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Comment on transport aspects addressed by the Minister of Finance

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The Minister of Finance has noted that they will use “higher than anticipated revenues” – which were generated through taxes, levies and all other manner of government revenue generation – to rescue a number of State-Owned Enterprises (SOEs) that are failing, bleeding capital, or are just not doing what they need to be doing.

Whilst we welcome the move to give Transnet badly-needed funding to repair, re-design or re-build vital pieces of infrastructure and equipment (ports, railways and related equipment for efficient operations), there is concern that the “usual suspects” have once again received “bailouts”.

However – “the funding impasse” of the Gauteng Freeway Improvement Plan (GFIP) (commonly referred to as ‘e-tolls’) has had an interesting twist. The Gauteng Provincial Government has agreed to contribute 30% to settling SANRAL’s debt and interest obligations, while national government will cover the remaining 70 %.

Does that mean it’s paid off now? There is no debt? Zip? Nothing? No need for the e-toll system then?

Ahh – but wait! Evidently, “Gauteng will also cover the costs of maintaining the 201 kilometres and associated interchanges of the roads and any additional investment in road will be funded through either the existing electronic toll infrastructure or new toll plazas, or any other revenue source within their area of responsibility.”

There we have it: e-tolls are not going. In fact, there may even be more gantries – or higher vehicle licence fees (in Gauteng only), or some other smart/ingenious way to charge for the “costs of maintaining” – the reference to “any other revenue source within their area of responsibility” being the key statement here.

However, the reality is that those who have not paid and refuse to pay will not suddenly pay now for maintenance. How will government ensure that they pay now? They still owe and government hasn’t tried to collect the default. Why would it suddenly work now (with the possibility of “new toll plazas”)?

Scrap the system ! It’s being “paid off” now anyway. Any new developments get paid cash through the fuel levy system. Stop using the fuel levy for other things  saving other SOEs comes to mind.

Whilst we ponder this one – some good news! It seems like the Minister is beginning to listen to endless comments, lobbying and interaction from the road freight sector:

  • The Economic Regulation of Transport Bill was passed. This should establish an independent transport regulator which will pave the way for greater competition and enable regulated access to the network – as long as private businesses are not punished for being efficient and competitive.
  • We need to understand what the Regulator really means for private business. It’s all fine for ensuring decent pricing in monopoly systems (like public transport systems, Eskom, water supply, etc, landing or berthing facilities in our government operated facilities, ensuring that there are no huge/unrealistic increases in tariffs by any authority in the transport world). But it doesn’t work for private business where competition, innovation and efficiencies are at play.
  • No amount of argument or discussion must ever allow price-fixing/setting within the private (business) sphere.

Then there is better news:

  • Third-party access to the freight rail network is being seriously considered – and perhaps there will actually be movement now.
  • Private-sector partnerships for the Durban Pier 2 and Ngqura container terminals (which the Road Freight Association has been calling for – for at least the last 10 years), is also now on the cards.
  • Allocations to the SAPS to increase capacity to deal with crime.
  • Processes and structures in place to deal with white-collar crime and corruption.
  • Funding for critical infrastructure

However, there are some glaring omissions:

  • Government needs to ensure we can release ourselves from fossil fuel (in this case oil) dependency. Now is the time to support, fund, develop and grow alternative energy systems. Locally developed, manufactured and supported.
  • Use of our great coal resources to implement short to medium term energy solutions. There are very clean and green methods around the world that can be implemented. But our largest resource – sun/solar – needs to be developed and expanded as quickly as possible. This requires funding.
  • Water security – along with food security – will (like the solar development) create the millions of job/employment opportunities that our country needs.

There was a greater expectation (perhaps in the form of a very loud bang) to the end of e-tolls. It didn’t happen. Is there a lesson to be learned from this?

Infrastructure that is of common good to the whole country, the economy, the development of society and upliftment of South Africa, needs to be developed at a cost shared by all South Africans – at the cheapest, least expensive and least intrusive means possible.

There is much potential in this speech – yet there is much we as South Africans require from our leaders in terms of direction. In terms of development. In terms of growth.

By Gavin Kelly – CEO of the Road Freight Association

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Logistics

New Multimodal Inland Port Association Launched at Transport Forum

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Railway freight train in South Africa

A significant milestone was reached in the South African logistics sector with the recent launch of the Multimodal Inland Port Association (MIPA). This new association was launched during the Transport Forum, an online event on 23 May 2024 attended by over 250 delegates, with a distinguished panel from industry, Transnet and academia. The event marked what many are calling the dawn of a rail renaissance in the country.

