Shippers call for rail regulator

Calls have gone out for the appointment of a rail regulator following proposals by Transnet Freight Rail to push up rates by amounts up to more than seven times the current inflation rate. Without a rail regulator to turn to, rail users feel they are without a voice on the issue. TFR has proposed rate increases of between 10% and 30% depending on corridor and container category – with a national average of a 10% increase. The proposal has stunned the SA Association of Freight Forwarders, according to maritime adviser Dave Watts, and the association – together with broader business – is busy trying to arrange a meeting with TFR senior management. Not only does Watts see this having a serious effect on exports and imports, which have to use rail, but it will also increase the traffic by road. “These rail rates will increase much more than the consumer price index (CPI), and – as an organisation – we are very surprised that TFR thinks such increases are appropriate.” Watts accused TFR of being a state-owned monopoly that feels it can arbitrarily increase rates – with no justification of each rates hike except that its costs are increasing. “We believe that they are to fund TFR’s investment in infrastructure,” he added. “But we don’t understand, from a business perspective, why customers should pay for it in advance. “These continually increasing logistics costs are seriously affecting this country’s ability to conduct business.” Kevin Martin, MD of Freightliner and chairman of the Durban Harbour Carriers’ Association (DHCA), was equally critical. “We now have TFR operating in a silo mentality with a proposed increase of between 10% and 30%,” he said. “Unlike electricity and water – for which there is no alternative – rail has a very viable alternative, namely road. Georgi Georgiev, an executive with rail users Grindrod Intermodal, has called for a rail regulator to be appointed. “With inflation below 4% and the Ports Regulator cutting the Transnet National Ports Authority (TNPA) rates demand to a 4.49% increase,” he said, “TFR going for increases between 10% and 30% is just inconceivable.” Industry must lobby for the rail regulator, he added. Raj Maistry, MD of rail user JVC Freight Carriers, had just one word of criticism about the massive rates hike. “Exorbitant,” he said.