By Quinton de Villiers
The Bridgewater Logistics team joined South Africans in acknowledging the critical role that transport plays in the larger South African economy in October.
Transport Month was launched by the Department of Transport in 2005 to create awareness of the importance of the local logistics industry, especially in terms of helping government meet its socio and economic goals.
This year’s theme, namely “together we move South Africa forward”, again demonstrated the willingness of government to partner the private sector in building a world-class transport and logistics industry.
We also welcomed the focus on road transport and related infrastructure, considering the important role that this sub-sector continues to play in the larger South African logistics value chain.
In 2013, about 71% of the 734-million tons of freight moved in South Africa was via road-haulage companies, despite the fact that railways make up 80% of Africa’s infrastructure.
There were more than 550 000 commercial vehicles weighing more than 3 500 kg all transporting goods on South Africa’s 747 000 km of roads – the longest in Africa – in 2016.
Last year, our industry also contributed nine percent towards the country’s economy, while providing direct and indirect employment for about 300 000 South Africans.
Just as impressive is the rapid growth of the industry since most of the road infrastructure in South Africa was constructed.
The sector has grown by more than 500% since the 1960s.
This has also been on the back of continuous innovation by the many industry stakeholders that has driven efficiencies, as well as flexibilities, and ensured road remains the preferred mode of overland transport.
As an industry, we offer speed, convenience and security, while lack of rail capacity to handle general freight has and will continue to also act in our favour.
Our services may not be cheaper than rail, but many shippers have shown a willingness to pay a premium for the reliability and predictability offered by the road-haulage industry.
This is evident in the tonnages seized from the railway sector by long-haul operations over the years.
Since rail’s deterioration in the 1980s, private road haulers have been entrusted with transporting fuels, containers, industrial materials, consumer and household products, refrigerated cargo, fruit, grains, livestock, fertiliser, motor vehicles and chemicals along the main road arteries.
It is estimated that more than a million tons of bulk minerals is being moved along the N2 corridor to the north of Richards Bay, in addition to the 500 000 tons of timber that is being transported annually along this important road artery.
Meanwhile, 2-million tons of bulk tipper traffic is being carried to and from the ports on the N3 corridor.
At present, there are about 3 000 trucks travelling on this important road artery every day, and this traffic is expected to grow to 13 000 by 2045.
Moreover, experts anticipate that the number of road freight vehicles on our roads will rise from 400 000 to more than a million in 2050. Meanwhile, cross-border traffic will increase to over a million freight vehicle border crossings a year over the same period.
Certainly, this anticipated growth in the number of trucks on the road is driving government’s “road-to-rail migration” strategy. This is considering the large investment that will be required to accommodate such a sizeable increase in commercial vehicle traffic on South Africa’s already heavily-congested road network.
Compounding the situation is the fact that South Africa currently permits some of the largest vehicle combinations in the world for general freight haulage. This has also played a role in the rapid migration of large volumes of bulk commodities from rail to road. I am referring to overall combination lengths of 22 metres (m) and load heights of 4,3 m, allowing a load area of 124 cubic metres and 38 tonnes payload and 56 tonnes Gross Vehicle Mass.
According to a 2013 survey, rail handled 210-million tonnes of freight in 2013. Tonnages mainly comprised block train consignments of primary minerals. This is in addition to primary and secondary commodities, including timber, steel, grains, fuels and smaller proportions of industrial outputs, as well as imports and exports, such as motor vehicles, containers and chemicals.
Some experts claim that rail has a 20% market share of all shipments in South Africa. This includes long and short distance freight throughout the country, excluding rail-suitable freight movements. They also claim that rail already has 56% of rail-suitable freight, and this share will grow as investment into the national network increases.
This means that we cannot rest on our laurels.
Bear in mind Transnet’s Market Development Strategy, a seven-year R300-billion plan to rejuvenate the country’s ports, rail and pipeline infrastructure.
A sizeable portion of this investment is being directed to rail, which includes the procurement of locomotives and rolling stock, in addition to overhauling existing and building new infrastructure.
In 2015, Transnet announced that it had increased its capital investment spend by 5,7% each year, investing R33,6-billion for the 2014/2015 financial year.
Rail accounted for 74% of the total spend, with infrastructure and equipment investments for the year amounting to R14,5-billion. A total of R19,1-billion was dedicated to maintaining the existing capacity of the rail and port businesses.
Nevertheless, the state-owned carrier still shoulders a significant responsibility. It remains to be seen whether it will be able to strengthen South Africa’s 20 247 km rail network to grow rail volumes to about 350-million tonnes by 2020. This is a tall call!
Quinton de Villiers is the founder and managing director of Bridgewater Logistics with a long and impressive track-record in African logistics and security. Follow Quinton at #InTheFastLane for more insights and expert commentary on African transport and logistics.
