Land freight market analysis and strategy

Abstract

Paper presented at the 23rd Annual Southern African Transport Conference 12 - 15 July 2004 "Getting recognition for the importance of transport", CSIR International Convention Centre, Pretoria, South Africa. Studies over the past years showed that South Africa needs to become more internationally competitive despite its location, remote from some of the world's major markets. So, one means of achieving this is to optimise inland freight transport costs, especially on the corridors between the coast and Gauteng. It has been argued that there is inequality in terms of regulations and charges governing road and rail transport in favour of road haulage and that there could be capacity on rail. On the other hand, overloaded trucks are inflicting considerable damage to the road system, while at the same time imposing hidden costs on society in the form of accidents, congestion and pollution. To date, only parts of this complex issue have been investigated and there is a danger that ad hoc decisions could negatively affect the competitiveness of certain commodities unless the entire logistical chain is considered, including private industry's perspectives. Some key factors include time costs, crime-related risks, flexibility and general level of service. The paper will address the following topics: 1. Give a broad overview of what commodities are moved where and by whom. An attempt is made to identify the total size of the Land Freight Transport Market, in order to establish the size of rail, private road, public road and pipeline freight movements in South Africa. 2. The identification of strategic transportation corridors, capacity constraints and bottlenecks (current and future gaps) 3. A discussion of current and future investment needs to overcome bottlenecks and possibly areas where an investment strategy would be more appropriate.