ROAD FREIGHT TRANSPORT MANAGEMENT (HONS)

DR JOASH MAGETO
 OVERVIEW OF ROAD FREIGHT IN SA

• Accounts for over 76% of freight with 100% in urban

centers.
• Transports various items including
• Commodities, grains, liquid bulk, car parts, cars, containers

• Issues associated with road freight

• Overloading, congestion, road damage, pollution, accidents

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STUDY UNIT 1: OWNERSHIP AND ORGANISATION FORMS
 OWNERSHIP AND ORGANISATION

Select a form of ownership that is likely to meet the

needs of the business in the sector of the industry

concerned.

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 ORGANISATION FORMS

• The Sole Trader

• The Partnership
• The limited company
• Co-operatives
• Public Authorities
• Department of State
• The Municipality
• The Public Corporation

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THE STRUCTURE OF THE TRANSPORT
INDUSTRY

• The effects of Legislation on the functioning

and structure of the Transport Industry
• Relevant road legislations
• South African National Roads Agency Ltd (SANRAL)
• Cross-Border Road Transport Agency (CBRTA)
• Road Traffic Infringement Agency (RTIA)
• Road Traffic Management Corporation (RTMC)
• Why legislation?
• Transport is important to the economy, efficient operation is required.
• Some countries nationalize some modes e.g. rail or air transport
• Road freight transport is mostly private owned in SA
• Largest freight company is Transnet

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THE STRUCTURE OF THE TRANSPORT
INDUSTRY

• Does government legislation affect

ownership structure of freight transport in
South Africa? How?

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 ORGANISATION

• The Classical School

• Behaviour school
• Systems school

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 THE CLASSICAL SCHOOL
• Activities Objectives Determined
• Activities arranged in Managed one
groups individual
• Groups joined to other groups
• People fitted into structure
1. Specialisation
2. Definition
3. Delegation
4. Span of control
5. Chain of command
6. Unity of command

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 THE CLASSICAL SCHOOL
Principles of the classical organization
• Specialisation
• Specialists with lack of flexibility
• Definition of the line of authority.
• Authority and responsibility must be equal
• Delegation
• Give authority to lower level managers to make decisions within their sphere of
operation. The person must have capacity to make necessary decisions.
• Span of control
• Have a reasonable number of employees to supervise e.g. 6 to 10.
• Chain of command
• Number of layers in an organization (Top to Bottom)
• Unity of command
• One employee, one supervisor
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 LINE AND STAFF

• Line managers are those who have responsibility

for those activities which are concerned with the
prime objective of the company. In transport this is
the function of transporting people or goods from
one place to another.
• Staff managers are those who contribute indirectly
to the main function by providing services and
advice to line management – for example the
accountant.

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 ORGANISATION
THE BEHAVIOUR SCHOOL

The behavioural approach tries to create an organisation which:

• Achieves the objectives of the company while at the same time satisfying the
people who make up the organisation.
• Encourages high productivity and low absenteeism because people are
stimulated by the work they do.
• Enhances co-operation between managers and the workforce because
everybody is pulling in the same direction. Everybody has a clear idea of the
company’s goal and their own importance to the attainment of those goals.

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 ORGANISATION
THE BEHAVIOUR SCHOOL

Motivation employees is key if you want them to achieve the

organisation’s objectives.

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 ORGANISATION
THE SYSTEMS SCHOOL

• The system approach to organisation concentrates

on decisions that need to be made to achieve the
organisations objectives. Decision making, rather
than activity, is chosen for study because it is
through this process that policies are laid down and
actions taken that result in the future success or
failure of the company.

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 ORGANISATION
THE SYSTEMS SCHOOL (cont)

• The systems approach to organisation

consists of the following steps:
• Specify objectives
• List the sub-systems or decision areas.
• Analyse the decision areas
• Design the communications channels
• Group decision areas to minimize
communications burden - coordination

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 ORGANISATION STRUCTURE OF A
TRANSPORT COMPANY
• It is difficult to compare transport companies to manufacturing
companies but the process of business are very similar. A
manufacturing company buys raw materials or components,
undertakes work on the raw materials or components and then
sells the production.

• A transport company buys vehicles and buildings, in other

words capital equipment, sets up an operating system using the
vehicles to fulfill the major objectives of the company, and then
sells the safe arrival which is the product of the operating
system.

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 FINANCE

• The finance section has two main functions:

• Investments: It has to raise sufficient finance to buy

the equipment necessary for the company’s
operations and to allow for any future changes and
growth.

• Accounting: Controlling the use of the finance in

making sure that the business is efficient is not only
important for the success of the company but is a
legal requirement.

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 OPERATIONS
• There are three main functions of the operations section:

• Operating: Working out and implementing the vehicle

and personnel schedules to conform to company policy
and legal requirements.

• Maintaining: Making sure that the vehicles are

maintained both from the point of statutory safety
requirements and maintaining the value of the company’s
assets.

• Personnel: Making sure that the right people are

available to operate the vehicles which in transport
means checking licenses and qualifications.
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 MARKETING

There are three functions associated with the

marketing section:
• Advertising: Informing the public about the services
on offer.
• Selling: Price fixing, contract negotiating and after-
sales service.
• Market Research: Finding out what the customer
and potential customers require from the company.

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 THE COMPANY STRUCTURE

• Draw the organizational structure of you company and

critique it. How does it relate to a road transport
operation?

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 THE COMPANY STRUCTURE

• In a transport company the activities can be broadly

broken into four inter-relating parts:

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 THE COMPANY STRUCTURE

Policy- Formulates Co policy and

plans how objectives will be met
• Action group Policy group
Action group – implements and
• Planning group provides information to the policy
group
• Control group Planning group – advise finance,
Action Control technical and HR. technological
group group developments
Control group – Oversee running of
the company e.g. efficiency, quality
and effect of decisions on company
Planning operations
group

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 INTERDEPENDENCY OF FUNCTIONS

Cargo/passenger Cargo/passenger Cargo/passenger

procurement processing loading

Cargo /passenger Cargo/passenger

unloading transport

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 INFORMATION FLOWS IN A
TRANSPORT COMPANY

• The shipper or consignee of the freight will contact the company

about the intended journey, how the freight can be loaded, the
size of the consignment, the type of commodity and packaging
and any special handling requirements. This consignment of
freight is booked for loading and the information sent to the
documentation section. The freight is collected, checked,
loaded and dispatched.

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 INFORMATION FLOWS IN A
TRANSPORT COMPANY

• The flow of information between the various sections in the

company can be illustrated as in the figure The arrows on
the lines indicate the direction in which the information has
to pass. Most of the information and communications in
the action activity are concerned with the physical process
of helping the flow of goods or people through the system.

Marketing Booking Documentation

Freight Vehicle
Handling Dispatch

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