South Africa's domestic intermodal imperative

The original publication is available at http://www.journals.elsevier.com/research-in-transportation-business-and-management/An integrated alternative to road only or rail only transport does not exist in South Africa for domestic freight. This is in spite of the fact that national freight logistics costs are high, road infrastructure is challenged and concern for the environmental impact of road transport is increasing. These factors have renewed interest in intermodal transport solutions, which are the focus of this article. The question is whether a viable domestic intermodal solution can be found through segmenting freight flows and developing a business case based on these segments. The research confirms that this is possible and the segmentation and subsequent business case is presented. The results demonstrate that building three intermodal terminals to connect the three major industrial hubs – Gauteng, Durban and Cape Town – through an intermodal solution could reduce transport costs (including externalities) for the identified 22.9 million tons of intermodal freight flows on the Cape and the Natal corridors by 64% (including externalities).Post-prin

A logistics barometer for South Africa : towards sustainable freight mobility

CITATION: Havenga, J. H., et al. 2016. A logistics barometer for South Africa: towards sustainable freight mobility. Transport and Supply Chain Management, 10(1), a228, doi:10.4102/jtscm.v10i1.228.The original publication is available at http://www.jtscm.co.zaENGLISH SUMMARY : Background: South Africa has a disproportionately high freight transport demand owing to industrial development far from ports, low domestic beneficiation and improper modal use. Historical freight transport policy supported primary economic development, failing to preempt the changing economic structure and the resulting freight transport needs, resulting in excessive transport costs and externalities. Objectives: To share the macroeconomic freight transport challenges revealed by South Africa’s Logistics Barometer, and to identify key interventions to address these. Method: Freight flows are modelled by disaggregating the national input–output model into 83 commodity groupings and 372 geographical areas, culminating in a 30-year forecast at 5-year intervals for three scenarios, followed by distance-decay gravity modelling to determine freight flows. Logistics costs are calculated by relating these flows to the costs of fulfilling associated logistic functions. Results: Long-distance transport remains the largest general freight typology and is, due to inefficient macro logistics design, extremely costly, both in terms of intrinsic and extrinsic costs. Conclusion: South Africa’s freight task will grow 2.5-fold by 2043. Logistics and externality costs are already untenable at current levels. The development of domestic intermodal solutions will support the drive towards sustainable freight mobility.http://www.jtscm.co.za/index.php/jtscm/article/view/228Publisher's versio

Container terminal spatial planning : a 2041 paradigm for the Western Cape Province in South Africa

The original publication is available at http://www.jtscm.co.za/index.php/jtscm/article/view/59This paper investigates the suitable location for an intermodal inland container terminal (IICT) in the city of Cape Town. A container market segmentation approach is used to project growth for container volumes over a 30-year period for all origin and destination pairings on a geographical district level in an identified catchment area. The segmentation guides the decision on what type of facility is necessary to fulfil capacity requirements in the catchment area and will be used to determine the maximum space requirements for a future IICT. Alternative sites are ranked from most suitable to least suitable using multi-criteria analysis, and preferred locations are identified. Currently, South Africa’s freight movement is dominated by the road sector. Heavy road congestion is thus prevalent at the Cape Town Container Terminal (CTCT). The paper proposes three possible alternative sites for an IICT that will focus on a hub-and-spoke system of transporting freight

Sub-saharan Africa's rail freight transport system : potential impact of densification on cost

The original publication version is available at http://www.journals.co.za/ej/ejour_jtscm.htmlThe main response to sub-Saharan Africa’s (SSA) challenges has been foreign aid. Yet, despite the large amounts received, the challenges remain. There is an opportunity to consider a different model with less focus on aid and more on investment. In the transport sector specifically, investment decisions should be informed by a long-term optimal balance between different transport modes. The research presented in this paper highlights the significant cost reduction opportunities possible through the densification of rail freight, especially over longer distances, with concomitant implications for increased profitability for rail operators. The densification opportunity should also place a core focus on transport corridors being developed throughout the region. SSA countries themselves can play a critical role in unlocking this potential through, inter alia, simplifying regional economic communities and taking the lead in structuring agreements with the international community.Publishers' Versio

South Africa's freight transport involvement options in Sub-Saharan Africa : declining infrastructure and regulatory constraints

