ENDORSED BY
Intraregional supply chain solutions from producer to consumer
Volvo Trucks’ brake specialist, Mats Sabelström
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expands into Mozambique
Commercial vehicles e-Toll impact and VAT
Operations
Fleet management
Logistics
Northern Corridor
“While the growth potential in Africa is huge, so are the pitfalls.” Dr Iain Barton of Imperial Health Sciences P10
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Editor’s Comment Be prepared FESARTA TradeMark Southern Africa closing Regional news Hot Seat Unlocking Africa’s vast pharmaceutical potential
2 5 8 10
COMMERCIAL VEHICLES 13 19 20 21 23 25
Fleet Operations – Making a profit Inkwazi Video Tracking Impact of VAT and e-tolls 2014 and the MCV Man Truck & Bus Service centre launched Iveco – Travelling 25 times around the world
13
20
25
29
26 Northern corridor 28 Insurance: Local goods, local risks, local regulations 32 Customs: East Africa sees accelerated regional integration 33 Transport infrastructure the key to Africa’s growth 35 Quality lubricants lower operational costs 36 Non-tariff barriers to trade 38 Warehouse optimisation 40 Customer up-time increases profitability 41 The greenest export flight – the A380 43 Airfreight markets make a strong start to year 44 SAAFF names top young forwarder
44
TWA | Mar/Apr 2014
1
EDITOR’S COMMENT
Be prepared T
HE THREAT of rolling blackouts due to load-shedding is sending shivers down the spines of businessmen. While no one wants a repeat of the load-shedding of 2008, the threat of it happening again should have you looking at your supply chain planning. According to the president of SAPICS, Cobus Rossouw, the latest wave of load-shedding emphasises the need for education in planning skills SAPICS trains supply chain professionals in the science of demand and inventory management which, when correctly applied, can assist organisations to minimise the impact of any future load-shedding activities. One particular event hosted by SAPICS is its forecasting workshop where participants work through practical examples in an effort to hone their forecasting skills, effectively helping companies to transition themselves form ‘guessing’ to ‘knowing’. “The more you improve your forecasting process and your general skill in this regard, the ‘luckier’ you will get,” states Rossouw. In this issue of Transport World Africa, we speak to key industry experts in the field of fleet management and driver monitoring technology. We all know that curbing operating costs is crucial for every transport operator. We also look at the impact of e-tolls on the transport operator and how the issue of claiming back VAT on tolls is affecting the trade. We highlight the current non-tariff barriers affecting the movement of freight through Africa and also look at the North Corridor and what has been happening along that corridor to ensure an easier movement of road freight in that region. We look at the African transport insurance industry, as well as how a new single customs territory is revolutionising the way goods are exported and imported into East Africa. As always, a varied read. Enjoy!
Editor in action
2
TWA | Mar/Apr 2014
Publisher Elizabeth Shorten Editor Simon Foulds • simon@3smedia.co.za Head of design Frédérick Danton Senior designer Hayley Mendelow Designer Kirsty Galloway Contributors Raymond Abraham, Abbas Jamie, Barney Curtis, Hester Hopkins, Chief sub-editor Claire Nozaïc Sub-editor Beatrix Knopjes Client services & production manager Antois-Leigh Botma Production coordinator Jacqueline Modise Marketing manager Hestelle Robinson Digital manager Esther Louw Distribution manager Nomsa Masina Distribution coordinator Asha Pursotham Financial manager Andrew Lobban Administrator Tonya Hebenton Printers United Litho JHB • t +27 (0)11 402 0571 Advertising sales Hanlie Fintelman • h.fintelman@lantic.net t +27 (0)12 543 2564
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FESARTA COMMENT
By Barney Curtis, chief executive officer, FESARTA
TradeMark Southern Africa closing Most stakeholders working in the cross-border road transport arena will know that the UK donor agency, the Department for International Development, has ceased funding to TradeMark Southern Africa (TMSA). This means TMSA will have closed on 17 March.
T
HE PRECISE REASONS are not clear, but in the final analysis, it seems to be political – i.e. the department is showing the British electorate that it is not using the taxpayers’ money to fund projects overseas. This seriously compromises the progress made in improving transport efficiency in Southern Africa. In view of its concern, FESARTA sent a letter to the Secretary of State in the UK Department, the Rt Hon Justine Greening.
Cessation of Funding to Trademark Southern Africa FESARTA requests that you review your decision to cease funding to TradeMark Southern Africa (TMSA). It is now common knowledge in Southern Africa that this funding has ceased and there is uncertainty as to how the current COMESA/EAC/SADC Tripartite programme and projects will proceed. And, from what FESARTA understands, the decision taken by yourself will have a major detrimental effect. FESARTA has worked with TMSA over the past eight years and has been very impressed with progress that it has made. FESARTA also works closely with TradeMark East Africa (TMEA). Prior to TMSA being established, the creation, finalisation and implementation of projects in our region was somewhat haphazard, to say the least. With the advent of TMSA, there was a definite purpose to trade facilitation and infrastructure upgrading. However, for TMSA to get good proposals for such projects was not easy. Hence, the Project Preparation and Implementation Unit at the COMESA/EAC/SADC Tripartite alliance was established and has proved to be of considerable value. The Non-Tariff Barrier (NTB) system is a good example of project implementation. It has not always been easy to resolve the NTBs, but, with the determination of and the cooperation between FESARTA and the NTB management, good progress has definitely been made. More than 50% of the NTBs have been resolved. Mark Pearson has been a hard taskmaster, but I respect him for that. He has always wanted tangible results and has not been prepared to put up with second-rate interventions. TMSA has only been able to make good progress when the relevant government and regional politicians have “bought
in” to the objectives. Too often, progress has been severely restricted because politicians either do not buy in, or they agree to a project and then do nothing about it. Those of us who have been in this game for many years know that any interventions to improve the situation are always faced with resistance from politicians who resist change. They have a view on a particular regulation or procedure and do not wishing to relinquish what they believe is their control over it. They don’t see the “bigger picture” for the region – only their own small sphere of influence. And they do have to keep their positions in government. I feel that the wind has been taken out of the sails of the momentum that has been created by TMSA. Much of what has been embarked on has either produced good results or is about to do so. We are seeing roads being upgraded, borders being critically assessed, non-tariff barriers being addressed, etc. I am sure that if TMSA were to continue in its current form, an increasing number of successes would be realised. I know how long it takes to convince an authority to agree to accept a project and, more importantly, the outcomes of a project. Does it mean that all of this comes to a halt and we have to start all over again? I hope not. Whatever the way forward is, FESARTA would like to see East and Southern Africa coming closer together. Transporters are now operating from Malawi to Uganda and from Gauteng to Nairobi. They are seeing the opportunities are widening their spheres of operation.
