Department of Transport

1. Department of Transport IMPLEMENTATION OF THE NATIONAL FREIGHT LOGISTICS STRATEGY STAKEHOLDER MEETING 09 FEBRUARY 2010

2. CONTEXT MINISTERIAL PRIORITIES THE STRATEGY GLOBAL SOUTH AFRICAN IMPLEMENTATION PLAN Regulatory Framework Ports Rail Road CHALLENGES WAYFORWARD TRANSPORT LEKGOTLA RECOMMENDATIONS CONTENT

3. TRANSPORT SAFETY & SECURITY RURAL ACCESS & MOBILITY INTERVENTIONS PUBLIC TRANSPORT FREIGHT & LOGISTICS 2010 WORLD CUP LABOUR INTENSIVE PROGRAMMES MINISTERIAL PRIORITIES

4. THE STRATEGY

5. Department of Transport THE STRATEGY • August 2005, Cabinet approval • Objectives of Strategy: • To lower the cost of doing business in the Republic • To promote integrated planning across spheres and stakeholders • To deal with cross border freight operations & infrastructure in S.A., SADC and the Continent • To facilitate seamless movement of cargo between first & second economy • To promote public-private-partnership • Develop corridor strategies

6. The freight system in South Africa is fraught with: Inefficiencies at system and firm level Structural infrastructure shortfalls and mismatches The institutional structure of the freight sector is inappropriate A lack of integrated planning Information gaps and asymmetries abound The skills base is deficient; and, The regulatory frameworks are incapable of resolving the problems in the industry. The Problem Statement

7. Institutional Reform Sub sectoral Strategies Airfreight Branch Lines Road Freight; and Port Reform National Freight Information System Databank Monitoring Framework FIFA Confed & 2010 World Cup Freight Plans Freight and Logistics Forum Provincial forums Cross Border Optimisation Plans Intermodal Facilities STRATEGIC INITIATIVES

8. Most modes not responsive to demand side Capacity Price Level of service Quality of service Freight logistics system not aligned to National development strategies Lack of regulatory framework to shift system in desired directions Institutional framework inappropriate The Current Situation

9. GLOBAL

10. Connectivity is required for success in the global economy Africa is being left out of economic globalization: share of global trade has been declining for decades from nearly 4% in 1960s to under 2% today.

11. RSA position relative to markets and trade routes

12. Low volumes and inefficient shipping markets lead to high ocean freight rates for SA and the region Comparison of sea freight rates from a North European hub

13. Lome (Togo) Monrovia (Liberia) Takoradi (Ghana) Lagos (Nigeria) Cotonou (Benin) Onne (Nigeria) Tema (Ghana) Abidjan (Côte d'Ivoire) San Pedro (Côte d'Ivoire) Douala (Cameroon) Libreville (Gabon) Dar es Salaam (Tanzania) Pointe Noire (Congo) Tanga(Tanzania) Mombasa (Kenya) Nacala (Mozambique) Toamasina (Madagascar) Beira (Mozambique) Port Louis (Mauritius) Maputo (Mozambique) Walvis Bay (Namibia) Richards Bay (SA) Durban (SA) East London (SA) Port Elizabeth (SA) Cape Town (SA) A regional approach is required to build economies of scale and drive transport system efficiencies Volumes are critical to increasing connectivity. SA’s market too small to compete successfully. Regional growth prospects are stronger than ever. Regional freight systems need to consolidate to drive down costs and increase connectivity. Feeder system opportunities for BEE.

14. Ocean freight cost is the largest determinant of South African supply chain competitiveness Note: Based on case studies Sources: Industry interviews, Moving South Africa Analysis

15. SOUTH AFRICAN

16. Freight Transport 2003 Department of Transport

17. Freight Transport 2004 Tonnage 1105mt (270) Figure in brackets denotes average transport distance Road 920mt (200) Rail 185mt (600) Metropolitan 580mt (75) Rural 200mt (200) Corridor 140mt (680) Corridor 45mt (680) Rural 30mt (475) Metropolitan 10mt (150) Sishen & Rbay 100mt (670) Tonkm 300bn Road 190bn Rail 110bn Metropolitan 45bn Rural 40bn Corridor 95bn Corridor 30bn Rural 15bn Metropolitan 1bn Sishen & Rbay 65bn Income R120bn Road R105bn Rail R15bn Metropolitan R30bn Rural R25bn Corridor R50bn Corridor R6bn Rural R2bn Metropolitan R1bn Sishen & Rbay R5bn CSIR 2005

