A presentation by Mike Daniel, managing director, KPMC, South Africa. Delivered during African Ports Evolution 2015 in Durban, South Africa. More like this on www.transportworldafrica.co.za

2. Click to edit Master title styleKPMC
engineers a sustainable
future through innovation
Synchronising Road and Rail to move Africa
into the 21st century.
Mike Daniel
KPMC Managing Director

3. Resolving Conflict
• For years road hauliers and railroads have
competed for the same business.
• Inefficiencies, high costs and high demand
dictate a re-evaluation of the synergies
• Moving freight from road to rail and rail to
road has never been easier and more cost
effective
• Increase profits by focusing on strengths of
road and rail.

4. Why Road Transport?
ROAD HAULIER STRENGTHS
• Understanding the client’s requirements
• Just-in-time deliveries
• Flexibility of routes
• Low capital cost

5. But ……………
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USA UK Aust Canada Germany Sweden France NZ SA
Heavy Duty Fatalities per 100 million Kilometers

6. Ailing Infrastructure

7. Moving Africa: Unsustainable Road Freight Transport
Inefficiencies and lack of investment in Rail meant that
Road Freight Transport stepped up to the plate to
keep SADC economies rolling. Whilst this was a
solution, the increase of road freight is
unsustainable. Without a change in mindset, the
following is applicable.
• SADC freight system is characterised by a high systems cost
and low levels of long-term sustainability
• Resource constraints result in a gradually deteriorating and
eventually financially unsustainable system.
• Road freight, in particular, creates several unsustainable
externality costs such as pollution, high non-user costs for
road infrastructure, insurance to benefits accident victims
and overloading, creating additional maintenance costs for
the roads.

8. Why Rail?
RAILROAD STRENGTHS
• Fuel efficiencies: Rail can move 1mt of freight for
176km on 1lt of fuel (diesel) – road equivalent = 46- 56km
• Carbon footprint reduction – 3.8 X less carbon
produced
• Reduction of highway carnage – SA is
unfortunately a world leader in deaths by highway freight
vehicles.
• Reduce cost of road infrastructure - no need to
ban trucks from roads if certain freight or route sections are
moved to rail

9. Carbon footprint reduction

10. Reduce cost of NEPAD Logistics
Local Logistics cost expressed as a percentage of GDP in S Africa is almost
double that of the United States and more than 50% more than Japan and
Brazil.

11. Indian Railways
• “From bankruptcy to Billions” - by Sudhir Kumar and
Shagun Mehrotra
• Virtually bankrupt – couldn’t make debt
payments to government
• Turnaround focused on:
• Asset upgrades and asset utilization
• Market-based competitive pricing
• Improved length, density and frequency of trains
(longer, heavier, faster)
• In 10 years, achieved USD $6 Billion Surplus

12. Co-operation between Road and Rail to get Africa running!
• Focus on specific links in the supply chain
• Prepare Africa for economic upswing and to meet
global requirements
• Job sustainability
• Increase profitability without increasing tariffs.
• Complementary services to accommodate limited
infrastructure

13. Moving Africa: Issues
Strategic Issues Identified:
• Export Competitiveness: Lack of alignment for
exports
• Barriers to cross-border SADC traffic
• System Sustainability: High systems cost of
domestic freight
• Sustainability of freight industry – barely coping
under current economic conditions.

14. Moving Africa: Recommendations
Build density in the
transport system
through focusing
freight flows in select
corridors
Support and reinforce
current trends toward
density
Provide best service
to the majority of
customers Invest to
build the 'backbone'
of the freight
transport system
Reduce complexity
and widespread
investment
requirements
Effectively use the
different modes
within the transport
system improving
firm-level
competitiveness
Focus the role of
modes in the different
parts of the system
Maximise scale
economies within
each mode
Offer differentiated
services where
economically
sustainable
Improve firm-level
competitiveness
Remove barriers and
bottlenecks currently
in the system
Ensure sufficient
reinvestment to
maintain quality
infrastructure and
operations
Restore price and
value signals
between customers
and providers
Build an industry
structure which drives
the system to
differentiate and
innovate
Density
Scale
Frequency

15. Accelerating Transnet
• NDOT and Transnet already have the
strategy that focuses on density, scale and
frequency.
• A key question: How can this be achieved
considering real limitations on capital,
infrastructure and rolling stock?
• One answer: Apply bimodal technology to
move bulk, Truck Load traffic off the road.