This seriously compromises the progress made in improving transport efficiency in Southern Africa
Transporters in Africa
TWA | Mar/Apr 2014
5
COVER STORY
Expanding footprint Scania Southern Africa’s service network has always held an impressive footprint throughout sub-Sahara Africa, from the southern point nt of Cape Town stretching right up north into Tanzania, with the single intent of providing customer support no matter where it operates.
D
URING 2013, Scania’s global head office in Sweden placed a great deal of research and focus into creating a presence within Mozambique, and it is with with great delight and enthusiasm that Scania Southern Africa proudly announce the establishment of a wholly owned subsidiary based in Beira. The dealership, which is also the regional head office, is still within construction stages and aims to be completed later this year. Scania’s enthusiastic motivation for the venture derives from the Maputo Corridor, a major trade corridor connecting the South African provinces Gauteng, Limpopo and Mpumalanga with Mozambique’s port and capital city. The venture provides additional network support in an entire eastern region Daniel Henriksson, managing director which has been absent to customScania Moçambique ers and their operations – until now. Scania Moçambique has long-term strategic plans to position future workshop facilities conveniently throughout the country, which will allow for a stronger support network and an increase in commercial uptime to both local and cross-border customers. The appointment of Scania Moçambique’s managing director, Daniel Henriksson, took place in October 2013; his history not only ranges within the Scania organisation, but within Mozambique as well. Daniel has been a part of the Scania family for the past 27 years, holding various positions within the different business units, following in his father’s footsteps all the way to Beira. During the 1980s, Scania’s representation within Mozambique was both LEAV IN G A L E G A CY through a wholly Scaniaowned dealership and later Scania is taking over a technical school in Tete, which was built by the old Soviet Union in the on through a privately owned 1980s, and is going to renovate it in conjunction subsidiary – in both cases with Unido (a specialised agency of the United with Henriksson’s father Björn Nations that promotes industrial development Carlsson as head of Service for poverty reduction, inclusive globalisation Operations. Complementing and environmental sustainability) and Sweda (a government organisation under the Swedish his heritage string, Henriksson Foreign Ministry that administers approximately is also fluent in Portuguese, half of Sweden's budget for development aid). an essential aptitude for sucScania wants to leave a legacy of being at the cessful business operation forefront of training technicians in Mozambique in Mozambique. for the benefit of the country.
“More ‘dots on the map’ means better business for our customers.”
6
TWA | Mar/Apr 2014
COVER STORY
“We know there is great potential in Africa; through our complete business solutions approach we can make a difference for customers in strengthening and expanding their businesses,” states Henriksson with clear confidence. “We know that key to our customers’ prosperity prosp is uptime – the trucks and buses have to be available for fo transporting goods or passengers as much as possible. This T is where our customers’ revenue comes from. A vehicle is not earning money standing still, still so when it is in need of maintenance m or repair we need to be close by and able to quickly qu put that vehicle out on the road again earning money. More M ‘dots on the map’ means better business for our customers.” custome Scania’s business strategy began wit with the construction of the Beira facility rolling into Henriksson’s Henriksson formation of local customer custom cus tomer er relations relati rel ations ons and and overall o awareness awarene within the gradual country. The initial inititial al staff sta aff complement complement l will wi begin with 10 local employment positions, s followed follo fo llowed wed by an increase as the organisation grows and matures. maturess. Scania Sca Moçambique will fall under under Scania South Africa, Afr f ica, the the Southern So Africa regional head he d office,, as does hea d es the already do a ready existing al ex Scania-owned network, networ net ork, k namely namely Botswana, Bo otswana,, Namibia Namib Nami b and Tanzania. Scania’s global al focus focus has has shifted shifte shif te from being a product u manufacturer manuf ma n acturer into into n a provider provid pro vide of complete transport port solutions, solutitions, offering offer of fering erin ing its it customers cu an ensured resolution to o future futu uture e profitability p fitabilit pro lity ity and business expansion, sio si on, while confirming con nfir f min ming g that that ha there t err is a better way. th
Scania Moçambique S.A. TWA offers advertisers an ideal platform to ensure maximum exposure of their brand. Companies are afforded the opportunity of publishing a two-page cover story and a cover picture to promote their products to an appropriate audience. Please call Hanlie Fintelman on +27(0)12 463 2564 or e-mail her at h.fintelman@lantic.net to secure your booking.
TWA | Mar/Apr 2014
7
REGIONAL NEWS
Read more on www.transportworldafrica.co.za
SOUTH AFRICA
AU
Customs Bills to be passed before May election
Africa committed to tackling intra-Africa trade bottlenecks
ACCORDING TO THE ANC there are 43 Bills that parliament has to pass before the elections in May. The ruling party has identified eight bills which they believe parliament should give special attention to and ensure they are passed into nto law. Three of these prioritised bills are the Customs Control Bill, 2013; the Customs Duty Bill, 2013; and the Customs and Excise Amendment Bill, 2013. The Customs Duty Bill aims to provide for the imposition, assessment, payment and recovery of customs duties on goods imported into or exported from the Republic of South Africa; and for matters incidental thereto. The Customs and Excise Amendment Bill aims to amend the Customs and Excise Act, 1964, so as to delete all provisions superseded by general provisions of the Customs Control Act applicable to all tax levying Acts; to delete all provisions relating to the customs control of imported goods and goods to be exported; to delete all provisions relating to the imposition, collection and refunding of customs duties and other matters relating to customs duties; to limit the remaining provisions of the Act to excise duties, fuel levies, Road Accident Fund levies, environmental levies, air passenger taxes and matters relating to such duties, levies and taxes; and to change the name of the Act to the Excise Duty Act, 1964; and to provide for matters connected therewith. The Customs Control Bill aims to provide for customs control of all vessels, aircraft, trains, vehicles, goods and persons entering or leaving the Republic of South Africa; to facilitate the implementation of certain laws levying taxes on goods and of other legislation applicable to such goods and persons; and for matters incidental thereto. (Source: Duty Bound)
AFRICAN HEADS OF infrastructure bottlenecks to enable intra-Africa investment to happen in a bid to boost the continent’s growth. President Jacob Zuma said in a recent statement that this commitment was made at the African Union Summit, which took place in Ethiopia at the beginning of February. Zuma said: “While intraAfrican investment has been growing since 2007, at more
TWA | Mar/Apr 2014
“In addition to a focus on
than 32%, a lack of access to
trade-enabling infrastructure, we
trade-enabling infrastructure
are intensifying our continental
on the continent remained a
integration efforts through the
fundamental challenge.
