Rail’s incompetence underpins SA’s logistics challenges

South Africa’s logistics system needs a major overhaul, says Pieter Fourie, senior researcher with the Centre for Supply Chain Management at the University of Stellenbosch Department of Logistics. “Freight is being moved in an inefficient and cost-ineffective manner due to the wrong freight being moved by the wrong mode. This is not necessarily the problem, but simply a result of a problem,” he told FTW. “Years of under-funding of rail since 1985 have forced rail friendly freight onto road – and getting the freight back onto rail is proving to be an exponentially harder task than anticipated.” He says the inability to restructure rail into low and highdensity businesses in the nineties exacerbated the problem and continued cross-subsidisation. Fourie says a combination of under-funding and crosssubsidisation will always lead to rail-friendly cargo being moved on road and the other way round. “Our single biggest challenge has to be reducing the total logistics cost in the country. This necessarily means transporting freight more efficiently and costeffectively. What complicates this problem in South Africa, when comparing it to other countries around the world, is that our economic heart is situated inland with no access to a navigable river,” he said. “This means we are not able to use any form of water-based transport to and from the capital city, leaving us with road and rail as the only alternatives. Rail has been heavily under-funded since its deregulation, which has created a capacity shortfall and forced shippers to use road.” Simply put, says Fourie, is that more long-distance freight has to go on rail. “Whether this is actually achievable with people’s perception of Transnet’s track record is another question,” he said. “But internationally rail has proved to be the most costeffective way of freight transport over medium- to long-distance over dense corridors, and this should also be pursued in South Africa. Rail also carries the additional benefit of not being at the mercy of the oil and fuel prices as the majority of movements in South Africa are on electrified rail.”