The prosperous owner/driver programme ran by JSE listed transport and logistics giant, Cargo Carriers, is set to flourish further and produce more rags to riches stories. That prospect comes as clients of the group seek to replicate the Cargo Carriers owner-drive model in their own operations for the benefit of their BBBEE scorecards.
Cargo Careers has run its owner-driver empowerment scheme about for 20 years. The scheme is known to have produced a number of real rags to riches stories where former blue collar workers, mainly drivers, have been transformed to well off business people. 17 owner-drivers earned R26.1m from Cargo Carriers in the financial year ended February 2015.
Cargo Carriers reports that some of its clients have approach the group to help them develop their own owner-driver schemes. This comes partly as an adjustment to the new tougher broad-based black economic empowerment (BBBEE) Codes of Good Practice.
In its latest annual report, Cargo Carriers noted that “The revised BBBEE Codes, that came into force on 1 May 2015, will present particular challenges for customers in terms of achieving points under the new Enterprise and Supplier Development element (for which 40 points plus four bonus points are available).
“As a result, several clients have asked to use our existing, highly successful Enterprise Supplier Development (ESD) owner/driver model for their own account.” As such a new outward looking ESD model was developed.
The company added that “The new ESD owner/driver model, which was developed in consultation with clients in the 2014 financial year, will entail Cargo Carriers managing owner/driver schemes on behalf of clients by providing enterprise development support”
The initiative will earn management fees and trailer hiring income for Cargo Carriers while customers receive BBBEE points for preferential procurement and supplier development. “This arrangement will effectively market the owner/driver scheme to customers due to the benefits that will accrue in line with the revised codes,” said the company.
This initiative may open up more empowerment opportunities for the ordinary worker and mainly drivers. In doing so, the development will contribute towards democratisation of the BBBEE landscape. Initiatives like owner-driver schemes come to dilute the view that South Africa’s economic transformation project has only benefited a few politically connected individuals, the so-called usual suspects. The owner-driver empowerment model has flourished in a number of other mainstream corporations that have a heavy cargo moving exposure like SABMiller and Afrisam. At the South African Breweries the owner drive empowerment model has benefited more than 400 owner drivers since launch in the 1980’s.
Cargo Carriers reported that during the financial year ended February 2015, some 17 owner/drivers who are all former employees were working on contracts for the group and its subsidiaries in South Africa and Swaziland. “In just the past year these owner/drivers’ enterprises earned some R26.1 million in revenue.”
This owner-driver empowerment scheme has immensely benefited Cargo Careers BBBEE record.