negotiation of the Tripartite Free
“We discussed this matter at length again at the African
Trade Agreement. “We have made considerable
Union summit in Ethiopia [in
progress in the negotiations,
February]. We recommitted
which aim to integrate 26 coun-
ourselves as African heads of
tries of Eastern and Southern
state to continue building cross-
Africa. This involves a population
border infrastructure, to unlock
of nearly 600 million people and
growth and development in
a combined GDP of US$1 tril-
our continent.
lion.” (Source: SAnews.gov.za)
SOUTH AFRICA
Possible automotive supplier park in KZN IN ORDER TO STRENGTHEN the automotive industry in KwaZulu-Natal, the provincial government is considering establishing an automotive supplier park. Speaking at the launch of the new Toyota Corolla at the vehicle manufacturer’s plant in Durban, KwaZulu-Natal Premier Senzo Mchunu said: “The provincial government is exploring the possibility of establishing an automotive supplier park a few kilometres away from Toyota Plant – at the back of the proposed dug-out port in the
8
Jacob Zuma
STATE have prioritised tackling
old Durban International Airport.” Even though statistics show that new vehicle sales had started the year on a weak note, the province believes that it has an important role to play in ensuring the growth of the automotive industry. In 2012, the provincial government started negotiations with Toyota management in Japan asking the vehicle manufacturer to help it convince automobile suppliers to consider setting up their plants in the proposed park. (Source: SAnews.gov.za)
REGIONAL NEWS SOUTH AFRICA
Bilateral investment treaties for SA SOUTH AFRICA is not averse to bilateral investment treaties says Dr Rob Davies, minister of trade and industry. “If there is a compelling economic or political reason why we need another bilateral investment treaty, we will consider it. But we will do so most likely within an alternative framework, which even Rob Davies
MOZAMBIQUE
Mozambique plans to extend dry docks
the Europeans are talking about. “The process of reviewing bilateral investment treaties was not peculiar to South Africa, as many countries in the world are conducting reviews,” says Davies. “We have found that there is no correlation between the existence or non-existence of bilateral investment treaties and the flow of direct foreign investment. There are countries with whom we have bilateral treaties, but almost no investment. Conversely, there are countries we have no bilateral treaties with such as Japan, the US and India, but we have a significant flow of investment from those countries. Our investment sources are diversified. “The South African government has taken the route of a law of general application that will apply to all foreign investments.”
TMSA programme to close early ON 4 DECEMBER 2013, the UK’s Secretary of State for International Development (DFID) announced the early closure of the TradeMark Southern Africa (TMSA) programme. As TMSA understands, this decision has been informed by a year-long process
MOZAMBIQUE
Port of Nacala to be renovated
WORK ON THE first phase of renovation at the Port of Nacala in Mozambique’s Nampula Province will begin during March. The US$24.8 million (R274.7 million) contract was awarded to the Japanese company Penta-Ocean Construction Co following a tender process in Japan under a cooperation agreement with Mozambique. Renovations at the port include paving the current general cargo terminal, repairing the concrete structure of the northern dock, and reinforcing the pillars and the surface of the northern dock area. The contract also provides for the modernisation of the current liquid fuel terminal and installation of a fire fighting system, as well as acquiring port handling equipment such as industrial forklifts and container gantry cranes. (Source: macauhub)
Tripartite. TMSA has played a
initiated by a partnership between
part in negotiating a 26-country
pharmaceutical manufacturer
Free Trade Agreement, in revolu-
Adcock Ingram, Swedish truck
tionising and implementing trade
manufacturer Scania, Swedish
facilitation measures that reduce
Workplace HIV/AIDS Programme
the cost of cross-border trade, and
(SWHAP) and Shell Ulra City One
in project preparation of a large
Stop petrol stations.
number of infrastructure projects,
on South Africa’s roads, the cam-
ment of Tripartite region, to a
paign’s objective was to enhance
bankable stage.
the health of truck drivers through HIV/AIDS, cholesterol, glucose,
of DFID reviews and evaluations, THE MOZAMBICAN government
including a recent review by the
sees the extending the number of
UK’s Independent Commission for
dry docks at its sea ports as an
Aid Impact, released in December
important step for the country to
last year.
increase its competitiveness and be
The Secretary of State’s written
a key economic player in the region.
statement to the UK parliament
Gabriel Muthisse, Mozambican
on TMSA’s early closure, and the
Due to the high accident rates
vital to the economic develop-
SOUTH AFRICA
Road safety and HIV awareness for truckers TWO OF South Africa’s key
blood pressure and BMI testing. The initiative was rolled out at Shell Petrol Stations in Midrand, Bloemfontein, Middelburg, Polokwane and Harrismith on select days in December. The campaign had the assis-
Minister for Transport and Com-
reasons she gave for this decision,
challenges – road safety and HIV
tance of the national traffic police,
munications, says: “The users of
can be accessed online. The pro-
awareness – have been united
who helped stop truck drivers and
our ports complain of long waiting
cess of how TMSA will be closed
under a single initiative to improve
directed them to testing stations
periods for goods to be unloaded
is not yet clear, but TMSA staff are
the health of those tasked with
at the Shell garages where they re-
because of a lack of space at the
fully committed to cooperating
driving long hours on the road
ceived information about safety is-
ports. A lack of dry docks has fur-
with DFID and the regional organi-
and who typically have limited
sues. Participating petrol stations
ther led to congestion with shipping
sations of COMESA, EAC and SADC
access to healthcare facilities
were clearly identified with bright
operators waiting for long periods
to ensure that, as much as pos-
and treatment.
