TRANSPORT-SOUTHERN AFRICA: Opportunities for New Breed of Entrepreneurs

By James Hall Reprint | | Print |

James Hall

JOHANNESBURG, Jun 6 2003 (IPS) - As the highways, bridges, customs offices and the rest of Southern Africa’s road transportation infrastructure expands, new opportunities for small business people to enter the freight business are emerging, offering a literal route out of poverty.

"A new breed of entrepreneurs is taking advantage of greater demand for shipped goods by road. These are indigenous Africans who want to get into business. It’s not easy. There are regulations, and even dangers," said Amos Nhlabatsi, a freight clearance official with the Swaziland customs department.

"I like to subcontract work to small trucking firms whenever I can. It is part of a black empowerment strategy the government wishes all the larger firms to follow," Willie Stuart, president of Speedy Overboarder trucking service, told IPS.

Stuart’s company is headquartered in Johannesburg, with offices in Durban, South Africa, the site of one of Southern Africa’s main seaports, and Gaborone, Botswana. Trucks are in constant motion between these locations, as well as other countries of the Southern African Development Community (SADC), like Swaziland.

"The trucking business is lucrative, but it is also very competitive. There is a lot of shakeout, and smaller start-up companies sometimes do not survive their first year. It is painful to see a retired civil servant use all his pension to purchase a truck, and then lose it all because he is not familiar with the business," Stuart said.

Literally tens of thousands of trucks ply the highways of the region daily. Landlocked nations like Lesotho, Swaziland and Zimbabwe are increasingly dependant on road freight to bring imports in and take exports out to world markets.

2003 has seen a marked upswing in the need to transport grain, because of widespread drought and food shortages throughout the region. Trucks are pressed into service, and food relief organisations like the World Food Programme anticipate a similar demand next year.

"Anything rail used to be able to do, trucks can do today. Trucks are getting so large, they can easily transport bulk items," said Gavin Byrd, general manager of Unitrans, one of Southern Africa’s oldest and largest companies.

"Increasingly, trucks are able to do what only air freight was able to do, like transport fragile items with short lifespans, like cut flowers and ripening fruit," Byrd said.

The sophisticated climate controlled containers that are mounted on flatbed trucks are usually beyond the financial means of small trucking companies. Often no more than a single second-hand truck at first, these companies rely on word of mouth to find customers, and low prices.

One single-truck owner, Henry Dube of Nelspruit, South Africa, said he failed in his first attempt in the business. "I thought that by offering the lowest prices, I could find business. But a combination of high petrol prices and customs duties hit me hard, and I wasn’t prepared to continue in the red," he said.

A knowledge of customs regulations is essential to the business. Fortunately, the SADC nations are negotiating to streamline the customs processes amongst themselves. Presently, a truck bearing goods trying to enter South Africa may wait half a day to be processed by customs officials. The wait to enter Swaziland can be three hours, but a wait of three days is not uncommon in Zambia.

"I went to Zambia to see what conditions are like for the trucking businesses, and when I saw the delays at the border posts, I thought that was not for me," said Speedy Overboarder’s Stuart.

"If you have a truck, you can make money," said Evah Nxumalo, a resident of Manzini, the commercial hub of Swaziland. "Everybody needs a truck to transport this or that."

Nxumalo is voicing a common perception, because the demand for trucks of all sizes is constant. But it is also erratic, as those who start trucking companies discover.

"We struggle finding customers until we could get some guaranteed contracted business. Once we had contracts, we knew we had a steady flow of business for a set period of time," said Shadrack Mnisi of Sharp Freight, Swaziland’s only trucking company owned by Swazis.

Security is also a problem.

"We have had a truck hijacked. The driver was pulled out of the cab at gunpoint. We recovered the truck in a field a few hours later. But the goods inside were all gone," recalled Mnisi.

Southern African roads can be dangerous in terms of road safety as well as crime, leading to high insurance premiums many small companies struggle to pay.

"The first thing a customer asks us is if we are insured. They have heard about the hijackings," said Dube.

Despite all the challenges, start-up trucking firms remain popular for small business people and aspiring entrepreneurs. Regional governments assist where they can, offering tax breaks for investment in vehicles, and tendering transport jobs to these little firms.

Business promotion organisations like national chambers of commerce and enterprise ministries also hold workshops to educate would be truckers on customs regulations and taxes.

"All business involves paperwork, but trucking seems to involve more red tape, because so many borders are crossed," said Dube.

But he intends to stick with it. "I hear that things will soon settle down in (strife-torn) Zimbabwe. All the big trucking companies have left there, and that means there will be a real demand when the economy picks up. I intend to be one of the first to start a route to Harare from Johannesburg," he said optimistically.