Market response to the newly established intermodal terminals in Elandsfontein, Gauteng, and Musina, Limpopo, has been positive; however, industry still perceives the use of rail as a challenge.

Recognising this challenge, the freight rail division of State-owned enterprise Transnet, Transnet Freight Rail (TFR), which supports the establishment of these intermodal terminals developed in conjunction with smart supply chain services and solutions provider Barloworld Logistics (BWL), has ensured that the rail service is well managed and fairly priced.

BWL is focusing on integrating rail transport into intermodal supply chains to meet the logistics needs of the changing South African mining landscape.

As major players in the international mining industry gradually dispose of their investments in South Africa, the number of smaller junior mining operations in the country is rising. BWL Integrated Freight Solutions managing executive Mathys Enslin highlights that these smaller mines present new opportunities for supply chain management companies to enter partnerships to design, implement and operate logistics solutions, and to consolidate parcels to achieve economies of scale.

He notes that uncertainty persists in the local mining sector, as a result of the long-awaited finalisation of the Mining Charter and the Mineral and Petroleum Resources Development Act, with the delay negatively impacting on foreign direct investment and resulting in many larger multinationals considering divestment in the sector.

“This has obviously been exacerbated by the recent downgrades in South Africa’s credit ratings, making large-scale investments in mining operations somewhat challenging. Further, there is increasing community activism in the outlying areas where mining operations are situated, often disrupting the operations.”

In light of these operational disturbances, BWL has increased its focus on migrating cargo from road to rail to improve the efficiency and cost effectiveness of exporting and importing mined materials and related products. Operations at the Elandsfontein Intermodal Terminal (EIT) started in December, while the first trainload of containers was received at the Musina Intermodal Terminal (MIT) in January.

“We strive to remain innovative and responsive to the markets we serve, and the willingness of TFR to engage and offer solutions in the design of the intermodal supply chains bodes well for the road-to-rail migration strategy. Each transport mode plays a distinct role in the mining supply chain and, therefore, it is imperative that appropriately designed, operated and managed intermodal terminals are part of the end-to-end supply chain solutions we offer.”

With its experience in the transport of coal, manganese and chrome, BWL aims to offer intermodal solutions to the mining industry where cargo has traditionally been moved entirely or partly by road. The MIT, in particular, provides an opportunity for the balancing of transport modes, with southbound road deliveries of bulk commodities, such as chrome, copper and mineral sands, from Zimbabwe, Zambia and the Democratic Republic of Congo being transshipped at the MIT into export containers that are railed some 1 000 km to export terminals at the Port of Durban, in KwaZulu-Natal. BWL expects northbound cargos to predominantly comprise grains, fertiliser and mining equipment.

Enslin highlights that bonded areas at the MIT will further present benefits for the mining ventures located in the Musina area wishing to store mining equipment until it is required by the mining operation. The MIT, moreover, has two bonded areas, approved by the South African Revenue Service, for products traversing the border into Zimbabwe.

Commodities handled at the EIT – being transshipped from rail to road or vice versa – include a range of steel products, containerised car parts, chrome sand and machine parts.

“The intermodal solution is cost competitive and produces lower carbon emissions than road transport. In addition, it offers companies the opportunity to claim tax rebates and results in reduced road damage and accidents, expedited border crossing and enhanced driver management, as a result of the shorter road distances travelled.”

BWL is further working to embrace the latest technologies in the movement of containers and in the management of bulk commodities through equipment supplied by the Barloworld group, as well as simulation modelling and on-site operating process redesign to improve efficiency and reduce costs.

The company is also investigating disruptive technologies to improve the reach and efficiency of the intermodal supply chains.

“In end-to-end supply chain solutions, it is critical that the interfaces between modes are enhanced, allowing for the most effective use of assets and resources. We continue to constructively engage with the supplier of a bimodal technology to interrogate the benefits of this transport mode and partner with them in designing applications and solutions for the markets we serve.”

This technology has been approved by TFR for pilot operations on its networks, starting on the Cape Corridor later this year.