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The Road Freight Association has put a blunt warning on the record: transport companies are disappearing overnight because their contracts and rates do not cover what it costs to run compliantly. The problem is not that rates are low. It is that the operators setting the market rate are not carrying the same cost base as the ones bidding against them.
Business Insights
19 August 2026 • 5 min read
Compliance costs money. Non-compliance does not -- until the day it does. In a tender priced purely on rand per kilometre, that asymmetry hands the work to the operator who has skipped the roadworthy, underpaid the driver or run without proper cover. The compliant operator does not lose on efficiency. It loses on arithmetic.
RFA chief executive Gavin Kelly has described the pattern plainly: transport companies vanish overnight because their contracts and all their rates are unsustainable. RFA chairperson Penwell Lunga framed the cost side at the association's 2026 convention, noting that diesel had risen by more than 60% over the year and that fuel accounts for more than 40% of operating costs for many operators.
The association's specific concern is not the level of any single cost but the interaction between costs and contracts. A three-year haulage contract priced in 2024 on 2024 diesel, 2024 wages and 2024 insurance is now being executed against 2026 inputs. When the rate has no escalation mechanism, that gap is absorbed entirely by the transporter -- quietly, month after month, until the business runs out of working capital rather than out of work.
The cost concentration: diesel represents more than 40% of operating costs for many South African road freight operators -- and a further increase of roughly R2.73 to R2.89 a litre is projected for 1 September 2026. (Source: Road Freight Association / Central Energy Fund projections, 2026)
The RFA has been explicit that compliance costs are producing an uneven market. Operators who follow the rules carry higher costs and risk being pushed out by competitors who do not. This is the mechanism that makes the rate problem structural rather than cyclical.
Consider what a compliant operator actually funds: roadworthy certification and preventative maintenance rather than reactive repair; correctly licensed and medically cleared drivers on bargaining-council wages; goods-in-transit and liability cover at realistic sums insured; hours-of-service discipline that costs productive time; permits, tolls and cross-border authority renewed on schedule; and increasingly, tracking, fatigue monitoring and corridor security measures. Each of those is a line on a costing sheet. None of them is visible in a rand-per-kilometre comparison on a tender document.
At a Transport Forum session on 18 August 2026, Kelly opened with an overview of the top risks facing fleet operators this year, followed by sessions on driver wellness and fatigue management, corridor security, predictive safety technology and labour compliance. That agenda is a useful checklist precisely because each item is a cost that a non-compliant competitor simply does not incur.
The commercial answer is not to match the cheapest bid. It is to stop quoting a single all-in number. An itemised rate -- base line-haul, named fuel adjustment, security surcharge on defined high-risk corridors, waiting time beyond an agreed free period, cross-border administration -- turns an invisible cost base into a visible one and gives the client something to compare other than a total. Clients who genuinely cannot tell the difference between a compliant and a non-compliant carrier will discover it in a cargo loss, a licence suspension or a liability claim they cannot recover.
Calculate your true cost per kilometre including every compliance line, set it as a floor and decline work below it -- a contract priced under cost is a slower version of losing the client. Move to itemised quoting with a named fuel adjustment mechanism before 1 September, and renegotiate any multi-year contract that has no escalation clause. Where a client insists on the cheapest number, put the compliance difference in writing so the risk transfer is on record.
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Visit Laaimylorrie.com| About the Author | |
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Andre Klynsmith Entrepreneur & Technology Enthusiast Andre's expertise spans technology, blockchain, transport, and logistics -- with a passion for innovation and driving positive change across industries. |
| Source: Freight News -- Unsustainable rates threaten operators, RFA warns View source › | August 2026 |
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