The Challenges and Risks Associated with Contractor Distribution

South Africa is relying more and more on the transport industry, from large corporate fleets down to the one-truck owner, to handle distribution.

Multi-page cartage contracts are signed and the parameters of the contracted trucking company and contractor are embedded in this contract. The rates (most important) and conditions of carriage are pre-defined and understood by both parties.

All well and good

Small Fleet owners beware!

Many entrepreneurs go out and buy second hand trucks and then seek transport contracts to utilise them. It is seen as an easy way of making a living. But many risk-aspects are overlooked.

Here are some points to ponder:

  • If not sure of the associated risks, then please seek advice before taking the plunge.
  • Many of these contracts are obtained from the so called “middle man”.
  • In many cases he is not a certified and registered Operator on the NATIS System. He may however have a registered business under which he operates. He has contracts with
  • Consignors to deliver goods but does not own any trucks. The contractor attracts these small operators and a transport contract is signed. All the goodwill is offered at this stage of the association - as with most cartage contracts, all the parameters of the contract including rates; distances and payment methods are clearly defined in the written contracts. The truck is then put to work.

But have the following requirements, by you as the registered “Operator” been ironed out and identified in the written contract?

  • It is doubtful that the written agreement will contain the following:
    In most cases the roadworthiness of the truck will be the responsibility of the owner.
    If you are unsure, then you need to take a second look at the contract.
  • The chances are that the truck will be operating far from your domicile and therefore difficult to control.
  • You will not have any control of your truck.
    This truck is an expensive investment and needs to be controlled professionally in order to be a successful. The issues that need to be taken into account are:
    • Preventative maintenance and servicing needs to be practiced at regular intervals in terms of the manufacturer’s specifications. Is the contractor aware of this?
    • Do you have access to the fuel account? Does the contractor share this with you or does he just make a global deduction off your commission?
    • Is the driver driving your truck correctly? Is he keeping to the speed limits? Does he drive within the Green Band Driving Range?
    • What is your trucks fuel consumption? Is a log book kept?
    • Are the tyres being pressure checked regularly? Does the driver or the contractor know the correct tyre pressures to be maintained?

Comment: It is doubtful that the contractor will be aware of these issues. If you don’t have daily access to this information, then your business is in jeopardy. You as the Registered Operator in terms of the Operator Card on your truck are responsible for the antics the contractor and driver get up to. You are at risk if these factors are not taken into account.

  • You will not have full selection or control of the driver.
    He will probably be a contact or family member, or close friend of the contractor.
    He is the most important employee and needs to report directly to you.

The questions that need to be asked are:

  • Is the driver properly qualified? License code EC
  • Is his PrDP valid?
  • Has he had any formal training?
  • What experience has he had?
  • How long has he been driving?
  • Who was his last employer?
  • Is there any past history of his employment?
  • Does he know how to load a truck or know when it is not loaded correctly?
  • Does he do the mandatory pre-trip check inspection each shift?
  • Does the contractor keep a record of the driver’s pre- trip checks on file?
  • Does the contractor keep a record of the driving hours of the driver?
  • Does he belong to the Bargaining Council?
  • Do you pay him directly? If not, do you know how much is being paid and taken off your commission?
  • Do you have copies of his ID documents, know his name and address and contact details?

Comment: The chance of having access to this information is about NIL if you don’t control this driver personally. The Contractor is probably not aware of these very important requirements.

The choice of a cartage contract needs to be taken very seriously and deep thought needs to be given to your rights in terms of the agreement.

Remember you are the one at risk if anything goes wrong. Do not sign a contract without considering the above. Make absolutely sure that the agreement includes everything to cover you and your organisation and don’t back down to unreasonable pressures and suggestions from the person offering you the contract just because you want work for your truck

Written by

Andy Savage

e-mail savages@telkomsa.net

e-mail andysavage4@icloud.com

www.technicalfleetmanagement.com

Also view:

Sharing the Roads with Trucks

Fleet Management, Logistics and Road Safety

Consignor/Consignee Road Freight Legislation and Overloading

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