Road and rail seeking synergy

13 October 2013 - 02:02 By Paul Ash
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DRIVING THE ECONOMY: South Africa's rail network is one of the longest in the world
DRIVING THE ECONOMY: South Africa's rail network is one of the longest in the world
Image: Business Times

Last week's handshake between Transnet Freight Rail and giant road haulier Imperial Logistics to look at ways of combining road and rail freight is long overdue.

South Africa has 21000km of railways - one of the single biggest networks in the world - yet the local freight business is dominated by trucks.

The reasons are simple. Not much new track has been built since the railway construction boom peaked in the 1920s - the heavy-haul ore and coal lines being notable exceptions. But the road network expanded rapidly after World War 2 to the point where South Africa now has about 746000km of roads.

Unless their customers have ribbons of steel running through the front gate, railways are also lousy at door-to-door service.

Once the protective hand of government is removed - as it was in South Africa when trucking was deregulated in the 1980s - rail's inability to carry its customers freight the "last mile" will drive them into the waiting arms of the road hauliers.

Rail operators can, in fact, offer a last-mile solution, as US railways have shown. Intermodal traffic - containers or trucks on flat cars, or truck trailers that can run on both road and rail - is one of the pillars of the US railroad industry, and it is this business that Imperial and Transnet hope to unlock.

That intermodal traffic has not taken off in South Africa has more to do with politics than economics.

The South African Railways dominated local freight for much of the 20th century. A network of private sidings that served businesses and grain silos and factories in all the country's industrial areas guaranteed some form of door-to-door service. The gaps were filled by short-haul trucks, a large fleet of which was operated by the railway itself.

Yet despite government protection - or more likely because of it - the railways struggled to be an efficient transporter. Trains ambled across the land, moving from one junction to the next, taking days to do journeys that trucks now do in hours. Wagons stood idle in marshalling yards, waiting to be hooked up and shunted off to often frustrated customers.

Shipping containers, having sailed thousands of miles of ocean in a matter of weeks, would then crawl slowly across the country to inland depots - such as the vast terminal at City Deep - only to sit there undelivered, sometimes for months.

Many customers were told the same story: "Yes, your container is here. No, our trucks are busy. Perhaps you should hire a truck and come fetch it yourself?" The "Ess-Ay-Aar" became an expensive national joke and, many believed, a provider of sheltered employment.

Its technology and engineering were world-class, even on its narrow gauge - the network is built to the so-called Cape gauge of 1067mm, whereas the standard gauge in Europe and the US is 1435mm. South African railway engineers proved that the narrow gauge is no handicap, as the 40000-ton ore trains from Sishen to Saldanha show.

But it is not much good having a technically excellent railway when your customers - at least those who were left by the early 1990s - loathe you.

Unburdened by politics or the need to provide jobs for voters, and enjoying the considerable advantage of havingtheir infrastructure built and maintained by the state, truckers soaked up the business that the railways could not or would not carry.

Single wagon-load traffic - a standard railway boxcar is roughly the same size as a 12m container, or a standard truck trailer - fled to road. Even bulk commodities such as coal, ore and grain, which are most efficiently hauled in long unit trains, have been seen in ever-increasing amounts on South Africa's highways.

The most visible effect of this shift is apparent to anyone taking a drive to the country. The roads in much of the platteland are in appalling condition, hammered by some of the heaviest trucks in the world. Meteor-sized potholes wait to swallow the unwary motorist.

Some roads, such as the once beautiful one between Harrismith and Bergville, have almost returned to the earth. With the road maintenance backlog now roughly R150-billion in arrears, there is little chance of it being fixed.

As the road network crumbles, the rural economy suffers. Anecdotal evidence suggests that some hauliers are reluctant to let their trucks travel on some of South Africa's roads.

Whatever deal that Transnet and Imperial then manage to thrash out should be good for them and for the rest of us.

The rail system, boosted by the global commodity boom, is in the middle of an upgrade that is unprecedented in its scope and funding. Transnet plans to spend R307.5-billion by the end of the decade. New locomotives and wagons are rolling out of the workshops and the company's aim to be the world's fifth-biggest railway by 2019 is no pipe dream.

Whether it manages to recapture the traffic that it lost to road remains to be seen. The point is that some truckers and railwaymen are talking about using each other's strengths to do business together.

They may be late to the party, but it is a start.

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