MIPA addresses a critical need in South Africa’s logistics landscape, which is increasingly grappling with rising costs and severe congestion. The association aims to act as the unified voice for inland ports across the nation, focusing on promoting, supporting, and advocating for the increased movement of cargo from road to rail.

Warwick Lord, MIPA

“Transporting more cargo by rail has become an imperative, considering the growing cost of logistics in South Africa. It is no longer just a nice-to-have,” says Warwick Lord, MIPA Chairman.

MIPA aims to reform the rail industry through private investment, foster trade activities that meet social objectives, and facilitate the crucial transfer of goods from road to rail. By optimising industrial and logistics activities through efficient multimodalism, logistics costs will be reduced, and efficiency will be improved.

Formed by leading entities in the transportation sector, including the Cato Ridge Inland Port, Tambo Springs Development Company, Portfutures, Autoforce, Mac Group, Cape Town Inland Port, the Cape Winelands Airport, the Musina Intermodal Terminal, RailRunner South Africa, and RailRunner Services, the association is committed to collaborating on best practices, particularly in through private sector participation (PSP). It will work closely with government and state-owned enterprises.

“We aim to create one voice for inland ports, driving workable multimodal solutions that deliver efficiency, cost reduction, and much-needed resilience to the South African supply chain. By doing so, we can mitigate the impact of external shocks and ensure stability in the logistics sector,” says Lord.

MIPA’s strategy to drive more cargo from road to rail includes using innovative multi-nodal technology and improving collaboration with other freight hubs and stakeholders, to optimise each supply chain link from a cost and efficiency perspective.

“Inland ports increase accessibility through long-distance transport corridors, leading to lower distribution costs and improved capacity by consolidating freight volumes,” explains Lord. “These multi-modal terminals can handle large amounts of cargo continuously, allowing sea ports to extend their cargo base, which is crucial given the increasing size of vessels.”

Furthermore, inland ports provide significant dedicated logistics developments, proximity to rail and highways, ample truck parking, and less traffic congestion.

Lord says MIPA is dedicated to facilitating free trade and promoting sustainable practices. The association will support its members in complying with sustainable development goals and the SADC Vision 2050.

Dr Juanita Maree

Dr Juanita Maree, CEO of the South African Association of Freight Forwarders (SAAFF), highlighted the launch of MIPA: “Our logistics network is at a turning point, with more alignment across the country than ever before. By working together, we can achieve significant advancements. It is crucial to continuously foster dialogue, share insights, and raise awareness to build a sustainable supply chain for the future.”

According to Lord, MIPA will aim to expand its membership, encouraging more stakeholders to join and contribute to the conversation.

“The business community plays a vital role in developing and facilitating trade within the logistics and supply chain environment. We will lobby warehousing, transport, and consulting businesses through these channels to join MIPA. We will also seek to include State-Owned Enterprises (SOEs) – as they are significant players nationally and globally – while fostering a close-working environment with the government,” concludes Lord.

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Press Releases

Unitrans launches Centre of Excellence to enhance African supply chain solutions

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Operating cost efficiencies and safety – both driver and vehicle – are primary considerations for any logistics or freight company and Unitrans, a forward-thinking company dedicated to providing value-added supply chain solutions across the continent, moves this to a new level with the launch of its newly upgraded Centre of Excellence (COE).

“The launch of our upgraded COE marks a significant milestone for Unitrans and the industry as a whole,” says Jacques Greeff, Executive of Solutions at Unitrans. “We are thrilled to unveil this state-of-the-art facility that will drive value creation and operational excellence for our clients across Africa.”

The modern supply chain is driven by ‘big data’ with information coming directly from trucks on the road, fleet management systems and other services. The COE collects, analyses this data and provides real-time solutions and information to all relevant departments, as well as to drivers on the road – for example, instant route changes to avoid traffic jams and the like.

By harnessing the power of technology through the COE, Unitrans is able to process large-scale data into actionable business intelligence.

“Our focus is on empowering our clients with real-time insights and predictive analytics that drive informed decision-making and enhance overall operational performance,” remarks Greeff. “Through our centralised platform and data-driven approach, we are unlocking new possibilities for supply chain optimisation and cost efficiency.”

Unitrans is committed to developing bespoke solutions to provide optimal results for its customers. The company’s commitment to excellence extends beyond technology and data analytics. Its team of industry experts brings a wealth of experience and knowledge to the table, ensuring clients receive best-in-class solutions tailored to their specific needs.