16. Market Applications
Network
Operating
Companies
Domestic
Freight
(CapeCor,
NatCor)
International
Containers
Coal for
Eskom, Jr
Miners
General
Mining
Agriculture
& Food &
Reefer
SADC
Markets
RailRunner is Transnet’s first opportunity to put trailers on trains

17. Bi Modal Benefits
• Lower terminal cost. “Terminal Anywhere”
®™system removes major barriers for
extending or expanding intermodal network.
Simpler terminal easier to operate. No heavy
lifting equipment.
• Intermodal trains can be assembled and
disassembled “under the wire”. No
requirement for additional traction and
expensive switching, in order to lift off
containers.
• Getting more trucks off more roads. Faster.
Easier. And at less expense.

18. Bimodal Benefits
• Empowering enterprise to take ownership of their
specific link in each supply chain
• Improved border transportation for entire trains
• Flexibility to cope with interruption in
infrastructure
• Cost reduction through fuel efficiency
• Prevention of road fatalities
• Expansion of the network to include remote
farming and mining communities
• The ability to meet increases in demand relatively
quickly

19. Scale, Density and Frequency
• Scale: Lowering the terminal investment barrier
facilitates scaling train operations whether in
existing or new lanes
• Density: Bi-Modal advantages in both high weight and
high cube freight offers competitive density
operations.
• Speed: Eliminating separate locos for terminal
operations to avoid overhead wire enables faster
terminal response and higher overall asset turns.
Bi-Modal design offers capability of higher train
speeds for faster rail operations.

20. Bi Modal Technical Options
Single
Stack
Double
Stack
Iron
Highway
RailRunner
Bimodal

21. Bimodal Design: RailRunner
• RailRunner is a specialized chassis or trailer + bogie combination –
no cranes required
• Complements container system – port and double-stack feeder
RailRunner Benefits
Smooth ride
-Air cushion and steerable
trucks
Cost advantages
-Small gaps = good
aerodynamics and more
containers per train
-Low tare weight = less
power/fuel
-Radial steering = less
track/wheel wear
-Complements double-stack
network
No catenary interference in
terminal
- Neither locomotive
switch nor electric wire-
free area required
High security
- Doors can’t be opened
“Terminal Anywhere”
- No lift equipment, small
footprint
- “$1M - $2M vs. $25M -
$50MM

22. Potential rail infrastructure projects
Walvis - DRC
Copper belt -
Durbs
Logistics
Parks
Durbs – Jhb
containers
Waterberg
to Maputo
Inland
Ports
Terminals
Significant
Connectors
Multi-State
Corridors
CT – Jhb
containers
Equipment
Trucks for first and
last mile
Rail Equipment
Pools
Examples of Multi-Party Infrastructure Investment

23. Opportunities for All
A change of mind-set by role-players is required and
it is preferable to become part of the overall
solution in order to control the future of your
business.
There are opportunities for all as well as new
opportunities for SME owners and BEE operators.

24. Two Societal Objectives
• Improve Transnet Freight Rail, á la “Indian
Rail”.
• Bi-Modal can provide scale, density and
speed
• Reduce the carnage to citizens and the
destruction of highway infrastructure
• The SA Government is considering placing
bans on trucks to preserve our infrastructure

25. CONCLUSION
The time has come ……….
 For co-operation between rail and road
 For co-operation between SOC’s and private
enterprise
 To focus on efficiencies
 To become more competitive
 To be ready to meet the global demands

26. Thank you, questions?