Courier company with 1,400 employees and 90 branches countrywide set to shut down
As the lockdown eases and more South Africans go back to work under level 3 on Monday, many jobs hang in the balance, including those in the construction and courier businesses. For courier company Times Freight, which has about 90 branches and 1,400 employees, this might be the end of the road.
Group CEO Iain Johnson said regrettably, the board had decided that it had no choice but to commence a formal consultation process which could lead to the potential closure of Time Freight.
“Time Freight was in a fragile position prior to the advent of Covid-19 and the government decreed the lockdown. The market in which it operates had become increasingly difficult and competitive over the last few years and this, when set against an already challenging and weak economic environment in SA, meant that the business required radical change in order to survive,” said Johnson.
“Final closure has not been determined. The executives are currently in a 60-day consultation period with representatives of the unions and other employee groups.”Johnson said all employees of the company were affected by the consultation process.
“If at all possible, some employees may be able to find roles outside Time Freight within some of its associate businesses.”Sadly, the advent of the coronavirus pandemic and the very debilitating effects of having to close the business during the government-decreed lockdown period has materially damaged its future prospects, Johnson said.
“The negative impact that Covid-19 and the lockdown, in whatever form going forward, will have on the future SA economy is also a critical factor in the board and shareholders’ view that continuing to fund its turnaround is no longer a viable option.”
The lockdown has threatened job security and sustainability in many sectors.“The nationwide lockdown has brought many businesses in the tourism and hospitality sector to a complete halt, translating into huge losses in terms of revenue, as the pandemic has occurred during traditional busy periods for the region such as Easter season, Africa’s Travel Indaba and other major events, conferences and holiday periods,” said Durban Chamber of Commerce president Nigel Ward.
“This has significantly threatened job security on a large scale and further risks business health, resulting in possible business closures in the tourism and hospitality sector and across its value and supply chain.”The construction industry also affected
The nationwide lockdown has also resulted in a significant economic cost to the construction sector.
“Many construction sites have had to close with many projects being put on hold. Some of these projects are key infrastructure and developmental projects that were initiated to stimulate and supplement our regional socio-economic growth and development. The delay will have long-term implications for our local, provincial and national economy,” said Ward.
He said SMMEs, spaza shops and informal businesses have been worst affected given that many are reliant on monthly income to sustain operations, with no access to additional capital to ride out the current outbreak.“Given the inherent complexity of regional and global supply and value chains, an extended lockdown will impact both our manufacturing, transport/logistics sectors and trade.”
He said the Durban chamber was concerned about the short and long-term socio-economic impact of the pandemic and the lockdown on SA’s economy as several critical sectors had been severely impacted.“Insights from the May 2020 Monetary Policy Statement reveals that the SA Reserve Bank currently expects GDP in 2020 to contract by 7%, compared to the 6.1% contraction forecast in April.
“The public and private sector need to engage and prepare joint working plans and road maps for these critical industries so that there is a structured plan towards recovery with milestones and targets. This will aid in creating a positive investment environment,” said Ward.
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