It is important to align organisations on a cultural and systematic level when attempting to introduce a crucial regulatory reform. Essentially having the right mix of organisational behavioural; market segment specific; and prevailing cultural interventions should inform policy design and ease implementation (quite obviously . Last week, the Road Freight Implementation consultation session took place at the Primmer Hotel OR Tambo. The Road Freight Strategy is the principle instrument for intervening and reforming the road freight sector and it is a multi-sectoral, and multidisciplinary strategic document guided by the National Logistics Strategy of 2006— which holds true till today. In this short piece, a brief outline of the core instruments of the Road Freight Strategy are outlined, from there the inputs sent to our Department of Transport are summarised.
At the core, my argument is that we need deeper reforms within the DoT, associations in the road freight industry, knowledge centres in the industry and the corporate sphere. Modern policy reforms lean on formal and informal trajectories of influence— which make them rather spectacular and juxtapositional against the traditional legal and clause based “policy statement” environment. As such, this approach in this short piece, leads the edge of transport regulation in a confrontational direction to foster relationships and collaboration. This is particularly difficult to do, given that (a) the road freight market is highly saturated; (b) strikes have plagued the industry this year to an extent that they’re beginning to reflect in their monthly income; and (c) task-teams have seemed to serve only a specific issue: not the entire series of causes which plague the industry.
The vision for the road freight industry in SA, is to enable an effective regulatory and institutional frame-of-practice in which systems; technology; and efficient management are facilitated.
What intrigues me is that the core objectives underlying this strategy are consistent with emerging transport policy narratives, namely: economic regulation; infrastructure; market entry and practices; professionalisation; and institutional reform. Each of these major objectives have significant challenges to respond to, but at the heart of these is the fact that road freight market has not been regulated in significant economic ways. Be it the nature of market entry, operator dominance, market development, partnership and financing. Moreso, the lack an institutional authority to govern the market in some respects without infringing on its free-market nature needs to confront the fact that:
“The road freight industry is totally dependent on the levels of industrial output and is highly competitive; it therefore offers limited opportunities for extensive additional employment.”Road Freight Strategy, 2017
This inherent dependency, requires significant alignments between primary and secondary sectors feeding into the freight industry; meanwhile ensuring appropriate enforcement controls are in place to support the sustainability of safe, secure and efficient movements of consignments and operations. Moreso, the strategy is not devoid of considering the role of rail freight. However, their main proposition is that competitive rail freight capacity is needed before a deep relationship can be fostered. All of which need to be part of an information system that already has a comprehensive framework one of our post-graduate students shared with me: The National Freight Information System (this I shall discuss on another occasion).
What would make our efforts confrontational? Over the past few years, the road freight industry has become more self-destructive and informal in the manner in which it articulates, operates and disseminates its practices. Simultaneously, the emergence of various technologies, web platforms and solutions has resulted in a situation where there’s more room for more formal strands of cash, consignment, driver, load, service and vehicle exchange. The two recommendations made for the industry were the formation of a National and Provincial Freight Transport Boards, which will be responsible for the administration, coordination, management, development and planning of freight transport activities within their jurisdictions. Furthermore, there is a need for a policy and practice space that enables more genuine confrontation between various stakeholders in the road freight industry— big or small. The role of the provincial authority is to administer the market, regulate entry and facilitate integration with industrial needs. The national board is composed of provincial representatives and various other stakeholders involved and influenced by the road freight transport value chain.
An entity of this nature also facilitates district and municipal planning beyond the scope of the traditional integrated transport plan. Largely due to the need for a standard data administrative framework and language for the freight information system at national level. Simultaneously, it is a great place to share and develop critical ideas and important points of entry for entrepreneurship in the freight indsutry. However, this will not come without challenges. There are significant incentives to control the market with an entry fee, that is back-handed; it may also be alluring for municipalities not to develop freight transport plans because they have integrated transport plans; lastly DoT may feel that there is no need to have these functions because major corridors are a priority. However, it is important to solve local level problems through local stakeholder engamgent spaces and consistent economic regulation across all sectors.
The lack of decisions, and blatant lag within the DoT and industry practitioners is a significant factor in the market now. Since the deregulation in the 70’s the free-market principle seems to be realising not only diminishing returns, but also symptoms of a market failing. At a policy level, a deeper drive toward a collaborative and entrepreneurial policy leadership is necessary to galvanise market actors now and into the future. As such the Road Freight Strategy still needs to confront:
- Energy and technology transitions which are already en-route;
- Intermodal and infrastructure alignment with Special Economic Zoning and the Department of Trade and Industry; and
- Economic regulation and incentives in line with the Single Transport Economic Regulator (STER).
Thank for reading, and more on this topic later.