Thesis (MComm (Logistics))--Stellenbosch University, 2008.Although global changes like political security, depletion of natural resources, energy supply and global warming are affecting all continents; Africa struggle the most to cope with these changes. This is due to the many historical impediments that Africa still has to overcome. Examples of these impediments are the negative effects caused by civil wars, poverty, poor infrastructure and a lack of skills. Providing reliable, effective and efficient infrastructure underpins all attempts to facilitate trade, grow the economy and reduce poverty in Sub-Saharan Africa (SSA). SSA transportation related infrastructure is limited and generally in a poor condition. This poor state of transport infrastructure impedes SSA's development. However, it is not only the state of the infrastructure that challenges Africa - complicated customs and administrative procedures and inefficiencies when goods are handled at terminals and transferred from one transport mode to another also impede its potential for economic growth. In spite of these limitations, the SSA economy has been growing. As many as 28 countries (out of 48) in SSA recorded improvements in growth in 2006 and 2007. This growth was underpinned by improvement in macro-economic management in many countries, and a strong global demand for key African export commodities (sustaining high export prices, especially for crude oil, metals and minerals). Greater flows of capital to Africa, debt relief and increasing trade with the developing Asia have also helped increase resources and lift growth across SSA. The strong economic growth in the region also reflects the institutional improvements, structural reforms, and more rigorous economic policies that have started to bear fruit in many countries

Freight corridor performance measurement system : a framework for South Africa

CITATION: Havenga, J. H. & De Bod, A. 2016. Freight corridor performance measurement system: a framework for South Africa. Journal of Transport and Supply Chain Management, 10(1), a252, doi:10.4102/jtscm.v10i1.252.The original publication is available at http://www.jtscm.co.zaENGLISH SUMMARY : Background: On a national level, South Africa’s freight logistics industry is inefficient. The country ranks 36th out of 40 countries in terms of transport productivity (tonne kilometres as a ratio of gross domestic product, or GDP); the ratio of freight logistics costs to GDP measured 11.1% in 2013, compared to that of developed regions which measures in the order of 9%; and rail tonne-km market share on the two most dense long-distance corridors, namely, GautengDurban and Gauteng-Cape Town, is only 12.8% and 4.4%, respectively, whereas rail is globally acknowledged as a more efficient provider of long-distance freight solutions, given appropriate investments and service commitments. Objectives: A cornerstone of improved national freight logistics performance is the availability of reliable indicators to quantify the efficiency and capacity of the logistics network over the intermediate and long term, thereby enabling an evidence-based policy and investment environment. The objective of this article is to describe the foundation framework (i.e. phase 1) for South Africa’s freight corridor performance measurement system (CPMS). Once populated, the CPMS will be a key generator of indicators to facilitate the systemic management of corridors as a national production factor and thereby contributing to South Africa’s competitiveness. Method: The design of South Africa’s CPMS was informed by desktop research and refined through an extensive stakeholder consultation process. A distinction was made between South Africa’s dedicated bulk corridors and the multi-modal corridors. Results: Facilitating both stakeholder involvement and agreement on key indicators, as well as the eventual development of a system supporting the population, aggregation and dissemination of the CPMS are critical outcomes for the management of corridors as a national production factor. Three overarching corridor indicators were defined, relating to increased throughput, lower costs and optimal modal application – the key rationale to improve the competitiveness of South African industry. This is supported by three corridor measurement perspectives, that is, a policy, customer service and infrastructure perspective. The purpose of the policy perspective is to support the role of national government in facilitating logistics competitiveness and equitable access through appropriate policy instruments. The customer service perspective should track service reliability and efficiency as contracted, at costs and cycle times that facilitate the competitiveness of the freight owner. The infrastructure perspective indicates whether sufficient capacity is provided, and whether this capacity is both available when required and utilised optimally. Conclusion: Elevation of logistics to the macroeconomic realm through the development of appropriate indicators will enable the management of logistics as a national production factor, thereby contributing to reducing national freight logistics costs and improving industry competitiveness.http://www.jtscm.co.za/index.php/jtscm/article/view/252Publisher's versio

