Business Meeting

Core Competencies - why and how these five essential skillsets drive a successful road transport business

TOPIC 1

Core Competencies

  Have you ever seriously thought about which essential skillsets make-or-break a road transport operation? “Not really” is a common answer. Some say “loading and driving a truck”. Some might even answer “a tough, kick-ass management style”. Well, all these are among a lot of skillsets deployed in the industry but we need get more specific in this Conversation as road transport is probably one of the most challenging service industries in which to invest shareholders money.

  Essentially, all service industries are difficult and very challenging to provide tangible evidence of quality and value relative to cost. In other words, customer satisfaction in terms of what we refer to as a “Value Quotient” (Function over Cost) that must be greater than one. This is a very difficult call to make right now as opinions can be subjective and difficult to monitor accurately.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  Let’s take a closer look at these five functions in road transport and how they are likely to impact in the year ahead. Apart from the normal administration functions of operating a company, road transport essentially provides a service; that of moving mass over distance (ton-km). It however requires five functions to accomplish this:

 1.   The load

 2.   The road

 3.   The truck

 4.   The driver and

 5.   Load scheduler

1) LOAD

  The permutation of these five factors can be infinite; loads are greatly diversified and it all begins with a premise that someone (customer) has a need to move something (mass) over a distance (kilometre). While it might be argued that the “someone” might own the load and the operation, does not change the fact that “someone” originates the need to move the load, and for the purposes of this conversation that “someone” is considered a Shipper. Without a customer there is no justification for the other four components. Accepting this rational, we can conclude that the first essential skillset is that of finding a customer (Shipper), in other words Marketing and Sales. 

2) ROAD

  As we are talking road transport the load will normally be moved on a public road, alternatively on an access-controlled private road (Toll road), essentially both call for compliance with the National Road Traffic Act (Act No 93 of 1996) (NRTA) and Road Traffic Regulations (RTR) as amended.

 

  All motor vehicles with a permissible maximum mass >3 500 kg must be registered and display an Operator Card showing the Registered Operator personally responsible for the safe use of such vehicle under Section 49 of the Act. Regrettably the Act does not require such person to provide any evidence of competence to hold this position, other than the registered Title Holder/Owner’s written appointment of such person as the Proxy.

  For the purposes of this exercise we suggest the position be managed by the company’s Transport Manager, not an administrative person who manages registration and licencing of vehicles as this crucial responsibility requires a competent person totally familiar with road transport legislation and operation.

3) TRUCK

  It is seldom realised by senior executives that road transport is one of the most Capital-intensive investments per Rand of revenue, and possibly the most costly to preserve in an extremely robust operating environment. These issues will receive extensive coverage in this Conversation as the importance of Asset Preservation reaches far beyond simply managing the economic life of depreciating assets.  

  To be effective the position of Fleet Manager demands a technically qualified road transport engineer; with no less than a decade of fleet engineering experience in servicing and maintaining heavy commercial vehicles.

4) DRIVER

  Generally, a Driver is someone who has a proven competency in operating a category of motor vehicle where the permissible gross operating mass exceeds 3 500 kg as prescribed in the NRTA and RTR. Such driver also requires what is termed a Professional Driving Permit (PrDP) (regulation 115).

  It might come as a surprise to some that drivers are the only people in road transport who are compelled to prove competency before being authorised to operate certain classes of motor vehicles in their capacity as employees.

  Regrettably many in the industry do not fully appreciate or recognise the extent of drivers’ contribution in building success of the business and view it as a sort of secondary role in serving shareholders’ interests.

  As the skillsets of a driver reach far beyond simply operating a commercial vehicle on a public road we will focus on how to position and manage these to fulfil a major role in building and preserving company relationships with Shippers (customers) and gain the respect drivers richly deserve.

 

 

5) LOAD SCHEDULER

  While sophisticated electronic TMS together with vehicle telematics provide the industry with unimaginable real-time on-board accuracy and control over service delivery challenges, Schedulers continue to fulfil a critical function of satisfying Shipper’s needs. This is where the Value Quotient is finally assessed by Shippers. This is where customer relationships are nurtured or destroyed. This is where promises are fulfilled and provide a critical barrier against competing bidders. This is where the talking stops and the rubber meets the road.

Focus is on South Africa and neighbouring States

(While we are addressing issues relating to SA, they are typical of most countries.)

 

This Conversation is intended to stimulate thought on just where you are focusing, in what will certainly be SA’s most challenging post-apartheid period, filled with uncertainty and economic challenges certain to have a serious impact on supply and demand for goods and services.

  Given the current low economic growth forecasts and what may be SA’s most challenging period yet, Rating Agencies are ready to pull the plug. So it’s time to assess your situation and batten-down-the-hatches for what could be a rough ride for some considerable time to come.

Let’s have your responses to this - the first of 10 Topics under discussion this year.

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Johannesburg, South Africa