SA to play leading role in new Asia transport corridor

South Africa will become
the starting point of a new
transport corridor to Asia
in the decades ahead – but
significant investment in
transport infrastructure
is crucial to develop new
transport routes and expand
existing ones.
According to recent
research into transport
and logistics trends in the
decades ahead undertaken
by PricewaterhouseCoopers
– Transportation & Logistics
2030 – emerging markets
– global trade in goods and
services is likely to rise more
than threefold to US$27
trillion in 2020. And half
of the increase is expected
to come from emerging
economies.
PWC director Akhter
Moosa told FTW there was
general consensus that this
development would relocate
global trade flows and new
transport corridors would
emerge.
“The African continent,
including South Africa, is
already experiencing this
shift,” said Moosa. “Emerging
markets such as China and
South Africa fared relatively
well during the recent
economic downturn, and
freight flow between these
emerging market countries
continued to strengthen.
Asia’s heavy industry has
been an important source of
demand for iron ore and coal
and South Africa remained
an important source of these
commodities,” he said.
China and India are a
huge demand source of
commodities, says Chris
Siewierski of PWC’s
corporate finance division.
“In the first quarter of
2009, some 25% of coal out
of Richards Bay went to
China or India. By the first
quarter of 2010 that had
changed to 42% which shows
the dynamics in terms of
the growth of commodities
out of South Africa to those
countries.”
But South Africa’s
potential is currently being
throttled – with significant elements in the country’s
logistics performance
way below par. However,
Siewierski is confident that
current interventions could
turn the situation around.
In a recent World Bank
report, South Africa
slipped from 24th a year
ago to its latest ranking of
28th out of 155 countries
in terms of logistics
performance based on
six criteria – customs,
infrastructure, international
shipments, logistics
competence, tracking &
tracing and timeliness.
China, at 27, led the
group of seven emerging
markets ahead of South
Africa.
But while South Africa
was top of the pile in terms
of competence and quality
of logistics services, it was
ranked 57 on the timeliness
scale.
“And this was largely
because of the quality
of infrastructure,” says
Siewierski.
He is however confident
that with adequate
intervention, the country
could well move up
the ranks in terms of
logistics efficiency.
The main driving force
behind this will be
significant investment by
Transnet in rail and ports.
“Infrastructure upgrades
will translate into improved
performance, but the
question is whether we will
make sufficient progress
relative to the others.”