18. Freight Transport 2006 Figure in brackets denotes average transport distance Tonnage 1533mt (233) Rail 196mt (617) Road 1337mt (177) Metropolitan 777mt (77) 50,5% Rural 380mt (179) 25% Corridor 180mt (600) 11,5% Corridor 41mt (683) 3% Rural 47,5mt (505) 3% Metropolitan 8mt (250) 0,5% Sishen & Rbay 99,5mt (673) 6,5% Tonkm 357bn Rail 121bn Road 236bn Rural 68bn 19% Corridor 108bn 30% Corridor 28bn 8% Rural 24bn 7% Metropolitan 60bn 16,5% Metropolitan 2bn 0,5% Sishen & Rbay 67bn 19% CSIR/USB 2006

19. Freight Transport 2007 Tonnage 1578mt (237) Figure in brackets denotes average transport distance Road 1373mt (178) Rail 205mt (629) Metropolitan 793mt (77) 50% Rural 384mt (177) 24% Corridor 196mt (591) 12,5% Corridor 46mt (685) 3% Rural 51mt (529) 3% Metropolitan 9mt (278) 0.5% Sishen & Rbay 99mt (687) 6% Tonkm 374bn Rail 129bn Road 245bn Metropolitan 61bn 16% Metropolitan 2,5bn 0,5% Sishen & Rbay 68bn 18% Rural 68bn 18% Corridor 116bn 31% Rural 27bn 7% Corridor 31,5bn 8,5% CSIR/USB 2007

20. IMPLEMENTATION OF NFLS

21. CHALLENGES BRANCH LINE STRATEGY TRANSNET WILLINGNESS TO MANAGE NETWORK OVER 5 YEARS FUNDING MECHANISM FOR NETWORK TRANSNET HR/LABOUR ISSUES ABSENCE OF COMPREHENSIVE RAIL POLICY ROAD FREIGHT STRATEGY REDUCTION OF AXLE MASS LIMIT ON SECONDARY NETWORK VS RAIL TRANSPORT READINESS LAW ENFORCEMENT CAPACITY AIRFREIGHT STRATEGY ABSENCE OF AIRFREIGHT STATISTICS INSTITUTIONAL ARRANGEMENT DOT VS DPE INSTITUTIONAL RESPONSIBILITIES

22. WAYFORWARD RAILWAY BRANCH LINES AGREE ON BRANCH LINE CONCESSIONING MODEL WITH NATIONAL TREASURY PRESENTATION ON BRANCH LINE STRATEGY TO NEDLAC TRANSNET STATE OF READINESS ON ROLLING STOCK PROGRAMME FOR LEASING PURPOSES FAST-TRACK RAIL ECONOMIC REGULATION & POLICY PROCESSES PRESENTATION OF BRANCHLINE STRATEGY TO INFRASTRUCTURE DEVELOPMENT CLUSTER OF DGs PRESENTATION OF STRATEGY TO CABINET CONCESSIONING PROCESS START 2014 ROAD FREIGHT STRATEGY ARRANGE CONSULTATIVE WORKSHOP WITH STAKEHOLDERS ENGAGE TRANSNET ON STATE OF READINESS FINALISE INCEPTION REPORT FOR DG & MINISTER APPROVAL FINALISE GAZETTING PROCESS ON AXLE MASS LIMITS

23. LEKGOTLA RECOMMENDATIONS APPROVAL OF DRAFT RAIL BRANCH LINE STRATEGY FOR EXTERNAL CONSULTATION (e.g. NEDLAC) & CABINET APPROVAL POLITICAL ENGAGEMENT WITH NATIONAL TREASURY ON FUNDING/SUSBIDISING CONCESSIONING PROCESS TRANSNET RING-FENCE NETWORK & MANAGE OVER NEXT 5 YEAR PERIOD (2010-14) & POSSIBLY BEYOND? APPROVAL OF DEVELOPMENT OF ROAD FREIGHT STRATEGY FOR EXTERNAL CONSULTATION & CABINET APPROVAL REVIEWAL/REDUCTION OF ROAD AXLE MASS LIMITS BY ONE TON/AXLE ON SECONDARY ROAD NETWORK & FUTURE ROLL-OUT PENDING ON RAIL CAPACITY READINESS 9000 KG TO 8000 KG 18000 KG TO 16000 KG 24000 KG TO 21000 KG OPTIMUM SPLIT OF CARGO BETWEEN ROAD & RAIL SUPPORT IMPLEMETATION OF AU MARITIME CHARTER & PLAN OF ACTION PROMOTION OF TRANS-AFRICAN CABOTAGE STRENGTHEN MARITIME TRANSPORT SECURITY & SAFETY HUMAN CAPACITY BUILDING ROADSHOW ON IMPLEMENTATION OF STRATEGY TO PROVINCES & MUNICIPALITIES IMPORTANCE OF STRATEGIC PROVINCIAL INTERVENTIONS/FACILITIES APPROVAL OF GENERAL IMPLEMENTATION PLAN OF THE FREIGHT LOGISTICS STRATEGY

24. Department of Transport THANK YOU