Management of Road Freight Transport

By Nick Porée

This book describes the fundamentals of effective road freight management. It is written by the designer, author and lecturer on the RAU Transport Management courses, which, for many years, have been the required evidence of competence for employment in the road transport industry. His insights and experience has made a major contribution to the knowledge base of a great number of the present senior managers in the Southern African road freight industry.

The book is intended to fill the extensive gap in the practical learning material available to transport supervisors, managers and anyone aspiring to progress in the challenging field of road freight logistics management. This “handbook” is deliberately focussed on the principles and the practical functions of transport management without exploring the complicated and sophisticated programmes such as electronic data interchange (EDI), GPS tracking, algorithm-based scheduling, video monitoring and other high-tech tools.

The book is written for the large number of people who aspire to work in the freight transport industry, but need to understand the basics of transport management, firstly as evidence of competence when seeking employment and then to improve the efficiency and quality of the operations that they manage. The practical examples and recommended practices do not require expensive equipment or systems in order to yield effective results. The functions and standards are equally applicable to the one-man trucker and to a manager of a multi-vehicle operation, in any country.

The focus is on standards, effective monitoring and fact-based decision-making, which are the key to the quantity and quality control of the “product” (road transport), the efficiency of which can only be measured (not stacked and counted) and that offers so much potential for inefficiency, waste and loss.

It is trusted that this book will contribute to the groundswell of action in all countries, to improve the quality of road freight operations. It is designed to be usable in the training of competent managers for the future, either for self-study, or as a textbook.

• Language: English
• Publisher: Nick Porée
• Release date: Mar 13, 2019
• ISBN: 9780463986646

Book preview

Management of

Road Freight

Transport

Management of

Road Freight

Transport

Nick Porée

Copyright © 2019 Nick Porée

Published by Nick Porée Publishing at Smashwords

First edition 2019

All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or any information storage or retrieval system without permission from the copyright holder.

The Author has made every effort to trace and acknowledge sources/resources/individuals. In the event that any images/information have been incorrectly attributed or credited, the Author will be pleased to rectify these omissions at the earliest opportunity.

Published by Nick Porée using Reach Publishers’ services,

P O Box 1384, Wandsbeck, South Africa, 3631

Edited by Vanessa Finaughty for Reach Publishers

Cover designed by Reach Publishers

Website: www.reachpublishers.co.za

E-mail: [e-mail]

Nick Porée

[e-mail]

To my Jenny, for love, and our lifetime together…

Acknowledgements

This book reflects experiences and lessons learnt in a variety of business situations from many sources over a 50-year involvement in management and consulting in freight transport and logistics. Grateful acknowledgement is due to the managers, academics, technicians and engineers, friends and colleagues, who have contributed to the journey. With special thanks to Jack Webster, Prof. Wynand Pretorius, Chris Connell and, of course, to Rekha Sookream, for faithfully preparing and checking the manuscript. Errors and omissions are all mine.

Nick Porée

Durban, August 2018

About the author

The author, Nick Porée, a transport economist and consultant, was course designer, author and lecturer for the Certificate and Diploma Courses in Road Transport Management at the Rand Afrikaans University (Now UJ), in the 1980s. He was a member of the consulting team at RTPS tasked with redesign of the SA Road Transport Quality System as recommended in the National Transport Policy Study (NTPS). He has managed road transport undertakings and consulted on the management of transport operations in many industries over the past 35 years.

He has been the Lead Freight Transport consultant to the South African Department of Transport in the NATMAP, NFLS and RFS projects over the last five years as well as Freight consultant to the SADC –Tripartite Road Transport Harmonisation Project which gave rise to the TTTFP project, currently being implemented with EU funding, throughout the Southern African region.

As designer of the Provincial data banks and participation in many regional freight and logistics studies, he has travelled widely in South Africa and the region and is currently involved in several regional freight transport and trade facilitation initiatives in association with FESARTA.

Foreword

Bringing road transport up to speed

In most of the developing world, the mobility of cargo and people is almost entirely dependent on the road transport sector. The benefits of professionalising the sector – while globally applicable – are, therefore, especially relevant in the developing context. A more professional transport service will be more reliable, safer, more profitable, more sustainable and more able to focus resources on innovation and training.

The positive proof-points are clear. For example, the cost of training drivers and promoting eco-driving techniques can be recouped by fewer crashes and fines, lower fuel consumption and less vehicle maintenance. In the last 40 years, new trucks’ average consumption of fuel decreased by 40%, from 50 litres/100km in the 1970s to 30 litres/100km in 2008 – demonstrating the case for fleet renewal and improved technical inspections.

On safety, with 85% to 90% of accidents involving commercial vehicles due to human error, there is an even stronger case for driver training through internationally recognised standards. There is also a strong argument when it comes to maintenance (safer fleets) and loading (safer logistics facilities) – all of which carry a price when things go wrong.