red telescopic banners encourag-
to load and unload their ships.”
sible, this early closure of TMSA
During the month of December
ing drivers to ‘Put the Brakes on
does not disrupt or derail the
2013, a road safety and wellness
HIV’, ‘Stop and Take the Test’,
two dry docks in the ports of Beira
impressive progress that has been
campaign designed to help truck
‘Do it for a Day. Do it for Life’ and
and Nacala. (Source: macauhub)
made by the COMESA-EAC-SADC
drivers improve their health was
‘Adcock Ingram Rethink HIV’.
Mozambique currently has just
TWA | Mar/Apr 2014
9
HOT SEAT
Unlocking Africa’s vast
Imperial Health Sciences is Africa’s leading partner in healthcare supply chain
Annual global spending on medicines will reach US$1.2 trillion by 2016. But while the growth potential in Africa is huge, so are the pitfalls, cautions Dr Iain Barton of Imperial Health Sciences.
T
HE EMERGING markets in Africa offer significant growth potential for pharmaceutical brand owners as it is expected that developed markets will only account for 57% of total spend. Barton, managing director of Imperial Health Sciences, stresses that partnering with the right supply chain partner is critical for companies aiming to unlock the African pharmaceutical sector’s vast promise. “Africa’s fractured and complex geographies and trends provide as many opportunities for failure as for success,” he states. “In responding to the potential of Africa, there is an immediate need for a structured approach which recognises the challenges and dangers, provides a flexibility and responsiveness of supply and yet achieves a cost-conscious efficiency that maximises sales in price sensitive markets. There is an intermediate need to define a supply model that is future proofed for Dr Iain Barton, Managing Director at the developing economic and Imperial Health Sciences
Africa’s fractured and complex geographies and trends provide as many opportunities for failure as for success
10
TWA | Mar/Apr 2014
customs unions, and there is a long-term need for channel and partner development that meets global best practice standards for quality, security and sustainability.” Imperial Health Sciences, member company of Imperial Logistics, specialises in multichannel solutions for delivering essential medicines and consumer health products in South Africa and to Namibia, Botswana, Mozambique, Zimbabwe, Zambia, Kenya, Tanzania, Malawi, Uganda, Ethiopia, Rwanda, Ghana, Ivory Coast and Nigeria.
Understanding the challenges Barton explains that hurdles in the medicinal “route to market” exist at every stage in the process and differ between public and private sectors and between countries. Expanding on these obstacles, he says: “Regulations for registering drugs vary significantly throughout Africa, are time consuming, and are often obscure and open to corruption. Non-transparent tendering and procurement processes, the absence of pricing regulations, limited insured patient volumes and the lack of tiered pricing levels impose access limitations. Commercial challenges include fragmented wholesaler and distributor channels, expensive credit and variable quality standards.” He adds: “Sales are hindered by limited knowledge among physicians regarding
HOT SEAT
pharmaceutical potential disease states and medicine needs. Insufficient numbers of pharmacies and clinics, and limited business experience among staff and owners also inhibit change. Governments have limited means of monitoring use and treatment guidelines are not established for many conditions. In distribution, key challenges are inadequate regulatory oversight, which risks the entry of substandard and counterfeit medicines, as well as weak infrastructure in ordering, transport and the cold chain.”
Overcoming the obstacles The cold chain is an area in which Imperial Health Sciences has taken a leading role, with the development of a cold chain solution that is suitable for use in extreme case delivery routes, like those in Africa. Conducting more than 134 studies over a two-year period, the company accumulated data that contributed directly to the development of a cold chain solution and packaging configuration that is validated in line with global client and regulatory guidelines and requirements. “Imperial Health Sciences’ approach to cold chain validation allows for a cold chain solution suited to African delivery lanes, thereby reducing cost and allowing for the sustainable supply of quality medicine at an affordable cost point to the patient,” Barton states. Imperial Health Sciences was also a founding member of the South African Cold Chain Forum, where industry leaders meet and share experiences and knowledge with the industry in an effort to create a South African industry standard for a cold chain that is recognised globally.
phase and trigger points that must be achieved before moving to the next stage. To achieve efficiency of supply, Imperial creates scale where none exists through clustering of products and markets, and consolidation of lanes and regional stock holdings. Collaboration creates symbiotic market growth.” He adds that flexibility and responsiveness are imperative in supporting market and brand development.
Developing a competitive edge Through the recent acquisition of MDS – a wholly owned subsidiary of UAC of Nigeria – Imperial Health Sciences is further enhancing its service offering to its pharmaceutical clients. Acquiring a 49% interest in MDS, a leading logistics provider in Nigeria, strengthened the group’s African footprint and provided it with warehousing and distribution solutions through a network of 50 distribution centres in over 600 cities and villages across Nigeria. He explains that through this acquisition, Imperial Health Sciences can now offer its pharmaceutical clients the huge competitive advantage of an end-to-end capability that encompasses warehousing, logistics, distribution and brand building in this high-growth industry and region. Imperial Health Sciences’ head office is in Centurion, Gauteng, where the company’s main warehouse and distribution centre is also located. Measuring 26 500 m2, it can accommodate 22 500 pallets, with cold room storage for 1 100 pallets. The company’s new Cape Town facility features 8 096 pallet locations, 8 184 fine pick locations and 504 pallet locations in the cold room. Imperial Health Sciences is ISO 9001:2008 certified for the receipt, storage and distribution of pharmaceuticals and other healthcare products.
