Agreement with Spoornet favours off-road delivery
MOTORVIA, WHICH has held a virtual monopoly of the car-carrying business for the last 25 years, has lost the Volkswagen contract to a new Port Elizabeth-based consortium.
Forecourt Express is headed up by Co-ordinated Transport, which was the sole carrier for Ford for 15 years, until the motor manufacturer closed its Port Elizabeth plant in 1985.
Confirming that it had decided to award the tender to transport between 50 and 60000 new and used cars a year to Forecourt Express, Volkswagen South Africa spokesman Matt Gennrich said the decision had been made on business principles. There is now competition that wasn't there before.
Forecourt Express's proposal was better than Motorvia's judged on normal business criteria of price and availability, he told FTW.
The new company is a
consortium of Cargo Africa and Co-ordinated Transport.
We were in this game before. We had the contract to deliver Ford vehicles for 15-odd years before Ford closed down in 1985, Forecourt Express chairman AndrŽ Jensen told FTW.
This new joint venture combines Co-ordinated transport's management expertise and information technology and Cargo's investment capacity, he said.
The Motorvia contract has six months to go and during this time Forecourt Express will be investing in the necessary vehicles. The trend is towards off-road delivery. Driving cars in those long convoys is not a desirable delivery mode, says Jensen. We added a lot of new thinking into the equation as well, he adds.
This new thinking has included working closely with Spoornet, which ended the monopoly on the transport of vehicles on two-tiered train carriers at the beginning of this year.
The use of two-tiered trains has been opened since January 1, 1998 when Spoornet cancelled its contract with Rail Deliveries, says Jensen. We will work very closely with Spoornet. We have had lots of negotiations with Spoornet already.
Basically it is Volkswagen, as a strategic partner, who will decide in the end which mode we use, he said.
A combination of factors, including the termination of the rail monopoly and the withdrawal of Unicorn's coastal service, made it possible for Co-ordinated to re-enter the car carrier market.
Both the agreement with Spoornet and the ro-ro were barriers to entry, said Jensen.
With these barriers out of the way Forecourt Express could be targeting other motor manufacturers. Every business that exists is dynamic and we will actively look for new opportunities.
Jensen says it is too early to tell what the full investment by Cargo and Co-ordinated Transport will be in the new company.
The vehicles that are going to be put in place are going to be within the Imperial group. Imperial is Cargo's holding company. The investment will be phased in, depending on what is needed, said Jensen. Forecourt Express will be taking over Volkswagen's car marshalling yard, which is currently on lease to Motorvia.
By Ed Richardson
