A study by a group of students from the University of Johannesburg’s College of Business and Economics suggests that Transnet Freight Rail (TFR) – which has positioned itself as a low-cost freight transport solutions provider in South Africa – conduct an audit of the organisation’s skills, and its underutilised assets, such as its locomotives.
This would enable the organisation to more proactively manage change and regain market share in a country where road transport has become the preferred mode of transportation for freight, UJ lecturer Cashandra Mara said on Monday.
Speaking to delegates at the Southern African Transport Conference, she explained that, despite TFR’s intention to achieve a sustainable competitive edge and a bigger market share, which required market demand strategic planning, TFR had been losing market share to road freight.
This, in turn, influenced the organisation’s revenue and sustainability.
The study, overseen by Mara, sought to investigate the reasons why the rail sector had been struggling to regain freight transportation market share from the road transport sector.
South Africa’s ageing and deteriorating rail infrastructure and few intermodal solutions could be shifting the balance towards road, she said, adding that “emphasis should be on network capabilities and capacity, not competition” to address these issues.
The country’s less-than-favourable gross domestic product growth, as well as alternative forms of energy and improved fuel, and vehicle transportation options, were all likely to further reduce rail freight’s market share, Mara pointed out.
By partnering with, instead of competing against, its rivals in the road industry, TFR could become “more agile in responding to the changing market conditions”.