Private-sector involvement in what are at present state logistics monopolies, are among the related recommendations in the paper, “Economic transformation, inclusive growth and competitiveness: Towards an Economic Strategy for South Africa” which was released by Finance Minister Tito Mboweni for public comment. It states: “Introducing competition between port terminal operators and in other areas such as warehousing and logistics at the ports could bring the performance of the major ports in line with international best practice.” It goes on to recommend that “the location, planning, financing, development and operation of intermodal freight terminals should be conducted jointly by private sector logistics companies and the rail operator”. The paper recognises that “intra-regional logistics requires joint action across a range of areas, including border controls, standards, storage facilities, and increasing competition and investment in infrastructure” in order to support regional trade growth within the Southern African Development Community. Still on the regional expansion theme, the next recommendation is as follows: “Recent trends suggest that the most dynamic markets for South African exports lie in regional markets, which is precisely where smaller exporters and exporters in non-mining sectors are focused. The transport and logistics sector, which underpins a firm’s ability to access cheap inputs, and to land products in foreign countries at a competitive price, is particularly important, given the rise of regional and global value chains.” Referring to rail, the authors of the paper state the main constraint to effective regional road freight transportation is a lack of harmonisation of standards and pricing across the SADC. “There are also non-tariff barriers that exist across the SADC that inhibit the ability of road transporters to move cargo across the region. Improving integration in service and network provision for regional (cross-border) rail can be achieved by: improving border-crossing arrangements; establishing joint border stations or moving clearance to defined inland terminals; and ensuring the co-ordination of track access charges across freight corridors within the region”. The paper says the establishment of joint operating centres (JOCs) offers a potentially attractive solution – JOCs on the Maputo and NorthSouth Corridors have reduced transit times by more than 50% and have had a positive impact on operating costs and tariffs. Domestically, the authors want to see competition introduced into the retail sector by the government, facilitating access to distribution centres and logistics networks to support new entrants and independent retailers. There are clear benefits: “By reducing burdens on the ability to trade across borders, the time and cost savings of freight transportation and logistics are expected to promote production in sectors such as agriculture, steel, and wholesale trade, for which freight is a large cost component,” states the discussion paper. Comments may be sent to Rita.Coetzee@treasury.gov.za by 15 September 2019. The paper can be downloaded from http:// www.treasury.gov.za/
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Intra-regional logistics requires joint action across a range of areas, including border controls, standards and storage facilities – Tito Mboweni