Getting more containers on rail is a key value and revenue priority for Transnet Freight Rail (TFR) in the 2009/10 financial year, executive manager of sales and marketing Bheka Xaba told delegates at the South African Association of Freight Forwarders (SAAFF) annual conference on Thursday.
He noted that the TFR had not been growing its customer business as it should have in the past, noting that in the past five years, demand from industry had grown by double digits, while the TFR has only grown its capacity by about 2%.
However, it was working towards putting together an intermodal strategy.
It was aiming to grow its market share in the maritime industry from 17% to 30% by 2012/13 and in the domestic or crossborder logistics sector from 5% to 20% in that same period.
Xaba noted that there were a number of advantages to using rail over road transport, including potential cost savings of about 35%.
Further, he noted that rail was also 90% more ecofriendly than road transport.
Department of Transport acting deputy director-general of transport logistics Clement Manyungwana stated that it was important for the road and rail sectors to complement each other.
He said that there had to be an optimum split between these two modes of transport and that commodities like coal and iron-ore should not be transported on road, as this was “killing the infrastructure”.
Manyungwana explained that there continued to be a difference in terms of the two modes’ market share.
Nevertheless, the country had to enhance its rail capacity to be able to carry these commodities, he noted.
To that end, draft documents on the air freight and rail branch lines strategies, which formed part of government’s overall transport strategy, have already been compiled.
The process of developing a road freight strategy had also been started, said Manyungwana.
Meanwhile, Transnet Port Terminals (TPT) CE Tau Morwe told the conference that while the container sector had grown by about 10% a year over the past five years, the current global economic conditions were impacting on this growth.
The TPT forecast container growth to be 3% a year between 2008 and 2014.
However, it would continue with its expansion plans and would spend about R2,8-billion on infrastructure and technology at its ports in the 2009/10 financial year.
He noted that it was better to invest in infrastructure and expand its capacity despite the global economic crisis, than to become complacent in light of the lower demand and not have sufficient capacity when things turned around.
It had to invest now and ensure that it added capacity ahead of increased demand, he commented.
Morwe said the biggest challenge for the entire Transnet group would be how well it was able to provide a seamless service to its customers.
Meanwhile, International Trade Administration Commission chief commissioner Siyabulela Tsengiwe said that the commission and the Department of Trade and Industry had, in light of the economic crisis, said that it would consider trade tariff adjustments for vulnerable sectors.
It was open to applications for tariff support from those industries that were struggling to survive, he said.
However, this would be awarded on a case-by-case basis and applicants would have to provide the requisite evidence to support its application.