The potential impact of South Africa s current intermodal strategies on national transport costs
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1 The potential impact of South Africa s current intermodal strategies on national transport costs SARF 2014, CSIR Convention Centre, Pretoria 4 September 2014 Nadia Viljoen Growth and Intelligence Network cc
2 shuttle flight Gautrain Gautrain bus walk SARF/IRF
3 (The many faces of intermodalism) SARF 2014, CSIR Convention Centre, Pretoria 4 September 2014 Nadia Viljoen Growth and Intelligence Network cc
4
5 Total logistics costs as a % of total and transportable GDP. Havenga, J.H., and Simpson, Z th State of Logistics survey for South Africa. CSIR. Available:
6 The components of logistics costs
7 Inventory transportation trade off in the USA Wilson, R., (2011), 21 st Annual State of Logistics Report: The Great Freight Recession, Council of Supply Chain Management Professionals, Washington.
8 The impact of fuel inflation on logistics costs
9 Externality costs
10 The motivation The business criteria o Reduced fuel usage, leading to: Reduced overall logistics costs Reduced emissions o Price o Time o Reliability o Reduced congestion on corridors
11 The current picture The (hopeful) future o Insufficient terminal and rail capacity to offer reliable service o Transport costs do not yet offset additional administrative and inventory costs (industry perception!) o Negative perception o Ambitious intermodal terminal development o Ambitious rail intermodal strategy o Organisational change within Transnet
12 What is the alternative? Let everyone stick to their knitting Build another N3 Bigger payloads Aggressive push towards greener truck transport (hybrid vehicles etc) Reduce demand for transport move industries to the coast
13 Building the business case Which freight is appropriate? o o o Long-distance High density corridors High containerisation propensity
14 Export Mining Flows Pit to Port: Iron Ore Pit to Port: Coal Pit to Port: Manganese Pit to Port: Other Mining Exports Domestic Mining Pit to Plant: Iron Ore Pit to Plant: Coal Pit to Plant: Manganese Pit to Plant: Domestic Mining Intermediate Manufacturing Plant to Plant/DC: Long Distance Plant to Plant/DC: Short Distance Finished Palletised Goods DC to DC: Long Distance DC to DC: Short Distance Rural Extraction and Delivery Rural Agricultural: Extraction Rural Agricultural: Manufacturing Delivery Rural Interchanges
15 Export Mining Flows 100% 99% 92% 62% Pit to Port: Iron Ore Pit to Port: Coal Pit to Port: Manganese Pit to Port: Other Mining Exports Domestic Mining 92% 63% 96% 10% Pit to Plant: Iron Ore Pit to Plant: Coal Pit to Plant: Manganese Pit to Plant: Domestic Mining Intermediate Manufacturing Plant to Plant/DC: Long Distance 19% 4% Plant to Plant/DC: Short Distance Finished Palletised Goods DC to DC: Long Distance 2% 1% DC to DC: Short Distance Rural Extraction and Delivery SARF/IRF % 2-4 September, 1% South Africa 4% Rural Agricultural: Extraction Rural Agricultural: Manufacturing Delivery Rural Interchanges
16 Building the business case Total tonnes Total TEUs
17 Building the business case How do you quantify costs? o o o o Transport costs obtainable on a national level Inventory implications obtainable on a company level, confidentiality issues Cost of administration vague No benchmarks available, thus forecasting and what-if analysis difficult
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