Flexibility and responsiveness are imperative in supporting market and brand development
Model for Success With almost a decade of learning, Imperial Health Sciences has developed a matrix model that provides clients with a framework for developing their strategy for the dynamic markets of Africa. Barton elaborates: “We have designed a methodology to assist pharmaceutical clients to deploy marketappropriate supply and trading models that allow them to exploit the opportunities of Africa. This model looks at three specifics: the geographies to be targeted, the commercial models to be deployed and the timing issues of prioritisation and evolution of the commercial model over time. “Understanding that markets move at varying speeds of regulatory and commercial development requires a timeand-milestone based approach, with strategies for each
ABOVE We provide warehousing and distribution services for over 30 international and South African manufacturers, delivering to more than six thousand hospitals, clinics, pharmacies, doctors, wholesalers and health stores LEFT Imperial Health Sciences Central Distribution Centre and National Administration Centre are based in Centurion and Cape Town, South Africa
TWA | Mar/Apr 2014
11
CAN YOU HANDLE MORE THAN YOUR VEHICLE?
HEAVY TRAFFIC
TRUCK ON FIRE
Manoeuvring a heavy truck combination or passenger bus in or around daily traffic
Follow the required procedures to ensure vehicle safety
ROAD WORKS
ROAD HAZARDS
Complying to construction road signs and vigilant in machinery and workers
Always alert in surrounding vehicle and road hazards
SIGN UP NOW IF YOU’RE AS GOOD AT SHARP TURNS IN REVERSE AS FINDING YOUR WAY WITH A BROKEN GPS. Entries open 1st April 2014, visit www.scania.co.za for more details
FLEET OPERATIONS
Making a profit
Managing rising operating costs efficiently is a fine art and as costs increase, managing your vehicles and drivers effectively is the difference between companies surviving or making a profit. Simon Foulds finds out how operators can manage their fleets and drivers more efficiently. What trends can fleet managers expect?
Hein Jordt, MD of Ctrack Fleet Management HJ As costs increase all over, the driver of a vehicle plays an ever-bigger role in building or breaking a transport operation. Considering the improvements in truck technology, vehicles are easier and safer to drive, more fuel efficient and more reliable, but the person behind the wheel has the ability to cancel out all these benefits. This is why more and more fleet management technologies focus on providing the transporters with insight into their drivers’ driving behaviour. How the vehicle is driven has a direct correlation to the fuel consumption, accidents,
maintenance and down time. It remains critical for fleet operators not only to know where, how and when vehicles are being operated, but by who. Even more so with the long discussed and awaited AARTO system, which will force companies to prove who was driving a vehicle. There are proven technologies to identify drivers, but most of these solutions do come with a fairly intensive management process because drivers swop keys, loose or forget these keys. Therefore daily confirmation that each driver does have his allocated driver key is critical. Newer technology such as RFID and biometric driver identification has also been introduced to the market and, as with Dallas iButtons, RFID tags have similar management challenges. Although biometrics does sound like a fairly robust and foolproof solution, it also has its unique challenges to ensure the
correct driver database is on the vehicle’s tracking device and that when vehicles are scheduled for servicing or repairs at third-party facilities such as dealerships, the vehicle can be started without being immobilised. This does place great importance on the operational movement of vehicles and operations. Immobilising vehicles to enforce the use of a form of driver identification has become a trend because it forces drivers to use their identification method and ensures all movement is recorded against the correct person, thus allowing transport operators to know where, when, how and by who their vehicles were used. Programming vehicles with unique categories and correlating their driver identification keys with the same or even multiple categories (depending on their license and operating qualifications) will ensure that only authorised people have access
to specified vehicles. This is a key safety requirement in all mining operations. It has also become a requirement to control when vehicles can be used by implementing selective time immobilisation, i.e. if you have a valid driver identification key or biometric code – and even if you are allowed to drive or operate a specific category of vehicle – you can only do so in the specified operating time, thus preventing unauthorised use of vehicles during specified times.
David Slotow, MD of Trackmatic DS In our opinion, the latest trends are focusing on reducing costs and better managing drivers based on performance incentives rather than disciplinary actions on the use and management of the actual asset, namely the vehicle. Firstly, in terms of cost reduction, this is focused largely on driving down
TWA | Mar/Apr 2014
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DRIVER CAMERA SYSTEMS:
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FLEET OPERATIONS fuel and labour costs, which are undoubtedly the biggest cost components to operating a fleet. Using the historical analogy of the carrot and the stick, traditional track and trace systems have restricted customers and fleet operators to using only the stick. This is largely as a result of their strong focus on hardware in the vehicle and the limited focus on how the driver operates the vehicle, i.e. green band driving, harsh braking, idling, etc. We feel strongly that software is more dynamic and can be customised more specifically for client and operation requirements, making it easier to incentivise drivers on performance, such as delivering on time, getting out of the yard early and on time, returning before deadline, etc. These measures shift the focus to using the carrot, which aligns the driver with business KPIs.
Louis Swart, MD of Drive Report LS “The ever-changing economic environment has created a demand for efficient fleet management and the increasing use of analytics and advanced transportation control systems. The current trend is a demand for system integrations, such as telematics and driver monitoring, minimising the various problems associated with fleet management. These applications derived from technology that benefits the fleet owner and protects the driver greatly, and more innovations are expected in the years to come. Steven Sutherland, sales director for South Africa and Africa at Mix telematics SS There is a visible trend of fleet operators implementing a
solution that offers minimal cost expenditure. The perception that ‘cost is all that matters’ when it comes to fleet technology shows how some operators are losing sight of the bigger picture and the delivery of true value. A fleet management solution that is a short-term fix won’t have the mechanics to evolve with the business. The outlook, then, limits productivity and sustainability. What may appear to be a concrete solution for a reasonable price often excludes key telematics tools such as essential customer care and consulting services. Contract duration warranties and bundled on-site service and support are also true enablers of an effective end-toend fleet management system.
