Shell declares force majeure on Jhb fuel

House said:
Wait a while and see.

They have just protected themselves from legal action due to the fact that they cannot supply the fuel to retailers. Apparently they decided to protect their vehicles, as well as the drivers still willing to work and stopped deliveries in total for now.
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I'm sure they have some kind of insurance to protect against losses of this kind?
 
Mila said:
I'm sure they have some kind of insurance to protect against losses of this kind?
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Generally re-insurance may cover certain aspects normal insurance won't. With normal insurance things like an Act of God, Strikes, Violence are explicitly not covered.

In this case the re-insurance do not cover the losses, for any company, where strikes are related to salary wages and negotiations have not been completed. There are many more technical aspects, but in short they are not covered and therefor their actions.

According to my contact, this was the last option the company would have taken in order to protect themselves and they were forced to do this.
 
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House said:
Agreed with you.

What Shell will do now is absolutely NOTHING. No further fuel will be delivered to garages. They will all run dry in a matter of hours or days from now.

By declaring a force majeure they can no longer be held liable for any losses due to not providing fuel to outlets. They have no further obligation to do so until the strike is resolved.

Just heard from an insider that all trucks have been parked indefinitely and that production have been stopped for the time being.

I can't help but think that others will follow suite.

Bad news for consumers though.
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Interestingly Force Majeure is not a legal concept in SA law although it is recognised as a clause in contracts. And you can't just declare it - it really has to be about events beyond your control. There is a little test:

Could you control the event or circumstances?
Did you examine the political, social, economic, healthcare, climatic, geological circumstances prevailing at the time of contracting which may have impacted on your ability of performing your obligations?
What actions did you take in an attempt to avoid or overcome the event or circumstances?
Are you not in some way or at all responsible for the event occurring?

So this is really about a truck driver strike and maybe Shell has no part in those discussions. Unless Shell has its own fleet of trucks. Maybe Shell did settle - and their trucks are being targetted because any truck on the roads is a target.

But the thing that I'd think about is the second test - the whole socio-economic environment. And throw politics in too. TIA as they say. And Shell has a long history of fuelling revolution in SA - Throw well, throw Shell was a slogan from the pre-universal franchise days.
 
Albereth said:
Interestingly Force Majeure is not a legal concept in SA law although it is recognised as a clause in contracts. And you can't just declare it - it really has to be about events beyond your control. There is a little test:

Could you control the event or circumstances?
Did you examine the political, social, economic, healthcare, climatic, geological circumstances prevailing at the time of contracting which may have impacted on your ability of performing your obligations?
What actions did you take in an attempt to avoid or overcome the event or circumstances?
Are you not in some way or at all responsible for the event occurring?

So this is really about a truck driver strike and maybe Shell has no part in those discussions. Unless Shell has its own fleet of trucks. Maybe Shell did settle - and their trucks are being targetted because any truck on the roads is a target.

But the thing that I'd think about is the second test - the whole socio-economic environment. And throw politics in too. TIA as they say. And Shell has a long history of fuelling revolution in SA - Throw well, throw Shell was a slogan from the pre-universal franchise days.
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You are 100% right.

Retailers in contract with Shell will now have to test this in court and see if Shell indeed have a leg to stand on.

I believe they do.

It is evident from this, and previous strikes that they do not only target one person or company. They target any person or company who do not join the strike and lay down tools. They will not hesitate to resort to violence or even commit murder where people do not join their cause.

Evidence of this is readily available.

I think Shell is well within their rights when they say that the circumstances are well beyond their control and is the main cause they cannot fulfill their contractual obligations.

In any event, I do not think any retailers will gang up against Shell and take them to court.

I, however, see that if this continues that many retailers will have no choice but to lay off workers if they don't do business.
 
ghoti said:
Shell will lose money if they dont deliver petrol, so they`ll be dong their best to get the petrol through despite the strike.
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They will probably still try and push some through as they will lose out, but the truck alone (excluding tanker and fuel) can be valued at anywhere from R500,000 for an older truck to close on R2 million for the newer ones, making the truck more valuable than the fuel it transports.

I think one of those tankers carries about 45,000 litres of juice. At retail price that is around R550,000 worth of petrol. If the truck is valued at R1 million you can see the risk taken. The risk is even greater if the tank is compromised in an attack and you lose the fuel as well. Then you have to have concern for the dude driving your truck as well. There's a lot of risk running one of those trucks with these lunatics running about.
 
Shell are well within their rights, as is any industry that moves goods across our road network.

If this coup by the unions with unrealistic demands continue you will see many more companies following suite.

Whether or not you own trucks employ drivers or contract out, it makes little difference as the law enforcement agencies and government are not able, or not willing, to curb the violence or levels of intimidation.

We have had drivers hurt and trucks damaged. You cannot as a responsible supplier to any industry endanger your employees lives.
Its that simple.
 
Sneeky said:
We have had drivers hurt and trucks damaged. You cannot as a responsible supplier to any industry endanger your employees lives.
Its that simple.
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And I agree with that.

No sense in forcing your employees to continue delivering product, when their lives is in danger.
 
The thing is, our business is managing just fine and we move a lot across the road networks
There are plenty people and companies, some private ones with a small fleet that are chomping at the bit to get an opportunity to get some work.

The problem lies though in the lawlessness and violence and the government turning a blind eye to it all. Dare I say even tolerating it.

This is easily solved with manpower and force against the perpetrators, but that's a bridge to far for the ANC, given Mangaung in a few months time.

Next week its the ports just wait.

Maybe when Zoomer cant get bricks and gold plating to Nkandla he will wake up.
 
Sneeky said:
The thing is, our business is managing just fine and we move a lot across the road networks
There are plenty people and companies, some private ones with a small fleet that are chomping at the bit to get an opportunity to get some work.

The problem lies though in the lawlessness and violence and the government turning a blind eye to it all. Dare I say even tolerating it.

This is easily solved with manpower and force against the perpetrators, but that's a bridge to far for the ANC, given Mangaung in a few months time.

Next week its the ports just wait.

Maybe when Zoomer cant get bricks and gold plating to Nkandla he will wake up.
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Most sickening thing about all this is I believe this to be the very case of non-action. Political power is more valuable battle than the entire economy/well being of South Africa (the very thing they are promising to serve!)

Sure, same thing for some other democratic countries, sickening none the less.
 
this is just another reflection of the governments inability to manage the country effectively

as I've said in a previous post, so long as the ANC remain in their unholy alliance with COSATU they are hamstrung to really address these issues

between the mines and this strike and the rest of the crap that is now in the pipeline since workers saw the power of disassociation from the unions in Marikana, our economy is on a very slippery slope unless government develops some balls to actually start addressing the issues at the risk of pissing off a major portion of their constituency
 
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