NABC Transport Sub-Sector Codes for the Road Freight Industry

Road Freight Sub-Sector Code
Introduction

This SS Code applies to Road Freight Transport for Logistics and Allied Services for Reward Industry and includes:

Supply chain management companies;
Logistics companies;
Trucking companies;
Transport management companies;
Transport brokers;
Associated labour brokers;
BEE Operators;
Management companies for owner drivers;
SA registered cross border operators;
Parcel delivery services;
Motor ferry companies;
Cash in transit companies.

Road Freight Ownership Scorecard

The Ownership Scorecard

In order to score the points for Net value the organisation must ensure that the net economic interest of the black equity participants is 60% of the 25% within 5 years. If this is achieved, it will be deemed that the ownership fulfilment has been achieved.

Stakeholders will consider a variety of ownership models, including:

Joint ventures;
Sale of assets;
ESOPs; and
Collective/ broad-based ownership schemes.

The measurement of ownership is the same as the one contained in the Codes.

Road Freight Sector Owner Driver Scheme Policy

There are five available options for empowerment:

Existing status – employed drivers assisted through accelerated training inclusive of training related to Business Management, which should open up opportunities for promotions and progression.
Group Incentives – collective sharing of benefits between the company and the employees.
Collective Ownership – drivers belong to a group that owns the vehicles.
Share Ownership – the group owns vehicles and has shares in the company.
Individual owner drivers.

Key elements of an Owner-Driver Scheme:

Sponsoring corporate that provides the business;
Owner drivers that supply the services;
Owner driver responsibility in respect of the retention and development of the business;
Finance house; and a
Business advisor.

Critical Success Factors that ensure the sustainability of the Owner-Driver Scheme

NABC Critical Success Factors for the Owner Driver Scheme

Business training;
Management training and business skills transfer;
Change of mindset will empower the individual and invest in asset ownership and the promotion of independency;
Benchmark – the provisions of the relevant labour and taxation legislation must be considered and inform such benchmarking;
Preferential contract, sustainable tariff and genuine independent contractor status;
Transparency:

        o    The identification of a person who will coordinate Owner-Driver Schemes and liaise between Owner-
               Drivers and the Principle Company or management company.
        o    The availability of a dedicated contract and guaranteed volumes.
        o    Accreditation of management companies.
        o    Full ownership of the vehicle at the end of the period.
        o    The identification of responsibilities of Owner-Drivers regarding admin functions.

Key Objectives of the Scheme

Empowerment of the individual and his/her heirs;
Variability in cost for the company.

Criteria

The scheme will work to the benefit of both company and owner-driver, if the following issues are identified and addressed:

Training;
Entrepreneur
Mindset change of the owner-driver.
Mindset change of management.
Benchmarking;
Routes;
Sustainability;
Pricing;
Contract payment cycles- payment made within 14 days of date of invoice;
Uniformity of cross border charges; and
Identification of the elements of benchmarking.

Go Live

Pilot in an area;
Resign as an employee;
Go back as en employee if not successful; and
Timeframes and guarantees.

Owner-Driver Contract

Should protect the owner-driver;
Should include penalties to encourage good performance;
Transparency;
Share risks and rewards;
Should have payment, which is output, and results based;
The development of standard guidelines;
Should include conditions pertaining to rate increases.

Conclusion
An Owner-Driver Scheme can work well, if it is a joint effort between management and labour and not meant as a means of shifting the burden of cost by the employer. If the objective is primarily aimed at empowerment, that would yield investment, efficiency and facilitation of asset ownership, from which both parties would benefit.

The Management Control Scorecard

NABC Road Freight Management Control Scorecard

If the organisation does not distinguish between Senior Top and Other Top Management, it may combine the two into “Top Management”, which is measurable as a single indicator with a target of 40% and 2.5 weighting points.

Management Control Sub-Minimum Target Matrix

Sub-Minimum Target Matrix

The Employment Equity Scorecard

NABC Road Freight Employment Equity Scorecard

The EE Scorecard

If the organisation does not distinguish between middle and junior management, both may be combined into management which is measurable as a single indicator with the target of 68% with a 1.75 weighting points.