The freight industry still has a large number of businesses that are not BEE compliant and, as a result, are losing business. Simon Foulds speaks to Keith Levenstein, CEO of BEE advisory firm EconoBEE, to find out how freight transporters can obtain their BBBEE scorecard and become compliant.

Levenstein says: “Many companies only need minimal work to increase their BEE score while others already have an acceptable BEE score but are not aware of it.

“Why are small freight companies not compliant? I think it is ignorance more than anything else. A company can easily become compliant and in the process does not have to give their business away – which seems to be the perception if one reads some of the articles in the mainstream media. If their turnover is below R35 million they can easily obtain certification.

“To become compliant a company earns points and the more points a company earns, the higher its BEE rating.”

Seven elements

Levenstein says there are seven elements from which a company can earn points from. Depending on the ownership of the company it can  score 23 points.

“Management control at the company can earn up to 11 points. The most you would need to sell of your company to obtain these points is 25%. You can sell shares to your staff as an ownership scheme and you will also earn the points. At the same time if you have more black managers than white managers then you can earn points and if more than 50% of your managers are black women then this also weighs in your favour.

“Skills development is another key aspect and by upskilling staff, a company can earn up to 15 points on its score card.”

He says one way to gain points is in procurement. “If you purchase from the right company you can score 20 points. Key to procurement is purchasing goods from companies that have a good BEE certificate. You need to ask your suppliers for their BEE certificates and if he produces one you score the relevant points.

“Enterprise development is worth 15 points and this is achieved by approaching a small black-owned company and assist through mentorship. The last aspect is socio-economic development or corporate social investment. The latter makes good business sense.”

Becoming compliant

A company needs to score 30 pointsto become BEE compliant.

“A small freight company can easily earn five points from its socio-economic development, a further 15 points on the socio-economicfront and then another 15 points through procurement, then by looking at your employment equity you realise you have reached 45 points , which is 15 points above your compliance level and you suddenly find you are a Level 6 BEE compliant company.”

Levenstein concludes: “I support the whole transformation process and once companies realise they are BEE compliant they start trying to improve their scores, because as they realise having a BEE certificate can help your business and having a good BEE scorecard can make a difference in the business moving forward.”