Optimizing a Multi-Load Container Transport Corridor in South Africa Mark Wootton Executive Manager: ICT Transnet Port Terminals 6 March 2009

CONTENTS Transnet - Overview of Operating Divisions and Investment Plans Freight system challenges The problem statement How is Transnet responding to the challenges Hub port concept Inter-divisional supply chain corridors The role of technology Navis SPARCS N4 at the core Optimization, integration and collaboration

Transnet

- Overview of Operating Divisions and Investment Plans

Freight system challenges

The problem statement

How is Transnet responding to the challenges

Hub port concept

Inter-divisional supply chain corridors

The role of technology

Navis SPARCS N4 at the core

Optimization, integration and collaboration

STRUCTURE Discontinued businesses Freight Rail RAIL Rail Engineering TRANSNET LIMITED PORTS National Ports Authority Port Terminals Pipelines PIPELINE Operational divisions (continued businesses) SA Express Transtel Telecoms Viamax Autopax freightdynamics Housing Lending Book Shosholoza Meyl Arivia.kom Discontinued Businesses Supporting businesses: Transnet Property and Transnet Projects

SA Express

Transtel Telecoms

Viamax

Autopax

freightdynamics

Housing Lending Book

Shosholoza Meyl

Arivia.kom

Capex spending five-year plan: R78 billion* * * * * * 13% PIPELINE Transnet Pipelines R10 bn Multi-product pipeline – R9,3 bn Gas line upgrading – R0,2 bn PORTS Transnet Port Terminals R9,5 bn Durban – R0,9 bn Richards Bay – R0,7 bn Ngqura – R1,5 bn Cape Town – R0,4 bn Saldanha – R2,9 bn PORTS Transnet National Ports Authority R18,5 bn Richards Bay – R0,8 bn Ngqura – R4,7 bn Cape Town – R3,8 bn Durban – R7,6 bn Floating craft – R0,7 bn RAIL Transnet Rail Engineering R4,1 bn Equipment - R2 bn Upgrade of facilities – R1,1 bn RAIL Transnet Freight RailR34,8 bn Coal Line – R4,9 bn Ore Line – R3,8 bn General Freight – R15,3 bn Maintenance Capitalisation – R10,8 bn * Continuing businesses

PIPELINE

Transnet Pipelines R10 bn

Multi-product pipeline – R9,3 bn

Gas line upgrading – R0,2 bn

PORTS

Transnet Port Terminals R9,5 bn

Durban – R0,9 bn

Richards Bay – R0,7 bn

Ngqura – R1,5 bn

Cape Town – R0,4 bn

Saldanha – R2,9 bn

PORTS

Transnet

National Ports Authority R18,5 bn

Richards Bay – R0,8 bn

Ngqura – R4,7 bn

Cape Town – R3,8 bn

Durban – R7,6 bn

Floating craft – R0,7 bn

RAIL

Transnet Rail Engineering R4,1 bn

Equipment - R2 bn

Upgrade of facilities – R1,1 bn

RAIL

Transnet Freight RailR34,8 bn

Coal Line – R4,9 bn

Ore Line – R3,8 bn

General Freight – R15,3 bn

Maintenance Capitalisation – R10,8 bn

The National Freight Logistics Strategy: The South African challenges System Challenge Impact Ageing infrastructure Restricted capacity, Unreliable services, High investment requirements Low efficiency High cost, Unreliable services, Low service levels Low collaboration Duplication, Under-utilisation, High costs Lack of integrated planning Spatial and timing mismatches, Wasted effort and resources Inappropriate regulatory framework and institutional structure No ability to change system, Monopoly pricing for “competitive” services, No or low competition

What do our Customers want and what do our Customers customers expect ? Their wants … Shipping Lines Fewer port calls for deepsea vessels Faster vessel turnaround times Optimised vessel utilisation Integrated port and rail solutions Cargo owners Increased flexibility & reliability in getting their cargo to the terminals Visible supply chain with access to information on cargo tracking Access to a wider choice of lines for the benefit of lower costs Ngqura Large deepsea call Feeders SA’s Load Centre Feeders Feeders Inland distribution Exporters want faster & more transport channels to international & regional markets. Shipping lines want integrated port rail solutions and good connectivity to hinterlands With cargo consolidation, shipping lines are able to deploy larger vessels and the costs per unit decreases There is a need for automated custom processes between countries

Their wants …

Shipping Lines

Fewer port calls for deepsea vessels

Faster vessel turnaround times

Optimised vessel utilisation

Integrated port and rail solutions

Cargo owners

Increased flexibility & reliability in getting their cargo to the terminals

Visible supply chain with access to information on cargo tracking

Access to a wider choice of lines for the benefit of lower costs

Exporters want faster & more transport channels to international & regional markets.