“We believe that the future of supply chain management lies in the integration of data-driven insights and advanced technology,” continues Greeff. “Our COE is designed to be a game-changer, offering our clients a competitive edge in a rapidly evolving marketplace.”

Greeff describes the COE as an enabling tool that serves to optimise operations, mitigate risks and enhance safety and security measures – ultimately contributing to the increased efficiencies of our customers’ supply chains. Some of the tangible benefits of the COE include fleet optimisation, reduced standing times and an overall boost in vehicle efficiency.

Whilst none of these concepts are new, the Unitrans COE uniquely balances risk mitigation imperatives and efficiency targets with sustainability objectives.

Predictive analytics

Predictive analytics means leveraging historical and real-time data to forecast future outcomes. By analysing large-scale data sets, businesses can gain valuable insights into patterns, trends and potential risks, allowing them to make informed decisions and mitigate operational challenges effectively.

In the context of a logistics business, predictive analytics can revolutionise risk management practices by identifying potential issues before they escalate, reducing operational risks and improving operational cost efficiency significantly.

Through the continuous analysis of data related to factors such as weather conditions, traffic patterns, equipment maintenance and driver behaviour, transport and logistics companies can proactively address potential problems and optimise their operations for efficiency, safety and sustainability.

“Ultimately, with the integration of advanced predictive analytics tools and large-scale data analysis, it is conceivable the supply chain industry could not only reduce operational risks, but potentially eradicate them altogether,” says Greeff.

This transformative approach has the power to improve the way supply chain businesses operate, ensuring smoother operations, enhanced safety standards, and ultimately, a more sustainable and reliable supply chain ecosystem.

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Press Releases

JC Auditors prompts Easter Road Safety Campaign

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South Africa has historically faced alarming road safety challenges during the Easter holiday period. According to past statistics, road accidents and fatalities tend to spike significantly during this time, highlighting the need for heightened awareness and proactive safety measures. According to Transport Minister Sindisiwe Chikunga, 225 people died on the roads over the four-day Easter 2023 long weekend in 185 fatal crashes.

This is an almost 40% increase on the number of deaths in 2022. According to the Road Traffic Management Corporation (RTMC), the number of fatal crashes increased by 33% between Easter 2022 and 2023, with North West and Northern Cape recording decreases of 57% and 25% respectively in fatal crashes. The highest percentage increase was in the Free State at 125%, followed by Kwa-Zulu Natal at 67%.

As a prompt to the road transport industry, JC Auditors (JCA) are encouraging the road transport sector to consider initiating Easter road safety campaigns in the context of their business operations. The industry is being encouraged to consider simple, innovative ways to keep safe driving at the forefront during this high-risk period. With the holiday season approaching, it is crucial to avoid becoming immune to the messages of road safety campaigns and instead focus on engaging and impactful methods to remind drivers of the importance of safe driving.

“These campaigns need not be formal and big events – although the bigger corporates may opt for this – but a simple safety talk, a few impactful posters, a voice-note to the drivers, a quick reminder by the fleet controller. This can make a difference to at least one life,” says Yashen Naidoo, JC Auditors’ RTMS Lead Auditor.

More than 80% of road accidents are due to driver behavioural issues. Therefore, changing the mindset, attitude, and focus of drivers is crucial in reducing road accidents and fatalities. “From the RTMS audits conducted, we have found that distracted driving, travelling at unsafe speeds, and not maintaining a safe following distance are key contributors to road accidents,” comments Naidoo. “Drivers need to adjust their driving behaviour to suit prevalent road conditions, including high traffic density, road construction sites, wet roads, poor visibility, and damaged roads.”

Certain routes, such as the section of the N3 between Pietermaritzburg and Hammarsdale, pose an extremely high risk to drivers due to narrow lanes with temporary barriers. A minor lane deviation, a moment of distraction, or travelling at an unsafe speed can have catastrophic results. Commercial fleet operators need to raise awareness among their drivers about such high-risk routes and the need for extra caution.

The N3 Toll Route has seen a significant increase in the number of trucks over the past decade, mainly due to the transfer of freight from rail to road. On average, 7 000 trucks move thousands of tons of goods on the N3 every day. Given the high risks, commercial fleet operators need to seriously consider innovative means of raising awareness in our collective efforts to reduce road crashes and fatalities.

As part of the collective effort to stimulate practical road safety initiatives, JC Auditors (JCA) has made a free “Easter Safety Basket” poster available to prompt commercial fleets to start taking steps to promote safe driving. The poster which can be shared with drivers may be downloaded from JC Auditors. “By working together and taking little steps, we must believe that, despite our poor road safety record, we can make a difference!” concludes Naidoo.

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