Road transport is a major economic driver. In addition to direct employment, the sector generates many indirect jobs and employment – all of which can be professionalised. A recent study in East Africa found that there were 1.2 additional jobs for each truck on the road and studies also show that transport and transport-related jobs can reach up to 5% of total employment.

Tackling inefficiencies in road transport services requires frameworks to improve productivity, safety, competition, sustainability, transparency and overall professionalism. With strategic and focussed reform, governments can effect far-reaching advances in logistics performance, encouraging trade, improving road safety and boosting economies – often with minimal financial investment.

Professionalism needs to be driven by the regulatory environment. However, it is important that this environment is enabling – generating fair competition and quality of service. Access to the profession should be evaluated by qualitative criteria – so licences and rules should be framed around the quality of service rather than the quantity of, for example, trucks or loading bays. This can only be achieved where there is consistent enforcement and transparency. If not – the playing field is no longer level.

When there are weak regulations, or when they are unevenly enforced, the compliant are required to compete with the non-compliant – and cannot possibly succeed – given the unfair disadvantages of playing by the rules.

In the context of Southern Africa, it is clear that the regulatory authorities are addressing these issues. The International Road Transport Union (IRU) strongly supports the efforts of the SADC–EAC–COMESA Tripartite Alliance to review the regulatory environment at the regional level. The move towards a quality based, multilateral regulatory framework for road transport is very positive.

With this in mind, a road freight transport management textbook, which provides the industry with a learning tool for aspirant and existing managers, is entirely complementary to the broader effort to professionalise the industry at the regional level. Furthermore, with trade in East and Southern Africa so reliant on road transport, increased efficiency will yield untold economic growth. A professional road transport sector is the bedrock of a winning economic strategy.

William Petty

Senior Manager, IRU: Geneva

Commendation

It is with great pleasure that I contribute a few words to this informative manual, which provides a practical approach to the basic functions of freight transport management. The need for such information cannot be overstated, given the fact that there is minimal training in road freight transport management in the Sub-Saharan African sub-region and evident problems with the quality of operations. Road transport is the main mode for both goods and passenger transport throughout the region, which has nine landlocked countries heavily dependent on the road freight corridors for their supply chains.

This manual will provide a major boost to the efforts of the COMESA–EAC–SADC Tripartite Transport and Transit Facilitation Programme (TTTFP) initiative to move towards harmonisation of standards for improved managerial competence and transport quality. This is a core activity in our overall efforts to improve transport efficiency in a free trade area. Better corridor efficiencies will assist established transporters and potential investors in the transport sector to improve the planning of their activities and for transport stakeholders to anticipate more predictable standards of performance; an aspect that has been lacking in our transport systems. I believe that this handbook will help to improve the standard of management and the quality of operations in many areas, especially with regard to load control, defective vehicles and unqualified drivers, which have directly contributed to the increased accident rates and the high levels of business failures.

It is hoped that the contents of the handbook will continually be updated and that an online version will also be made available. I commend Nick Porée for his initiative in preparing this handbook and pledge the support of the Federation of East and Southern African Road Transport Associations (FESARTA) in disseminating it to all the national road transport associations (NRTAs) and corporate members in Southern and East Africa.

Mike Fitzmaurice

Executive Director

FESARTA – July 2018

Preface

Road freight transport is the most prevalent and effective transport mode in the Southern African region, both for domestic and interstate movement of goods. The mode serves almost all sectors of the economies of the region and transports a wide range of commodities from primary production to consumer goods distribution. The road freight mode is an essential element of the productive capacity of many industries and the logistical efficiency of road freight transport is a major factor in the competitiveness and profitability of both the primary producers and the distributors of domestic and imported and exported goods.

Management of road freight transport is a dynamic and complex task due to the need for high intensity management of a product that is not physically visible and is instantly perishable. Transport cannot be stored, and efficient utilisation of resources is only possible with dynamic pre-planning of the time and capacity available. Success or failure can only be measured by efficient monitoring of the physical inputs and the measures of capacity utilisation in terms of tons transported and time utilisation compared to potentials. Hidden and latent costs require effective budgeting and management accounting practices to anticipate cash flow restrictions.

Throughout the Southern African region, road freight transport is almost exclusively performed by private sector undertakings, which include high proportions of own account operators as well as carriers for hire and reward. The industry has grown very rapidly with traffic volumes, which pose problems for supply of road space and funding capacity for maintenance of the road networks. In many areas, roads are deteriorating and aggravating the rapidly increasing costs of the mode.

It is a negative feature of road freight transport in the region that there are no requirements for qualification or competence for admission as a road freight operator. The numbers of operators and the scope of their operations is totally unknown. The failure to regulate the standards of management has led to deterioration of the quality of operations in many areas, as evidenced by 60% of defective vehicles, unqualified drivers, increasing accident rates and high levels of business failures.

