Freight News features editor Liesl Venter sat down with global transport expert Andrea Giuricin, a transport economist at University Milan Bicocca in Italy, and CEO of TRA Consulting, for his perspective on the age-old rail vs road debate.
LV: Off the bat road or rail? What are your thoughts on this ongoing debate?
AG: There is no perfect answer. Not from a South African or international perspective. In reality I think that we have to start our analysis on logistics and transportation from the results achieved. In other words what is the most efficient and best way to transport goods in any one region. If we start from this point of view, from a market perspective, we go from competition between different transport modes, to cooperation. Around the world intermodality is gaining ground and is becoming a part of the discussion in this debate. We have to change our mindsets and accept intermodality. In many cases it is the best answer for logistics and passenger transport challenges.
LV: What are your thoughts on the South African road/rail situation?
AG: In South Africa there is potential for greater market share for rail transport. Efficiency has to be key to this growth and intermodality could help to make logistics more efficient. It is important that government has a long-term objective because rail infrastructure projects need time to be completed. Another option to consider is the introduction of wider competition in the sector to push innovation and increase efficiency. The process of liberalisation is not easy and cannot be a copy-paste from other countries. It has to be well designed by South Africa for South Africa with a long-term target.
LV: What are the biggest challenges for the rail freight sector here and internationally?
AG: Competition is a key driver of development in many markets. It is not easy to break into the rail industry, but liberalisation goes a long way towards efficient logistics systems. Intermodality is important, but it has to be well designed. The process of ensuring an efficient system is long and very complex and not a ‘one size fits all’. The South African market is completely different from that of Europe or America for example.
LV: And your thoughts on road freight? This sector has to work together with other transport modes. It is the only feasible way. Intermodality could help to develop the road transport sector. Efficient dry port infrastructure that is well connected to the rail freight network will lead to stronger road networks in the future.
LV: What should developing countries be looking at for solutions considering the dependency on road and the lack of rail infrastructure across the continent.
AG: For South Africa, I think it is important to underline the results of the logistics performance index of the World Bank. From 2007 to 2018, South Africa lost five positions in the ranking, from 28th to 33rd. For the infrastructure sub-index, South Africa was in position 36 in 2018 from 29th in 2007. It is important to increase investment in the infrastructure, and to introduce transparent and light regulation. In the transport sector, for example, an independent regulator could be introduced with the sole purpose of addressing the challenges of regulation. The opportunities are there but it requires fixing social and economic targets, reducing the role of politics, and introducing clear policies and regulation.
LV: What are the trends that you are seeing elsewhere in the world around road and around rail?
Rail freight has suffered from the Covid-19 crisis. In many countries the decrease in traffic has been around 30%. It is interesting that many regulators and governments are now discussing economic measures for relief in the rail sector. Contributions from governments, however, need to be combined with policies for increasing the competitiveness of the rail sector. Pro-competition policies, with the introduction of good economic regulation, should be considered by many governments in Africa.Another trend we are seeing is an increase in intermodality, with ports and logistics hubs going up and increased investment from the private sector.
