Rail inefficiency skews SA’s logistics model

Survey finds road carries three quarters of long-haul tonnage ALAN PEAT THE HIGH cost of logistics is a core structural problem in this country, according to the first annual “State of Logistics Survey for SA” just released by the Council for Scientific and Industrial Research (CSIR). It represents a considerable percentage of the gross domestic product – totalling R180-billion or 14.7% of the GDP, compared to 8.5% in the USA, for example. And inefficiency in rail services was one of the factors that contributed to these high logistics costs, the survey added – making products for local consumption more expensive and reducing SA’s price-competitiveness in the global market. The “normal” macro economic model is to transport long-distance corridor freight by rail, according to the survey, with feeder and distribution services provided by road. “In SA, however, structural shortcomings have caused an unhealthy situation, with three quarters of long-haul tonnage being transported by road. “Also, SA’s dense long-haul road corridors are intrinsically more expensive than a possible inter-modal (win-win) solution.” The survey was sponsored by Spoornet and the CSIR – which in turn worked with research partners at the University of Stellenbosch department of logistics and business school, and Executive Development Ltd. It is the first that measures intrinsic logistics costs for the SA economy, and the CSIR is planning to make it an annual study that will provide a comprehensive and updated picture of the state of logistics in SA, according to Hans Ittmann, manager of the CSIR centre for logistics and decision support (CLDS). “As SA grapples with new investment requirements in rail, highway, ports and other logistics infrastructure,” he said, “policy-makers experience an ever-increasing shortage of useful tools to guide decision-making and measure performance. “The survey aims to fill this void specifically.”