Supply Chain Discussion: The Impact of the Diesel Price Increase on the Industry

https://www.youtube.com/watch?v=MLR4E7gNHNs

In this discussion, John Maytham from Cape Talk Radio interviews Gavin Kelly, the CEO of the Road Freight Association, to unpack what this latest fuel shock means for transport operators and the broader economy.

South Africa is at an average increase of 47% to the diesel price. This has a massive impact, especially on small and mid-sized operators. At payment terms of 60 to 90 days, as is the industry standard, this puts significant pressure on cash flows.

Keys to reducing diesel use are through route optimisation and consolidation of freight from multiple customers.

Unfortunately, there isn't much clarity on when the situation will be resolved. South Africa does get 68% of its oil from Nigeria and Angola. Oil from these regions costs 10$ a barrel more than that acquired from the Middle East, however.

Hopefully, the situation is resolved before too long.

Source: YouTube/Cape Talk