♟ Contracts And Contracts Sourcing ♟

This Video Content Was Taken From The Transport And Logistics Investing Blueprint 2020.

CONTRACTS & CONTRACTS SOURCING

Question
1) How do we get good & well-paying contracts for our Truck(s), Trailer(s) or yellow machines

The industry has of late been invaded by contract sharks, people who somehow manage to get a lot of good, long period, reasonable, well-paying contracts from small, medium and large companies, when they themselves are briefcase companies connected but owning no trucks and trailers of every size and description for sub-contracting purposes

1.1) So you must first of all shop around for long period, well-paying Main Contractor’s contract(s)
and secure one before you buy any trucks, trailers and yellow machines.

1.2) Avoid at all costs settling for a sub -contractor’s contract(s) because they are a very risky investments.

The Reasons are many but chief among them are:

1.3(a) working capital budgets per truck & trailer are very high as you must fork out money for diesel oils, tyres, insurances, service costs, toll gates and driver wages and subsistence etc for a long period of between 45-60 days before you receive your first payment.

b) thereafter they pay you some 15, 30 and 60 days after submission of your monthly loads schedules or claim statements

c) at times some don’t pay you at all unless you take them to court and/or you start fighting them.

d) as if the headaches associated with late payment or no payments is not enough, these main contractors are famous for paying low rates, to sub-contractors and paying themselves good monies for doing nothing and for their multimillion rands contractual agreement papers.

e) and ofcourse it’s not all of them, so please select them, after carrying out due diligence verting
process(es), to satisfy yourself about their trustworthiness rating(s).

f) you must go for local contracts first until such time that you fully understand the Mathematics of this lucrative industry.

g) take on cross border contracts only if you are the main contractor

h) but if it is for your company’s survival, do your mathematics first with a clear conscience before
signing up

i) make sure you shop around for the proposed route rates, with other industry players and long distance drivers using those routes, before committing yourself e.g. Zimbabwe, Zambia, DRC, Tanzania, Malawi routes etc

j) you must assess all the roads & country related risks, spares availability and road assistance packages, in case of breakdown(s) before taking up loads contracts

k) In respect to payments for all cross border routes or loads you must make sure they pay 50% - 60% deposits, as soon as the truck finishes loading the customer’s goods, before it leaves the collection point and the balance of the agreed amount once the truck or driver reaches its or his destination, either before off-loading or soon after offloading before the driver leaves the delivery point

L) the driver must never leave the point of delivery before the money is in your account NEVER EVER trust nobody. I mean no one, don’t even trust yourself coz you can easily misjudge and totally loose out.


Stay working and stay hungry!


FWM Khaya Mahlangu: 079 351 6337 or 060 342 1826.

Thank you 🙏