Greg Vercellotti, executive director of Dariel Solutions GV Technology is shaping the future of many industries and the fleet management sector is no different. Best practice software can provide for an integrated management system for the industry and, as such, it is essential that such companies keep abreast of the latest technology as it drives productivity. And while the introduction of new technology can be disruptive in the beginning, it also has the ability to drive productivity and efficiency in a company and reduce operational costs in the long term. It’s about sustainability and future viability. Making the decision of when and how to go about implementing the required technology and equipment needed is a complex process involving both business and technical insight, but one that needs to be done. Investing in the right technology is one of the most critical aspects to any viable business. For businesses operating in such a lucrative and important sector, surely it’s worth it?
What advice can you give regarding fleet management systems? HJ I believe that the key for fleet owners and transport operators when selecting a fleet management solution is to know exactly what your operating challenges are and what outcome you expect to ensure you have control and keep control. Most fleet owners and transport operators have the same management areas, which can be categorised into safety, security, driving behaviour management, productivity and utilisation, operational control and asset management. All fleet and transport operations face all these management challenges, but some owners and operators have more focus in one area or another. I believe that you must identify your key focus areas and select a fleet management solution that can accurately and effectively provide the information and insight you require to assist you with making business decisions on how to change and improve your fleet or transport operation. Driving behaviour must be a critical management area because it has a direct impact on costs such as fuel, repairs and maintenance, accidents and productivity. The driver decides to drive in a particular way and also which route he is going to take, how long he is going to load or off-load, or where he is going to stop to eat, rest or sleep, and his actions can create possible safety/security risks that can impact on productivity and load schedules. It is critical that the fleet management systems must be able to provide accurate, reliable and proven driver identification technology. DS A traditional limited track and trace solution will no longer give fleet owners and operators sufficient insight into the efficient operation of their fleet. It no longer helps to know where my vehicle is or where it has been, but rather where it is RELATIVE to where
it should be. Management systems also need to function as a consolidated repository of all fleet-related information. LS A needs analysis is the best way to get out of the starting blocks, and will aid in selecting the “Best of Breed”. Being obligated to provide an efficient and risk-free fleet management, a robust fleet management system plays a vital role in successful adoption, implementation and ease of integration with existing systems. A critical question to ask is about future-proofing and the impact on current equipment including pricing structures and packages for future development. SS Those successfully managing their fleet are not complacent. They’re identifying weak areas and changing things to bring about improved performance. In the case of driver behaviour monitoring, targeted driver training and incentive programmes are implemented on the back of knowing with accuracy where attention is required. Their drivers have bought into the solution – in fact, they realise they are supported by it. GV Managing the transportation in this industry is not only fundamental to maintaining a competitive advantage, but also to increasing profitability, reducing fraudulent activity and with the goods sometimes being on the road for days, essential to ensure that it is managed correctly from a supply and demand perspective as well. It is critical then that relevant considerations are made for businesses that have to juggle such concerns and one way of doing this is to turn to technology. Examining a software solution that is configured based on best industry practice and implemented into a goods receiving and delivery solution will ensure that fleets are managed effectively and that costs associated are tightly monitored and kept to the bare minimum.
TWA | Mar/Apr 2014
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ARE YOU GEARED FOR PERFORMANCE?
To stand out and drive your operation forward in today’s tough operating climate, fleet owners need to partner with a premium fleet management provider. Tracking your vehicles and drivers is just the beginning, but being able to identify patterns and make informed decisions is the key to unlocking sustainable results. MiX Telematics is a leading global provider of fleet and mobile asset management solutions delivered as Software-as-a-Service, or SaaS, to customers in 112 countries. We help customers across diverse industries to reduce their risk, enhance their safety and boost their efficiencies.
www.mixtelematics.co.za
FLEET OPERATIONS
Your advice for cross border monitoring? HJ If it is true that transport is a tough business, I think that transport across our borders into our neighbouring countries and even higher up into Southern Africa must be one of the toughest, most demanding and challenging businesses to be involved in. Although the opportunities and rewards are plenty, the risks are just as many – or even more. Infrastructure (i.e. roads, fuel, safe resting places), crime (i.e. theft of cargo, fuel, assets, bribery and corruption), absence of time management (i.e. waiting time at border posts, loading and offloading sites) and social challenges are just some of the hurdles faced by every cross-border operator. International roaming is available on the various GSM service providers throughout Southern Africa, providing operators with the possibility of real-time visibility of their fleets and, as coverage improves in most countries, will allow further and longer access and visibility of their vehicles and drivers. The real-time visibility does, however, come at a fairly high price as international roaming data and SMS charges are currently very expensive. Transporters need to carefully
consider the price-to-function value. There are, however, alternative reporting channels such as selective SMS data transmissions on pre-selected priority information or satellite communications options through loworbiting satellites, which could reduce the costs of cross-border vehicle monitoring. Much the same applies to cross-border operators as to normal operators – control and management of drivers will be critical to ensure low as possible costs, improved turnaround time adherence resulting in more loads and ultimately more income. DS The use of an integrated invehicle communication device that has turn-by-turn navigation, integrated route and order information, and two-way messaging makes it affordable and easy to better work with drivers in remote areas and cross border. LS A robust driver monitoring system, allowing for the coaching of the driving behaviour on return to South Africa, would be the best advice for a crossborder transport operation. Establishing a culture of safe driving through the coaching and skills development prior
to the trip across the borders will eventually reduce the risk when the vehicle and trailers are operated outside the borders of South Africa. Ninety per cent of all driving risk is due to the behaviour of the driver, and addressing the probability of the risk through skills development and coaching reduces the risk exposure and enhancing the effectiveness of drivers. SS We live in an age of ‘keeping up’ and progress – ironically – waits for no one. The reality for fleet operators is that if they don’t keep up with current fleet management technology, they’ll soon realise they’re underequipped. And ignoring the nagging demands of tomorrow may very well mean business improvement is merely a mirage in the road ahead. The same applies to crossborder operators that also need to monitor their trucks, trailers and drivers once they leave the South African border. Prominent costs such as fuel, maintenance and tyres are directly proportionate to the number of kilometres travelled. Apart from these costs, crossborder operators also need to consider the risks associated with operating outside
of the country’s borders. It is usually because of these risk factors that operators tend to substitute detailed fleet performance telematics data for positional information. The best advice on this topic would be “don’t compromise”. First of all, because you can least afford to and secondly because you don’t have to. The fact that one’s business extends beyond the boundaries of one’s home country should never be a reason to compromise on full-featured premium business telematics data. In fact, if your business involves cross-border operations, you can more than likely increase your profits substantially through the tangible business benefits derived from a premium fleet management system. It has long been believed that cross-border operations require satellite-based tracking systems in order to ensure accurate vehicle positional information. Although this is true to some degree, it is not true that you cannot get an efficient and yet cost-effective integrated system that will give you both satellite accuracy as well as detailed fleet telematics even in those cases when GSM coverage is compromised. Legacy-technology-based offerings dictated that you ran duplicate systems that obviously attracted, in some instances, more than just duplicated infrastructure and service fees. Today’s integrated systems leverage both technologies – GSM and satellite. This translates into a cost-effective solution. Also, with GSM coverage constantly improving across Africa, the reliance on satellite is diminishing and along with it the excessive communication costs. Integrated systems are more cost effective, offer a single user interface and mean operators have one service provider. Having all fleet data in one place is another element that will increase its efficiency.