Training in the discipline of freight transport management has received minimal attention throughout the region. In South Africa, the Certificate and Diploma Courses in Road Transport Management at RAU (now University of Johannesburg, UJ), were focussed on practical management of road transport undertakings until the 1990s, when they became more generalised and ceased to have relevance to operational management.

This book is intended to provide a practical overview of the functions of freight transport management and to recommend practices that can ensure efficiency, quality of operations and effective delivery of service to customers. It is recognised that the wide range of applications in which road freight is engaged cannot be adequately covered in a single publication, so the focus of the recommended practices is on the principles to be applied. The examples and recommendations are simplified to essentials, and deliberately exclude the extensive, sophisticated, EDI-based systems in use by the more complex forms of road transport operation.

Although most of the examples and regulatory material are South African, it is intended that the recommendations will provide a suitable grounding in the basics of road freight transport management to assist entrants to the industry, in all countries of the region, to improved competence. It is also intended to serve as a checklist for operators and employed managers to review existing operations, to identify specific aspects of systems and practices in need of improvement.

A brief description of the concept of the operator licensing system as well as the requirement for Responsible Competent Persons (RCP) is included. Introduction of these necessary quality controls is planned for the Tripartite region and is also an element of the South African Road Freight Strategy approved by Cabinet in May 2017.

Nick Porée

August 2018

List of Tables

ACKNOWLEDGEMENTS

ABOUT THE AUTHOR

FOREWORD

COMMENDATION

PREFACE

Acronyms and Abbreviations

1. Background

2. Introduction

3. Planning

4. Organising

5. Drivers

6. Operations

7. Monitoring

8. Costing and Reporting

9. Finance and External Relations

10. Compliance with Legislation

11. Specialised Transport

Appendix A – Transport Technical Terms

Appendix B – Legal Mass and Dimensions (South Africa)

Appendix C – Regional Vehicle Dimensions and Weights

Appendix D – Accident Report Form

Appendix E – Typical Employment Contract (sample from Department of Labour manual)

Appendix F – Regional Road Transport Associations

Recommended Reading

Table 1: Vehicle Description 31

Table 2: Vehicle Specification – Comparison Sheet 33

Table 3: Vehicle Comparison 36

Table 4: Pre-trip Check by Driver 75

Table 5: Driver Report 97

Table 6: Payload Achieved 101

Table 7: Monthly Report of Fuel Fill-ups 106

Table 8: Implications of Fleet Age and Increasing Downtime 109

Table 9: Eight-Year Projection of Costs and Expenditures for One Vehicle 112

Table 10: Workshop Job Card 116

Table 11: Individual Vehicle Cost Report 119

Table 12: Vehicle Fleet Monthly Cost Report 120

Table 13: Vehicle Masterfile by Vehicle Group 122

Table 14: Costing for Truck-Tractor-Interlink Combination: Long-Distance Haulage 123

Table 15: Analysis of Profitability in a Multiple Operation Depot 126

List of Figures

Figure 1: Typical Organisation Structure for Small Transport Operation 10

Figure 2: Analysis of Fatal Truck Driver Crashes by Age Group 38

Figure 3: Point to Point Pattern 50

Figure 4: Star Pattern 50

Figure 5: Grid Pattern 51

Figure 6: Cobweb Type Scheduling Pattern 52

Figure 7: The Effect of Changing Delivery Routes 53

Figure 8: Engine Performance Curves 59

Figure 9: Economy Driving Range 78

Figure 10: Additional Fuel Consumption Due to Acceleration 79

Figure 11: Average Journey Speed 81

Figure 12: The Tachograph and Charts 86

Figure 13: Tons Hauled per Shift 102

Figure 14: Cumulative Tons Hauled on Contract A 103

Figure 15: Vehicle Availability % 103

Figure 16: Ton to Kilometre Ratio – Operation B 103

Figure 17: CUSUM Graph 107

Figure 18: Eight-Year Projection of Costs and Expenditures for One Vehicle 113

Figure 19: Integrated Management Information System 114

Acronyms and Abbreviations

BCEA Basic Conditions of Employment Act

CCTV Closed-circuit television

CIPC Companies and Intellectual Property Commission

COF Certificate of fitness

COIDA Compensation for Occupational Injuries and Disease Act

COR Certificate of roadworthiness

CUSUM Cumulative sum of the variance

CW Drag coefficient: wind resistance

EEA Employment Equity Act

EDP Electronic data processing

FCL Full container load

FESARTA Federation of East and Southern African Road Transport Associations

GAAP Generally Accepted Accounting Practice

GCM Gross combination mass

GVM Gross vehicle mass

HGV Heavy goods vehicle

HP Horsepower

FOB Free on Board

IMO International Maritime Organisation

IPO Initial public offering

IRU