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Sensible Planning between Road, Rail & Ports


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Presented by: Gavin Kelly at the 2009 Railways and Harbours Conference in Cape Town.

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Sensible Planning between Road, Rail & Ports

  1. 1. Gavin A Kelly Technical & Operations Manager 05 March 2009 Sensible planning between road, rail and ports
  2. 2. <ul><li>Freight (goods and passengers) playto the following rules: </li></ul><ul><li>National Freight Logistics Strategy (NFLS): Circa 2005 </li></ul><ul><li>National Transport Master Plan 2005 – 2050 (NATMAP): Circa 2008 </li></ul>The Rules
  3. 3. <ul><li>“ 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.” </li></ul><ul><li>Problem Statement: NFLS, pg04: 2005 </li></ul>Where we are
  4. 4. <ul><ul><li>“ 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” </li></ul></ul>The Effect
  5. 5. <ul><ul><li>&quot;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“ </li></ul></ul><ul><ul><li>JT Radebe, Minister of Transport, Sept 2005 </li></ul></ul>The Mission
  6. 6. <ul><ul><li>Currently we move 900 mil tonnes per year across the various networks </li></ul></ul><ul><ul><li>Freight that moves into the hinterland faces difficult challenges due to the inefficiencies of the port and rail environments </li></ul></ul><ul><ul><li>NFLS: 2005, pg 03 </li></ul></ul>The Reality
  7. 7. <ul><ul><li>Transportation systems are characterized and riddled with both intra and inter-modal inherited and / or acquired problems. </li></ul></ul><ul><ul><li>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. </li></ul></ul><ul><ul><li>NATMAP: April 2006, pg 08 </li></ul></ul>The Hurdles
  8. 8. <ul><ul><li>Our transport systems are neither demand responsive nor cost effective. </li></ul></ul><ul><ul><li>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. </li></ul></ul><ul><ul><li>NATMAP: April 2006, pg 08 </li></ul></ul>The Hurdles
  9. 9. <ul><ul><li>Currently transport costs is on a scale from 14% through to roughly 38%. </li></ul></ul><ul><ul><li>The general transport cost in other economies is no higher than 10% (but most economies work in single figure boundaries) </li></ul></ul>The Hurdles
  10. 10. <ul><ul><li>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. </li></ul></ul><ul><ul><li>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. </li></ul></ul><ul><ul><li>NATMAP: April 2006, pg 09 </li></ul></ul>Rail
  11. 11. <ul><ul><li>Almost every respondent believes that the state-run rail network is either below average or poor in its performance. </li></ul></ul><ul><ul><li>Business Day: June 21, 2005 </li></ul></ul>Rail
  12. 12. <ul><li>Continuous growth in road freight (roughly 7% per annum since 2005); </li></ul><ul><li>Road vs Rail – an empty debate (as rail cannot play the role it needs to); </li></ul><ul><li>Rising costs of transport (road user charges, toll roads, fuel levies & additional taxes); </li></ul><ul><li>Strain on efficiencies and delivery times (more and more difficult due to congestion); </li></ul><ul><li>Transportation in smaller quantities – very large growth in vehicle market (between 14% and 24%) </li></ul>Road
  13. 13. <ul><li>South African coastline: 3 500km </li></ul><ul><li>Seven major ports </li></ul><ul><li>Opportunity for coastal shipping, which is an economical, environmentally, and energy efficient mode of transportation. </li></ul><ul><li>Yet coastal shipping in South Africa has not developed </li></ul>Ports
  14. 14. <ul><li>Exports: 122 mil tonnes </li></ul><ul><li>Imports: 39 mil tonnes </li></ul><ul><li>Challenges: </li></ul><ul><li>poor port design; </li></ul><ul><li>inappropriate land usage; </li></ul><ul><li>lack of investment for 20 years; </li></ul><ul><li>lack of intermodal facilities to facilitate seamless movement of cargo across modes at port land interfaces </li></ul>Ports
  15. 15. <ul><li>Productivity very low (17 container lifts per hour compared international norm of 35 lifts per hour) </li></ul><ul><li>Service severely hampered by congestion </li></ul><ul><li>Old equipment and lack of home-grown fleet of ships to ply local trade </li></ul><ul><li>High costs related to port logistics </li></ul>Ports
  16. 16. <ul><li>Lack of implementation of NFLS; </li></ul><ul><li>Focus shift every three years through “new strategies / strategic plans”; </li></ul><ul><li>Transnet development halted through lack of funding; </li></ul><ul><li>Incorrect prioritisation (2010 World Cup has lost its value in the greater picture of future transportation provision) </li></ul>DoT leadership since 2005
  17. 17. <ul><ul><li>slow development of transport corridors; </li></ul></ul><ul><ul><li>no real promotion of inter-modalism; </li></ul></ul><ul><ul><li>“ immunity” given to foreign operators; </li></ul></ul><ul><ul><li>poor sustainability of SMME’s; </li></ul></ul><ul><ul><li>infrastructure bottlenecks; </li></ul></ul><ul><ul><li>poor trade facilitation & coordination; </li></ul></ul><ul><ul><li>no transport alternatives developed </li></ul></ul>DoT leadership since 2005
  18. 18. DoT leadership since 2005
  19. 19. <ul><li>Government needs to: </li></ul><ul><li>Implement “The Plan” (whatever it is); </li></ul><ul><li>Define priorities in consultation with private sector; </li></ul><ul><li>Supply the infrastructure – allow private sector to provide the service; </li></ul><ul><li>Adjust all development plans according to the “Master Plan”; </li></ul><ul><li>Ensure all government departments follow the same plan for a South Africa (PTY) Ltd </li></ul>Solutions
  20. 20. 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
  21. 21. <ul><li>Renewed growth in economy will result in freight growth (roughly 7% per annum) </li></ul><ul><li>How are we going to ensure that freight moves through SA and not Mocambique, Angola, Namibia </li></ul><ul><li>Sustainable employment within the transport sector – allow private sector to provide the services and to create employment </li></ul><ul><li>Less regulation and more determination to facilitate transportation of all goods </li></ul>Beyond 2009
  22. 22. <ul><ul><li>freight transport = economic development; </li></ul></ul><ul><ul><li>transport costs (related to rest of world); </li></ul></ul><ul><ul><li>efficient transport systems; </li></ul></ul><ul><ul><li>new infrastructure development; </li></ul></ul><ul><ul><li>t he economy will grow at an annual average </li></ul></ul><ul><ul><li>rate of 5.7% across the 2007-2011 period </li></ul></ul><ul><ul><li>Foreign trade will rise by 16.4% a year in value terms </li></ul></ul>Beyond 2009
  23. 23. <ul><li>Owner Drivers – 77 </li></ul><ul><li>Micro – 259 (1 – 10 trucks) </li></ul><ul><li>Small – 113 (11 – 50 trucks) </li></ul><ul><li>Medium – 41 (51 – 150 trucks) </li></ul><ul><li>Large – 23 (>151 trucks) </li></ul><ul><li>Private Operator – 28 </li></ul><ul><li>Total Operators : 541 </li></ul><ul><li>Affiliates – 95 </li></ul><ul><li>Associates – 47 </li></ul><ul><li>Total Members : 683 </li></ul>Membership
  24. 24. <ul><li>Thank You </li></ul>