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AFTER many months of debates, court appeals and drive-slow protests against Gauteng’s electronic tolling (e-toll), it seems this controversial highway tolling system will go full steam ahead.
Besides the Opposition to Urban Tolling Alliance’s public opposition to the implementation of the system on behalf of motorists using the freeways, a number of business organisations have raised general concerns on the additional burden e-tolling would put on their pockets too.
The CEO of the South African Chamber of Commerce & Industry (Sacci), Neren Rau, says businesses in central regions like Gauteng face challenges with how expensive it is to transport commodities via road.
“As a nation we need to focus on reducing the costs, and e-tolling won’t help,” says Rau, adding that its economic impact will be felt far beyond Gauteng.
Deloitte Consulting director Chad Schaefer says it is important for motorists who’ll be using Gauteng’s e-toll routes to consider the benefits and absorb the costs.
“Everybody doing business in Gauteng, including individuals, are in the same position.
"It becomes a business decision which involves proper budgeting, determining how much the toll increase will affect the business, how much cost must I [as the business] absorb and how much will be pushed onto the customer.”
Since any business chooses where it does business, it also needs to consider the accompanying costs, Schaefer points out.
Rau acknowledges that Sacci’s members are obliged to pay e-tolls, but he’s concerned that about two thirds of the money collected will go towards running costs such as e-toll offices at malls, while only a small portion will go towards actually maintaining the roads.
“There’s always resistance whenever there’s an increase in tax or fuel levies. Business needs to expect that these things happen, and not be surprised,” says Schaefer.
“Two years from now they will be accustomed to it.”
Could e-tolling cause staff retrench ment?
“Businesses don’t take these decisions lightly, especially SMEs (small and medium enterprises). They try to hold on to the people they employ,” says Rau.
While he doesn’t believe many businesses will retrench employees due to e-tolling as such, it could be a contributing factor where retrenchment is already being considered for other reasons.
These include the poor economic outlook, the rising cost of fuel and other basic services and poor consumer confidence.
In an article entitled How to assess the impact e-tolling will have on your organisation, Deloitte Consulting suggests that businesses should not only be incorporating e-toll tariffs into their cost structure, but also re-evaluate their current distribution network and develop strategies to optimise it.
On the other hand, employees who use company vehicles, for instance, could help reduce company costs by using technologies such as teleconferencing or Skype.
How to run an ‘e-toll-savvy’ business
If your business is forced to use e-tolled roads, here are some tips:
• Do a cost-benefit analysis. Know the impact e-tolling will have on your business, says Schaefer. Understand different impacts on margins between using e-tolled highways and alternative routes.
• Trim your budget. Make a checklist and see where within the business you can cut costs.
• Consider other modes of transport. Consider alternatives such as rail, but keep in mind that lower cost could also mean reduced efficiency.
• Know when to transport goods. Minimise e-toll costs by transporting goods during times when off-peak rates would apply.
• Look at your fleet. Although this could be a luxury for some SMEs, having a fuel efficient truck instead of an old fuel thirsty one could work out cheaper.
• Subcontract your fleet. This could be cheaper if costs are split among the businesses that need their goods to be transported.
• Dodging the e-toll gantries and using alternative routes is not recommended. While this could be tempting, Rau warns that you could end up spending more on fuel because of the slower traffic on such routes.
- Finweek
For more, go to finweek.com or follow Finweek on Twitter.
Besides the Opposition to Urban Tolling Alliance’s public opposition to the implementation of the system on behalf of motorists using the freeways, a number of business organisations have raised general concerns on the additional burden e-tolling would put on their pockets too.
The CEO of the South African Chamber of Commerce & Industry (Sacci), Neren Rau, says businesses in central regions like Gauteng face challenges with how expensive it is to transport commodities via road.
“As a nation we need to focus on reducing the costs, and e-tolling won’t help,” says Rau, adding that its economic impact will be felt far beyond Gauteng.
Deloitte Consulting director Chad Schaefer says it is important for motorists who’ll be using Gauteng’s e-toll routes to consider the benefits and absorb the costs.
“Everybody doing business in Gauteng, including individuals, are in the same position.
"It becomes a business decision which involves proper budgeting, determining how much the toll increase will affect the business, how much cost must I [as the business] absorb and how much will be pushed onto the customer.”
Since any business chooses where it does business, it also needs to consider the accompanying costs, Schaefer points out.
Rau acknowledges that Sacci’s members are obliged to pay e-tolls, but he’s concerned that about two thirds of the money collected will go towards running costs such as e-toll offices at malls, while only a small portion will go towards actually maintaining the roads.
“There’s always resistance whenever there’s an increase in tax or fuel levies. Business needs to expect that these things happen, and not be surprised,” says Schaefer.
“Two years from now they will be accustomed to it.”
Could e-tolling cause staff retrench ment?
“Businesses don’t take these decisions lightly, especially SMEs (small and medium enterprises). They try to hold on to the people they employ,” says Rau.
While he doesn’t believe many businesses will retrench employees due to e-tolling as such, it could be a contributing factor where retrenchment is already being considered for other reasons.
These include the poor economic outlook, the rising cost of fuel and other basic services and poor consumer confidence.
In an article entitled How to assess the impact e-tolling will have on your organisation, Deloitte Consulting suggests that businesses should not only be incorporating e-toll tariffs into their cost structure, but also re-evaluate their current distribution network and develop strategies to optimise it.
On the other hand, employees who use company vehicles, for instance, could help reduce company costs by using technologies such as teleconferencing or Skype.
How to run an ‘e-toll-savvy’ business
If your business is forced to use e-tolled roads, here are some tips:
• Do a cost-benefit analysis. Know the impact e-tolling will have on your business, says Schaefer. Understand different impacts on margins between using e-tolled highways and alternative routes.
• Trim your budget. Make a checklist and see where within the business you can cut costs.
• Consider other modes of transport. Consider alternatives such as rail, but keep in mind that lower cost could also mean reduced efficiency.
• Know when to transport goods. Minimise e-toll costs by transporting goods during times when off-peak rates would apply.
• Look at your fleet. Although this could be a luxury for some SMEs, having a fuel efficient truck instead of an old fuel thirsty one could work out cheaper.
• Subcontract your fleet. This could be cheaper if costs are split among the businesses that need their goods to be transported.
• Dodging the e-toll gantries and using alternative routes is not recommended. While this could be tempting, Rau warns that you could end up spending more on fuel because of the slower traffic on such routes.
- Finweek
For more, go to finweek.com or follow Finweek on Twitter.
