Bad roads a nightmare as freight prices jump
The cost of transport is squeezing South Africa's agribusinesses dry as the country's crumbling freight transport infrastructure puts the brakes on the movement of goods from producer to market.
That's according to the most recent South African Food Cost Review released yesterday.
The review states that the cost of transport is the sixth most constraining factor of competitiveness for South African agribusinesses this year.
It also notes that the Department of Transport had acknowledged that the country's freight system was unable to meet the demand for cargo movements at competitive prices, with the desired service and quality.
The Food Cost Review identified a shift of agricultural cargo from rail to road "due to structural and inefficiency problems" even though road transport is R60 to R70 per ton more expensive. Transport costs of moving agricultural cargo were running at R7,8 billion a year in 2007.
But road transport has its own set of obstacles, according to Nico Hawkins, agricultural economist at Grain SA.
"Our roads are deteriorating on a daily basis."