Shipping lines want integrated port rail solutions and good connectivity to hinterlands

With cargo consolidation, shipping lines are able to deploy larger vessels and the costs

per unit decreases

There is a need for automated custom processes between countries

The new operating model: High performance container terminals (min 25 for feeders and 28 mainline carriers) A common intergrated IT system between the ports and the landside to provide visibilty in the supply chain A centralised berth planning system for the load centre that supports the complimentary container ports Value proposition will require a port rail commercial solution

High performance container terminals

(min 25 for feeders and 28 mainline carriers)

A common intergrated IT system

between the ports and the landside to provide visibilty in the supply chain

A centralised berth planning system for

the load centre that supports the

complimentary container ports

Value proposition will require a port rail

commercial solution

Integrated and coordinated action between the port and rail systems is necessary to meet the challenges by: Implementing a high performance rail corridor backbone for the country (recapture market share from road) Operating the ports in a complementary manner to make the port system more efficient, increase maritime connectivity and reduce ocean freight rates Integrating physical, financial and information flows along the port-rail supply chain to reduce administrative requirements and improve visibility Formulating and implementing integrated service strategies for key customers

Implementing a high performance rail corridor backbone for the country (recapture market share from road)

Operating the ports in a complementary manner to make the port system more efficient, increase maritime connectivity and reduce ocean freight rates

Integrating physical, financial and information flows along the port-rail supply chain to reduce administrative requirements and improve visibility

Formulating and implementing integrated service strategies for key customers

SPARCS N4 – Advanced Data Model Benefits Visibility across operations Centralize functions Lower Deployment Costs Deployment choices Facility Yard Quay Rail Gate N4 System Operator Complex

Benefits

Visibility across operations

Centralize functions

Lower Deployment Costs

Deployment choices

SPARCS N4 – Data Model Complex

Sparcs N4: ITT Durban Port Complex KGX Pier 1 DCT

Navis System Topology for Transnet Gauteng Gauteng Rail Only City Deep Kazerne Pretcon Cape Town Container Terminal Multi-Purpose Terminal Belcon (rail) Eastern Cape Marine Only Port Elizabeth East London Ngqura Durban DCT (marine) Pier 1 (marine) Bayhead (rail) Kingsrest (rail)

Gauteng

Rail Only

City Deep

Kazerne

Pretcon

Cape Town

Container Terminal

Multi-Purpose Terminal

Belcon (rail)

Eastern Cape

Marine Only

Port Elizabeth

East London

Ngqura

Durban

DCT (marine)

Pier 1 (marine)

Bayhead (rail)

Kingsrest (rail)

Sparcs N4: ITT - Setup Topology Users defined for specific facility or whole complex

Topology

Users defined for specific facility or whole complex

Infrastructure Overview

Server Requirements Total Servers Required for all sites: 2x DB Servers (Production & Backup) 50 x App Servers (Production & Backup) 20x Sparcs Servers (Production & Backup) 14x Radio Servers (Production & Backup) 6x EDI Servers (Production & Backup) 4x Web Servers 4x Load balancers TOTAL = 100

Total Servers Required for all sites:

2x DB Servers (Production & Backup)

50 x App Servers (Production & Backup)

20x Sparcs Servers (Production & Backup)

14x Radio Servers (Production & Backup)

6x EDI Servers (Production & Backup)

4x Web Servers

4x Load balancers

TOTAL = 100

Sparcs N4: What do we get Visibility

Visibility

Sparcs N4: What do we get Integrated Planning and Operations

Integrated Planning and Operations

Integrated planning and operations Create Facilities and Yards Add ‘Yard Relay’ option between the two sites for transfers – Designate Transfer mode: Truck, Train, or Vessel Sparcs N4: What do we get

Integrated planning and operations

Create Facilities and Yards

Add ‘Yard Relay’ option between the two sites for transfers –

Designate Transfer mode: Truck, Train, or Vessel

Rail / Port Integration: Edit Train Visit Details Add Information to ‘Next Term/Facility’ field This routes the train to the other Terminal Sparcs N4: What do we get

Rail / Port Integration:

Edit Train Visit Details

Add Information to ‘Next Term/Facility’ field

This routes the train to the other Terminal

Port-Rail Integration: After containers have been loaded onto the Train Advance the train visit to ‘Departed’ At Next Terminal – the Train visit will show as ‘Inbound’ Once Train visit at Transfer terminal has ‘Arrived’ Containers can be discharged as normal Sparcs N4: What do we get

Port-Rail Integration:

After containers have been loaded onto the Train

Advance the train visit to ‘Departed’

At Next Terminal – the Train visit will show as ‘Inbound’

Once Train visit at Transfer terminal has ‘Arrived’

Containers can be discharged as normal

Inter-Terminal Transfers Selected designated containers Re-Route with Train information Load the Container to the Train Sparcs N4: What do we get

Inter-Terminal Transfers

Selected designated containers

Re-Route with Train information

Load the Container to the Train

Sparcs N4: What do we get Integrated Planning and Operations Vessel -> across ports Rail -> Port Inter-terminal movements Single source paperless data entry and billing Single multi-modal contract One customer = one invoice Paperless online or EDI data entry

Integrated Planning and Operations

Vessel -> across ports

Rail -> Port

Inter-terminal movements

Single source paperless data entry and billing

Single multi-modal contract

One customer = one invoice

Paperless online or EDI data entry

Sparcs N4: Where to from here Current Deployment Pier 1 (May 2007) Port Elizabeth (Feb 2009) Roadmap East London (March 2009) Ngqura (July2009) Cape Town (Aug 2009) DCT (Jan 2010) Rail (July 2009 – Feb 2010)

Current Deployment

Pier 1 (May 2007)

Port Elizabeth (Feb 2009)

Roadmap

East London (March 2009)

Ngqura (July2009)

Cape Town (Aug 2009)

DCT (Jan 2010)

Rail (July 2009 – Feb 2010)