South Africa's freight rail reform : a demand-driven perspective

Havenga, J.H., Simpson, Z.P. & De Bod, A. 2014. South Africa’s freight rail reform: A demand-driven perspective. Journal of Transport and Supply Chain Management, 8(1):1-7 (Art. #153), doi:10.4102/jtscm.v8i1.153.The original publication is available at http://www.jtscm.co.zaDuring the 20th century, freight transport in South Africa was employed to attain politicoeconomic ideals, resulting in the overprotection of rail and overregulation of road transport. Increasing industry pressure, combined with the international deregulation trend, led to deregulation in 1988. Myopia resulted in a rail investment hiatus and exponential growth in high-value, long-distance road transport, causing excessive logistics and externality costs for the country. The aim of this study was to propose a freight rail reform agenda based on, (1) lessons from past freight transport policy efforts and (2) the results of freight transport market segmentation driven by models developed over the past two decades. For the study, freight flows were modelled by disaggregating the national input–output model into 372 origin–destination pairs and 71 commodity groups, followed by distance decay gravitymodelling. Logistics costs were calculated by relating commodity-level freight flows to the costs of fulfilling associated logistical functions. The standard management approach of founding strategy development on market-driven segmentation provides a neutral input to steer rail reform discussions in South Africa. Market segmentation points to a dualistic rail reform agenda, enabling both a profit-driven core and a development-driven branch line network. Freight flow insights are steering the policy reform debate towards long-term freight strategy development and optimal freight logistics network design.http://www.jtscm.co.za/index.php/jtscm/article/view/153Publisher's versio

Macro-logistics trends : indications for a more sustainable economy

The original publication is available at http://www.jtscm.co.za/index.php/jtscm/article/view/108The North American and South African logistics cost calculation-time series are the two longest-running statistical series available worldwide. These calculations indicate that transportation’s contribution to logistics costs is rising, as the key cost driver (oil price) is increasing exponentially. This is exacerbated by volatile oil prices and the inclusion of externality charges to reduce the logistics environmental footprint. Therefore, it is necessary to consider a new paradigm where material logistics requirements are reduced through localisation and consumption reduction. This, in turn, implies the consideration of new indicators for the future measurement of logistics costs. Because this article asks questions about the suitability of GDP as the primary (and often only) measurement of economic output, new measurements are required. If this position changes, the comparison of logistics costs with GDP alone will become questionable.Publishers' Versio

South Africa’s rising logistics costs : an uncertain future

Havenga, J.H., Simpson, Z.P., De Bod, A. & Viljoen, N.M. 2014 South Africa’s rising logistics costs: an uncertain future. Journal of Transport and Supply Chain Management 8(1):1-7, (Art. #155), doi:10.4102/jtscm.v8i1.155.The original publication is available at http://www.jtscm.co.zaA country’s competitiveness can be severely hampered by an uncompetitive freight logistics system. During the first decade of the 21st century, two in-depth models were developed for South Africa which provide a framework for measuring and improving the country’s freight logistics system – the cost of logistics survey and the freight demand model. These models also allow for the development of scenarios for key identified risks. The objectives of this study were to provide an overview of South Africa’s surface freight transport industry, identify key risks to national competitiveness and suggest ways in which these risks could be mitigated. Freight flows were modelled by disaggregating the national input–output model into 372 origin–destination pairs and 71 commodity groups, followed by distancedecay gravity-modelling. Logistics costs were calculated by relating commodity-level freight flows to the costs of fulfilling associated logistical functions. South Africa’s economy is highly transport intensive. Excessive dependence on road freight transport exacerbates this situation. Furthermore, the road freight transport’s key cost driver is fuel, driven in turn by the oil price. Scenario analysis indicated the risk posed by this rising and volatile input and should provide impetus for policy instruments to reduce transport intensity. As such, this study concluded that a reduction in freight transport intensity is required to reduce exposure to volatile international oil prices.http://www.jtscm.co.za/index.php/jtscm/article/view/155Publisher's versio

Sustainable freight transport in South Africa : domestic intermodal solutions

The original publication is available at http://www.jtscm.co.za/index.php/jtscm/article/view/26Due to the rapid deregulation of freight transport in South Africa two decades ago, and low historical investment in rail (with resultant poor service delivery), an integrated alternative to road and rail competition was never developed. High national freight logistics costs, significant road infrastructure challenges and environmental impact concerns of a road-dominated freight transport market have, however, fuelled renewed interest in intermodal transport solutions. In this article, a high-level business case for domestic intermodal solutions in South Africa is presented. The results demonstrate that building three intermodal terminals to connect the three major industrial hubs (i.e. Gauteng, Durban and Cape Town) through an intermodal solution could reduce transport costs (including externalities) for the identified 11.5 million tons of intermodalfriendly freight flows on the Cape and Natal corridors by 42% (including externalities)