Draft Freight Logistics Roadmap promised by year-end

Durban Container Terminal Pier 2

Durban Container Terminal Pier 2

28th August 2023

By: Terence Creamer

Creamer Media Editor


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A new ‘Freight Logistics Roadmap’ is currently undergoing an internal government consultative process for publication before the end of the year, the latest Operation Vulindlela progress update confirms.

“The roadmap will incorporate proposals to resolve the immediate operational challenges while developing interventions to fundamentally restructure the logistics sector to support inclusive economic growth,” the update states.

The roadmap is being developed by government and Transnet and a final draft is expected to be concluded in the third quarter of 2023.

Implementation of the roadmap will be overseen by the National Logistics Crisis Committee (NLCC), established by President Cyril Ramaphosa earlier this year to address problems afflicting the sector, including a steep deterioration in rail services and ongoing port inefficiencies.

Operation Vulindlela is overseeing several proposed reforms in the sector, including ones aimed at improving the efficiency of the country’s ports and facilitating third-party access to the freight rail network.

The update acknowledges that reforms in the sector are still facing significant implementation challenges, which require interventions to overcome. However, it does highlight the completion of the selection of an international terminal operator partner for the Durban Pier 2 container terminal, which it argues will crowd in private investment and skills, as well as the establishment of a multistakeholder task team to address congestion at the Durban Port.

The report also indicates that the suite of reforms will be expanded in line with the finalisation of the roadmap and the creation of the NLCC, which was formally instituted in July and comprises representatives from the Presidency, Transnet, the National Treasury and the departments of Transport, Public Enterprises, and Trade, Industry and Competition.

A joint strategic operations committee is also being established between the NLCC and the private sector, with organised business having identified the logistics crisis as one of three areas in which it will provide direct support to government. Similar joint action is also under way in the areas of electricity and crime and corruption.

The NLCC’s objectives have been set as improving the operational performance of freight rail and ports, restructuring Transnet to ensure its future sustainability, and implementing reforms to modernise the freight transport system and restore its efficiency and competitiveness.

The NLCC includes eight workstreams focusing on the following matters:

  • Workstream 1, which is pursuing improvements to the operational performance of the multimodal and bulk freight rail network and port system;
  • Workstream 2, which is focussing on improving road transport operations and border transit;
  • Workstream 3, which is pursuing plans to restore passenger rail services, with a devolution strategy targeted for finalisation by March 2024;  
  • Workstream 4, which is assessing the structural reform of the freight logistics system;
  • Workstream 5, which is focusing on procurement;
  • Workstream 6, which is assessing financing;
  • Workstream 7, which is focusing on security; and
  • Workstream 8, which is prioritising communications.

The urgency of sectoral reform is also reinforced in the update, which describes Transnet’s decline as posing a material risk to the country’s economic prospects, with rail’s underperformance having resulted in losses equivalent to 5.3% of gross domestic product in 2021

“South Africa continues to lose rail market share, with Transnet Freight Rail (TFR) volumes falling short of targeted volumes – where our rail system moves less than 40% of rail-friendly freight tonne-kilometres,” the updates states, adding that port performance is poor by international benchmarks.

“Actions to improve efficiencies, encourage private participation and enable increased competition and investment are required to arrest the sector’s decline.”

During the coming quarter, Operation Vulindlela is flagging that it anticipates progress on the corporatisation of the Transnet National Ports Authority, including through the appointment of a permanent board.

It also expects that TFR will establish an Infrastructure Manager in October to separate infrastructure from freight operations, with accounting separation having been completed.

There is also an expectation that the Economic Regulation of Transport Bill will secure the National Council of Provinces’ concurrence by October.

Edited by Creamer Media Reporter



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