TFR maps out growth strategy for container business

Transnet Freight Rail has embarked on a range of initiatives to grow its share of container business from 17% to 30% in the next four years. This includes the establishment of a specialised unit, the container and automotive division, set to be launched in September this year, and collaboration with shipping lines, freight forwarders and cargo owners. Greater integration with ports is also a high priority. Bheka Xaba, sales and marketing executive manager for the container and automotive division, admits that TFR has not exploited its potential to the full. “In the past five years industry demand has been growing by double digits but TFR only managed to grow its capacity by 2%. We have now implemented a strategy that will see us grow our market share in the maritime industry from 17% to 30% by 2012/13 and in the domestic or crossborder logistics sector from 5% to 20% in the same period. And already, he says, the plans and initiatives are bearing fruit. “In December 2007 we had an average of three trains per day moving from our yard in City Deep to Durban and back. That has been increased to an average of 16 trains a day at the moment while we are convinced we are going to meet our target of 24 trains a day by the end of the 2009/2010 financial year.” Xaba said the transformation journey had seen TFR investing heavily in port and rail as well as its City Deep operations to create capacity ahead of expected demand. “A few months back our trains were still interdependent, but we have changed it completely. Our times have improved and we are seeing very few delays occurring. Our train capacity utilisation is now around 95% compared to the 70% in 2007.” According to Xaba TFR currently has an active fleet of 7400 wagons, and while no new locomotives are on order for the current financial year, upgraded rolling stock released from the ironore lines is set to improve the container trains’ time significantly. “Our rates are very competitive and by our calculations we can give a client a cost saving of up to 35% in comparison to road.” With R749 million approved already for the first phase of upgrading the City Deep yard, a whopping R1.4 billion will be invested in the new unit during the second phase to ensure the container and automotive division can meet demand. “We have attracted several new customers including Woolworths, BMW, Sony and Samsung. We are actively marketing ourselves to mining and resources companies as we believe we can offer them real value service at lower rates than what they are currently paying,” said Xaba. TFR is expecting to see this new unit turn over R3 billion by the 2012/13 financial year thanks to improved efficiencies. In the last financial year TFR revenue was just over R15 billion of which R1 billion was from the container and automotive unit.