Gavin A Kelly Technical & Operations Manager 05 March 2009 Sensible planning between road, rail and ports

Freight (goods and passengers) playto the following rules: National Freight Logistics Strategy (NFLS): Circa 2005 National Transport Master Plan 2005 – 2050 (NATMAP): Circa 2008 The Rules

Freight (goods and passengers) playto the following rules:

National Freight Logistics Strategy (NFLS): Circa 2005

National Transport Master Plan 2005 – 2050 (NATMAP): Circa 2008

“ The freight system in SA is fraught with inefficiencies at system and firm levels. There are infrastructure shortfalls and mismatches; the institutional structure of the freight sector is inappropriate…..; the skills base is deficient and the regulatory frameworks are incapable of resolving problems in the industry.” Problem Statement: NFLS, pg04: 2005 Where we are

“ The freight system in SA is fraught with inefficiencies at system and firm levels. There are infrastructure shortfalls and mismatches; the institutional structure of the freight sector is inappropriate…..; the skills base is deficient and the regulatory frameworks are incapable of resolving problems in the industry.”

Problem Statement: NFLS, pg04: 2005

“ Key freight areas impacting negatively on the economic and social development of SA; which if left unaddressed would impose major restraints on the countries ability to deliver economic development and jobs in the medium to long term at a rate that is consistent with our requirements” The Effect

“ Key freight areas impacting negatively on the economic and social development of SA; which if left unaddressed would impose major restraints on the countries ability to deliver economic development and jobs in the medium to long term at a rate that is consistent with our requirements”

"A significant component of the National Freight Logistics Strategy deals with creating more space for the private sector to play a meaningful role in all aspects of the freight system“ JT Radebe, Minister of Transport, Sept 2005 The Mission

"A significant component of the National Freight Logistics Strategy deals with creating more space for the private sector to play a meaningful role in all aspects of the freight system“

JT Radebe, Minister of Transport, Sept 2005

Currently we move 900 mil tonnes per year across the various networks Freight that moves into the hinterland faces difficult challenges due to the inefficiencies of the port and rail environments NFLS: 2005, pg 03 The Reality

Currently we move 900 mil tonnes per year across the various networks

Freight that moves into the hinterland faces difficult challenges due to the inefficiencies of the port and rail environments

NFLS: 2005, pg 03

Transportation systems are characterized and riddled with both intra and inter-modal inherited and / or acquired problems. To this effect various transport components / elements of current transport systems are operated and regulated by different governmental agencies and private operators at all three spheres of government. NATMAP: April 2006, pg 08 The Hurdles

Transportation systems are characterized and riddled with both intra and inter-modal inherited and / or acquired problems.

To this effect various transport components / elements of current transport systems are operated and regulated by different governmental agencies and private operators at all three spheres of government.

NATMAP: April 2006, pg 08

Our transport systems are neither demand responsive nor cost effective. In many cases, there is little coordination amongst those responsible for the operation of the various components / elements of both rural and urban transportation systems. NATMAP: April 2006, pg 08 The Hurdles

Our transport systems are neither demand responsive nor cost effective.

In many cases, there is little coordination amongst those responsible for the operation of the various components / elements of both rural and urban transportation systems.

NATMAP: April 2006, pg 08

Currently transport costs is on a scale from 14% through to roughly 38%. The general transport cost in other economies is no higher than 10% (but most economies work in single figure boundaries) The Hurdles

Currently transport costs is on a scale from 14% through to roughly 38%.

The general transport cost in other economies is no higher than 10% (but most economies work in single figure boundaries)

The most critical impact has been felt in the rail network. Unofficially South African Railways rolling stock is approximately 35 years behind current state of the art technologies. We have seen a steep decline in the reliability of the ageing rolling stock fleet and the emergence of serious safety issues resulting from poor condition and technical obsolescence. NATMAP: April 2006, pg 09 Rail

The most critical impact has been felt in the rail network. Unofficially South African Railways rolling stock is approximately 35 years behind current state of the art technologies.

We have seen a steep decline in the reliability of the ageing rolling stock fleet and the emergence of serious safety issues resulting from poor condition and technical obsolescence.

NATMAP: April 2006, pg 09

Almost every respondent believes that the state-run rail network is either below average or poor in its performance. Business Day: June 21, 2005 Rail

Almost every respondent believes that the state-run rail network is either below average or poor in its performance.