TWA | Mar/Apr 2014
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/LYH 9LGHR 7UDFNLQJ RI \RXU 9HKLFOHV lnkwazi Video Tracking allows you to track and view your vehicles in REAL TIME via live video streaming from up to 4 cameras on your truck, car or bus! Using the Internet, GPS, and Mobile CCTV technology, you can now view your vehicles, drivers and cargo from your office, wherever they are in the country. Our cloud based Control Room software allows you track your fleet, identifying speed, location, fuel-level and more. A new era in vehicle tracking, providing you with the full picture.
060 500 1538
ADVERTORIAL
Inkwazi Video Tracking A vehicle picks up unwanted passengers from alongside the road, fuel is illegally siphoned from a vehicle, transported goods arrive at the destination damaged or missing, a vehicle is involved in an accident which was not the fault of the driver or was due to some action of the driver prior to the accident, calls are received from the public regarding a road incident or the way the driver is driving, a vehicle is delayed for an unexpected period of time and the reason is unknown…
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HESE ARE ONLY a few of the scenarios that are costing companies an increasing amount of money, and in most cases they are unaware of the problem. These issues cannot be identified and answered by the traditional fleet monitoring systems and companies are looking towards an old and trusted visual method to finding a solution to these problems – “a picture paints a thousand words”.
Currently, there are several trends in the market: Vehicle Recorders which are typically camera units that are installed on the vehicle windscreen and store their data to a SD card. These are usually a very inexpensive solution to providing a visual to what is happening in front of the vehicle, and some units can provide simultaneous footage of what the driver is doing. Models can be purchased that integrate GPS data into the video footage. The product is, however, essentially a logger that can store the video footage for a very limited amount of time and the idea is that one is able to manually retrieve footage should it be required as proof or for investigation. Models are also available that can upload the stored footage to a computer when the unit comes within Wi-Fi coverage. IP Cameras are cameras which allow a customer to connect directly to the device over the internet. These are useful for live monitoring but hold no ability to capture and store video footage on-board, which requires that this function must be performed at the systems side and needs a constant costly mobile data connection. Typically, these devices do not integrate GPS data into the footage. Event Recorders are units that identify an event through the sensors and inputs of the device and store a limited amount of video footage around the event. This footage is uploaded to a server and is typically available for customer viewing in a web browser or is emailed together with analysis of the event. This is currently being used for driver behaviour
Nicolette Bailey, MD, Inkwazi Video Tracking and education. GPS information is normally integrated and is typically used as one of the sensors to the event identification. Mobile Digital Video Recorders (MDVR) are devices that are able to capture and store video footage from multiple cameras on-board on a hard drive or SD card. They have ability to transmit live video or download stored video footage over 3G or Wi-Fi. They integrate GPS data into the video enhancing the visual footage with tracking information. These products are typically produced by companies in the CCTV industry and are primarily aimed at using the video footage to monitor a vehicle’s activities. Inkwazi Tracking has approached this from a different position. The company has been developing products for the vehicle tracking market since 1997. Instead of creating a typical CCTV monitoring product, where tracking data is used to enhance the video footage, we have extended our tracking products to use video footage to enhance the tracking data. This means that the customer has the all the fleet management functionality with the added ability to apply a visual component to the reporting. Using MDVR technology we are able to provide live real time visuals from multiple cameras in a vehicle to any user at any location as long as they have an internet connection. Added to this we are able to capture and store high quality video footage on-board for an extended period of time, typically around 30 days. The user has the ability to replay historical footage as a video stream from the vehicle in response
to a time-based request by the user, even if the vehicle is out on the road, or can download the video files directly. Through the tracking technology, the system is able to identify user definable events and will automatically download a customisable time period of video footage around the event to the system, where it will be preserved until deleted. The time period can later be changed to increase the amount of video footage to be included. These events are highlighted within the system, allowing the customer to quickly identify and view critical video footage. The majority of influential activities cannot be identified by the tracking system alone and only come to light after the fact. The system has the ability for users to not only review the video footage, but also generate user-defined events, forcing the system to automatically downloaded and store the relevant footage and tracking data. The Inkwazi system is aimed at any vehicle owner who wishes to reduce costs by monitoring the activities of their vehicle. The system can be used by the single vehicle owners and by organisations with large fleets. The flexibility of MDVR technology allows different types of cameras to be installed in any location in the vehicle and allows for a multitude amount of monitoring scenarios to be dreamt up. In many cases this has not been a preventative measure, but an enhancement to the customer’s business model, such as the farmer who is able to view the status of his lands while the tractor moves around and the customer that used the product as a time and attendance system by asking the workers to stand in front of the camera – with Inkwazi Video Tracking the possibilities are endless. Please view our 3D presentation on www.youtube.com/watch?v=k4do930lkfE. Here you can view multiple sample videos of existing installations and possible camera placement. For product advantages, please visit our website www.inkwazitracking.co.za/
TWA | Mar/Apr 2014
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COMMERCIAL VEHICLES
Impact of VAT and e-tolls Transport operators are experiencing an increase in the costs of moving goods through Gauteng as a result of the implementation of e-tolls. Simon Foulds speaks to industry experts to find out how the system is impacting operators.
