Open road tolling - logistics costs to rise by up to 15%

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Toll_gantry.jpgWhile there may be some uncertainty over the dates on which the tolling of Gauteng highways will begin under the Gauteng Freeway Improvement Plan (GFIP), the cost of refurbishing the roads makes it a certainty that the tolling will go ahead.
Toll Fee Structure.pngPublic pressure may result in a reduction of the proposed tariffs for motorcycles, cars, heavy vehicles, etc., however using the latest fee structure (see table alongside) Johann van der Westhuizen of e-Logics presented the impact of the open tolling on fleet management and logistics to delegates at SmartProcurement World 2011.

Impact on operations

The potential volume of transactions should be a concern for fleet managers.

Toll Cost Modelling.png“Each gantry creates a transaction. If 50 vehicles pass through 10 gantries each work-day then 10 000 transactions per month will be generated, explained van der Westhuizen.

These transactions must then be validated (is it one of my fleet vehicles? Does the transaction reflect the correct discount?), before payment. There will be a seven-day grace period before a toll gantry transaction incurs interest charges, and fleets can setup key accounts with accompanying payment structures, he said.

The toll costs must then be allocated to a cost centre or the correct customer.

Johann van der Westhuizen_cropped.jpg“How will you know which of your customers has to be billed? How do you manage after-hours or weekend use of vehicles? How do you manage a sub-contractor’s toll fees?” Van der Westhuizen asked delegates.

Toll related risks

Stringent management of each toll transaction is required owing to the potential for fraud and penalties:

  • Use of fraudulent or duplicate vehicle license plates.
  • Misuse of stolen e-tags.
  • Fraudulent linking of vehicles to accounts.

Furthermore, there are cash-flow implications if organisations cannot recover costs from end-customers or employees where trips in relation toll usage are not managed.

The de-fleeting of vehicles is also of great concern, said van der Westhuizen, making reference to a situation where there is a delay in the e-Natis vehicle registration system removing a vehicle from an organisations name while the vehicle still incurs toll costs.

Administration and service fee costs

The cost of administering tolls is estimated at 5% - 15% of an organisation’s incurred toll fees, said van der Westhuizen.

As a percentage of national transportation cost, Gauteng toll fees are sighted at 0.5% – 2%. As a percentage of Gauteng province transportation cost, 4% - 15%.

He advised that violations (unpaid toll fees, stolen e-tags, etc.) are very likely to be subject to an aggressive penalty regime.

The information in this article represents the views of e-Logics and does not represent SANRAL, ETC or their agents in any way. All estimates, statements and timelines are based on publicly available information.

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