JavaScript is disabled for your browser. Some features of this site may not work without it.
Please be advised that the site will be down for maintenance on Sunday, September 1, 2024, from 08:00 to 18:00, and again on Monday, September 2, 2024, from 08:00 to 09:00. We apologize for any inconvenience this may cause.
An Investigation into the Factors Contributing to Rail Freight Losing Market Share: A South African Perspective
Transnet Freight Rail (TFR) has positioned itself in the market as a low cost provider of transporting freight, with the intention of achieving a sustainable competitive edge and a bigger market share. However, despite this strategy, which involves Market Demand Strategic planning, TFR has been losing market share to road freight and that has influenced the organisation’s revenue and sustainability. Transportation is a vital link in the value chain and contributes millions to an economy, yet produces many negative externalities, such as CO2 emissions. In South Africa, rail and road are the preferred modes of transport, and while railway transport produces less than one third of the emissions produced by road transport, the latter has become the preferred mode. Freight rail is losing market share to road freight and this study investigated the reasons. An interpretivist, qualitative content analysis was performed. Eight senior managers at Transnet Rail Freight were interviewed and it was found that the organisation lacks management skills, is unable to adapt to market demands; operates under unfavourable economic conditions; has to get by with aging infrastructure; under-utilises other assets; and is not customer centric. It is recommended that a skills audit be performed, and an audit of underutilised assets. Change should be managed more proactively to regain market share. This paper contributes theoretically to the body of knowledge on transportation in South Africa. Practically, senior managers at TFR will become aware of the challenges pointed out, which may aid decision making in the future.
Description:
Papers presented at the 38th International Southern African Transport Conference on "Disruptive transport technologies - is South and Southern Africa ready?" held at CSIR International Convention Centre, Pretoria, South Africa on 8th to 11th July 2019.