overnight in a public place and/or in a residential area. Also, trees causing interference or obstruction should be avoided by heavy motor vehicles.
Compliance with tax legislation (VAT, PAYE, UIF, SDL) as administered by SARS.
2) Do large companies and small companies have to meet the same compliance requirements or are their differences?
Same compliance requirements are to be met. There is however a focus on the larger companies to comply. i.e. RTMS, ISO 9001 and ISO 16949 (Quality Management Systems).
3) Are there significant cost implications i.e. time and manpower in compliance for freight operators?
Yes, but the non- compliance easily outweighs the time and cost spent in penalties, Insurance claims, Accidents and incidents then being compliant.
4) What are the major challenges to the transport manager in meeting his compliance obligations?
Time constraints in the operational execution of customer demands in getting loads delivered. Visibility across the various components of compliance i.e. Roadworthy fleet, compliant drivers, fatigue management and overloading to name a few. Implementing a preventative action plan, with safety inspections to identify defects and to fix it before vehicles go on the road. The lack of credible data or proper analyzing / understanding of credible data remains a challenge for many transport operators.
5) From whom should data be collected for compliance purposes?
Collecting data and sensing signals in real time, coordinating execution as well as resolving issues as they happen allows companies to operate their supply chains more effectively. The focus on big data management further accelerates the adoption of supply chain networking. Sharing vast amounts of data is thus crucial and all involved in the daily operation of a transport business. i.e. Workshops, operations, finance, customers (loading and off-loading points), human resources should play their role.
6) To whom should reports be provided?
- Department of Labour
- Employment Equity Report
- Workman’s Compensation
- VAT, PAYE, UIF, SDL
- National Bargaining Council for the Road Freight and Logistics Industry (NBCRFLI)
- Return of earnings
7) Can technology reduce these burdens?
Technology-based innovation continues to play a critical role in revolutionising the industry. These innovations range from driver behaviour monitoring telematics to predictive proactive “flagging” solutions to manage exceptions on the fly. Furthermore, technology could ease the number of staff necessary to complete compliance processes, as well as provide the data necessary to pass compliance audits much quicker. Also, reduce time constraints in getting notices of non-compliance through personnel that normally needs to go through administrative processes.
8) Do software solutions require additional training of employees?
With the correct support and skills development, operators can introduce software solutions with ease. Software solutions should thus be seen to assist employees in their daily operations, and not to discourage them from using it.
9) What are the major benefits of being compliant?
Efficiency is driven and thus allow the Transporter to run a much smoother operation and to be more competitive than a business which is non-compliant. There is also the assurance to customers that all risks are identified and addressed in a constructive manner. Being a law-abiding citizen.
10) What are the major cost savings of being compliant?
Non-compliance attract the following: Penalties (Fines, shutting the business down for periods of time until areas of non-compliance are resolved).
neXefleet and neXefleetmobile were designed to address the above in helping the transport operator to achieve compliance with industry best practices as follows:
Toolbox and Safely Talks
The transporter can send a message to the Driver. As per example, this message reads “Please ensure you stop every 2 hours to check your vehicle and load condition”.
The Driver will need to acknowledge these messages by selecting the “Mark as Read” button.
Permits and Licenses
Notifications are scheduled to be sent to interested parties within the organisation to ensure they are timeously renewed.
The driver is made aware of his own personal Permits and Licenses as well as when they will expire. There is also a section for Asset Permits and Licenses where the driver will be able to view the validity of the Permits and Licenses assigned to them.
The Driver is prompted to fill in if he/she has their driver’s licence with them or not. Selecting “Yes” will allow them to continue executing their assigned duties for the day, selecting “No”, will not allow them to continue with the executing of their duties for the day.
The driver is taken through a vehicle inspection which will cover the vehicle and trailer’s indicators, wheels, tyres, wheel nuts, windscreen and more as per the companies’ policies. These are a series of Yes/No questions.
End of Day Debriefing
After the load has successfully been delivered as well as the paperwork been uploaded, the driver is prompted to go through an “End of Day” where the driver needs to record if there were any Accidents, Defects, Incidents and more.
Kobus van der Westhuizen
Chief Commercial Officer - Xcelcious Technologies (Pty) Ltd