Business Day: June 21, 2005

Continuous growth in road freight (roughly 7% per annum since 2005); Road vs Rail – an empty debate (as rail cannot play the role it needs to); Rising costs of transport (road user charges, toll roads, fuel levies & additional taxes); Strain on efficiencies and delivery times (more and more difficult due to congestion); Transportation in smaller quantities – very large growth in vehicle market (between 14% and 24%) Road

Continuous growth in road freight (roughly 7% per annum since 2005);

Road vs Rail – an empty debate (as rail cannot play the role it needs to);

Rising costs of transport (road user charges, toll roads, fuel levies & additional taxes);

Strain on efficiencies and delivery times (more and more difficult due to congestion);

Transportation in smaller quantities – very large growth in vehicle market (between 14% and 24%)

South African coastline: 3 500km Seven major ports Opportunity for coastal shipping, which is an economical, environmentally, and energy efficient mode of transportation. Yet coastal shipping in South Africa has not developed Ports

South African coastline: 3 500km

Seven major ports

Opportunity for coastal shipping, which is an economical, environmentally, and energy efficient mode of transportation.

Yet coastal shipping in South Africa has not developed

Exports: 122 mil tonnes Imports: 39 mil tonnes Challenges: poor port design; inappropriate land usage; lack of investment for 20 years; lack of intermodal facilities to facilitate seamless movement of cargo across modes at port land interfaces Ports

Exports: 122 mil tonnes

Imports: 39 mil tonnes

Challenges:

poor port design;

inappropriate land usage;

lack of investment for 20 years;

lack of intermodal facilities to facilitate seamless movement of cargo across modes at port land interfaces

Productivity very low (17 container lifts per hour compared international norm of 35 lifts per hour) Service severely hampered by congestion Old equipment and lack of home-grown fleet of ships to ply local trade High costs related to port logistics Ports

Productivity very low (17 container lifts per hour compared international norm of 35 lifts per hour)

Service severely hampered by congestion

Old equipment and lack of home-grown fleet of ships to ply local trade

High costs related to port logistics

Lack of implementation of NFLS; Focus shift every three years through “new strategies / strategic plans”; Transnet development halted through lack of funding; Incorrect prioritisation (2010 World Cup has lost its value in the greater picture of future transportation provision) DoT leadership since 2005

Lack of implementation of NFLS;

Focus shift every three years through “new strategies / strategic plans”;

Transnet development halted through lack of funding;

Incorrect prioritisation (2010 World Cup has lost its value in the greater picture of future transportation provision)

slow development of transport corridors; no real promotion of inter-modalism; “ immunity” given to foreign operators; poor sustainability of SMME’s; infrastructure bottlenecks; poor trade facilitation & coordination; no transport alternatives developed DoT leadership since 2005

slow development of transport corridors;

no real promotion of inter-modalism;

“ immunity” given to foreign operators;

poor sustainability of SMME’s;

infrastructure bottlenecks;

poor trade facilitation & coordination;

no transport alternatives developed

DoT leadership since 2005

Government needs to: Implement “The Plan” (whatever it is); Define priorities in consultation with private sector; Supply the infrastructure – allow private sector to provide the service; Adjust all development plans according to the “Master Plan”; Ensure all government departments follow the same plan for a South Africa (PTY) Ltd Solutions

Government needs to:

Implement “The Plan” (whatever it is);

Define priorities in consultation with private sector;

Supply the infrastructure – allow private sector to provide the service;

Adjust all development plans according to the “Master Plan”;

Ensure all government departments follow the same plan for a South Africa (PTY) Ltd

BMI concludes that freight carried by road in South Africa is set to increase at an annual average rate of 7.7% over the next five years , ahead of the general rate of GDP growth The Future of Road Freight

Renewed growth in economy will result in freight growth (roughly 7% per annum) How are we going to ensure that freight moves through SA and not Mocambique, Angola, Namibia Sustainable employment within the transport sector – allow private sector to provide the services and to create employment Less regulation and more determination to facilitate transportation of all goods Beyond 2009

Renewed growth in economy will result in freight growth (roughly 7% per annum)

How are we going to ensure that freight moves through SA and not Mocambique, Angola, Namibia

Sustainable employment within the transport sector – allow private sector to provide the services and to create employment

Less regulation and more determination to facilitate transportation of all goods

freight transport = economic development; transport costs (related to rest of world); efficient transport systems; new infrastructure development; t he economy will grow at an annual average rate of 5.7% across the 2007-2011 period Foreign trade will rise by 16.4% a year in value terms Beyond 2009

freight transport = economic development;

transport costs (related to rest of world);

efficient transport systems;

new infrastructure development;

t he economy will grow at an annual average

rate of 5.7% across the 2007-2011 period

Foreign trade will rise by 16.4% a year in value terms

Owner Drivers – 77 Micro – 259 (1 – 10 trucks) Small – 113 (11 – 50 trucks) Medium – 41 (51 – 150 trucks) Large – 23 (>151 trucks) Private Operator – 28 Total Operators : 541 Affiliates – 95 Associates – 47 Total Members : 683 Membership

Owner Drivers – 77

Micro – 259 (1 – 10 trucks)

Small – 113 (11 – 50 trucks)

Medium – 41 (51 – 150 trucks)

Large – 23 (>151 trucks)

Private Operator – 28

Total Operators : 541

Affiliates – 95

Associates – 47

Total Members : 683

Thank You

Thank You