G Gavin Kelly, technical and operations manager at the Road Freight Association
Beric Croome, tax executive at ENSafrica
Vusi Mona, general manager at SANRAL
AVIN KELLY, Beric Croome and Vusi Mona discuss how the system is impacting the road transport industry in Gauteng and the VAT consequences for operators driving on the toll roads. Barney Curtis, chief executive officer, FESARTA (Federation of East and Southern African Road Transport Associations) highlights the problems foreign truck operators are experiencing as they drive through Gauteng.
VAT Kelly says the RFA raised the VAT concerns with SANRAL during the initial planning stages of the toll roads in Gauteng and were assured this would be taken care of. “Nazir Alli noted that freight operators could ‘claim the VAT back’. The question that arises is: will this be done in the quarterly VAT reconciliations or will it be done at the end of a financial year through the standard tax operating expenses claim?” Croome states the operator and fleet manager will be entitled to recover the VAT paid on the e-tolls as an input credit when submitting its VAT returns to SARS, so long as the travelling was for the purpose of making taxable supplies and they receive a valid tax invoice that complies with the provisions of Section 20 of the Value-Added Tax Act, Act No 89 of 1991 (VAT Act). Furthermore, Section 20(5) of the VAT Act does not require that the name, address and VAT registration number of the company be reflected on a tax invoice where the consideration for the supply does not exceed R5 000.
Impact of toll roads
Barney Curtis, chief executive officer, FESARTA
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Asked what the impact of the toll roads has been on its members, Kelly says: “The bottom line is being affected because the business must carry the expense. An increased expense equates to increased rates and this in turn means an increase in the price of consumer goods.” “As we noted in our submissions regarding e-tolls, rates will increase – and that was before the last four fuel increases have been taken into consideration. Prices have already started to climb and the consumer is in for a hefty shock come April. SANRAL and the Department of Transport were warned about this, but they ignored the warnings.”
TWA | Mar/Apr 2014
Mona adds: “When evaluating the impact of e-tolls, there are two components to be considered. First, the benefits as a result of savings in travel time due to improved infrastructure. The upgrade of the freeway network resulted in substantial travel time savings as was also confirmed by other studies. The benefits also relate to savings in vehicle operating costs (less stop/start, travelling on a good surfaced road vs a poor road, impact on clutch/brakes, etc). The second component to be considered are the costs associated incurred by road users by paying directly for the benefits accrued.”
Traffic flow Kelly says trucks carrying freight are moving easier on the toll roads due to the large number of light motor vehicles that have left the freeways, which are now clogging up the alternative routes. Regarding operators switching to night time operations, Kelly adds some members have moved to the better off-peak times, but that not all freight has done so. Mona is of the opinion that the improvement of the highway has definitely improved the flow of traffic due to expanded lanes and upgraded interchanges. Kelly concludes: “One of the main frustrations from members lies in the billing processes, which are flawed. Cost is being felt in creating capacity to administer and control invoices from SANRAL which seem to be incorrect.”
Foreign drivers Curtis says, “One of the main concerns with transporters foreign to South Africa, is that the tolls have to be paid in South African Rands. At this time, there doesn’t seem to be a facility to pay in other currencies and FESARTA is having ongoing negotiations with the Department of Transport, to try and resolve this matter.” “At present, foreign vehicles’ number plates are being read by the gantries, but their owners are not being invoiced. This means that vehicles foreign to South Africa are ostensibly using the upgraded freeways for no charge.” “However, transporters should be careful. Once a system has been established to charge foreign vehicles, then the outstanding charges will also be invoiced. These charges will go right back to the start of the system last year.”
COMMERCIAL VEHICLES
2014 and the MCV In 2013, sales of medium commercial vehicles increased by 14.66% to 11 585 units from 2012 figures, and was the best performing sector within the commercial vehicle sector.
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CVS PLAY a pivotal role in many fleets. Simon Foulds speaks to Danie de Beer of Hyundai Automotive South Africa and Jacques Carelse of UD Trucks Southern Africa about growth areas within this segment. Hyundai still only imports the HD65 &
HD72 models, at 6 500 kg and 7 200 kg GVM respectively. They are currently the only two right-hand drive models that Hyundai Truck & Bus has available for the South African market. However, the range might be increasing in the future as more right-hand drive units are manufactured. De Beer, who is general manager: commercial vehicles at Hyundai Automotive South Africa, says: “We mainly target operators that make use of MCVs spread across a wide range of applications – courier, construction, distribution, etc. Looking at the 2013 sales volumes, it is evident that the demand for MCVs are on the rise.” UD Trucks may not have some of the newest models available on the market today, and this year sees the run out of the UD35, 40 and 40L, but Carelse, MD of UD Trucks Southern Africa, says its trucks have a very loyal following among some of the biggest operators in the country.
Africa Hyundai Automotive South Africa has the distribution rights for trucks in South Africa, Botswana, Namibia and Zimbabwe. East Africa is handled by different distributors in Kenya and Tanzania, which import the full ranges of passenger and commercial vehicles into their respective markets. Carelse states: “One of the major challengers for the fleet owners operating in the Southern Africa region is the tough road conditions drivers have to deal with, especially in remote areas. “Operating in Africa is very different from running a fleet in other international markets. We have tougher road and operating conditions, so you therefore need a range of trucks that is able to effectively handle this type of environment,
without breaking the bank when it comes to operating costs.”
2014 Regarding the year ahead, De Beer says: “We foresee 2014’s market to remain flat; obviously we do not have a crystal ball, but our aim is to increase market share in a growing or shrinking market. E-tolls, fuel prices and possible interest rate increases might put a damper on buying activity, but we need to be patient and reassess mid-year. “We believe that this year’s growth will be spread across all sectors. There are a lot of construction projects on the go and some operators have smaller loads, necessitating Jacques Carelse them moving from bigger to smaller vehicles and new warehousing and distribution contracts for various products have been awarded recently.” Carelse adds: “UD Trucks believes that we would rather offer a product range that has appropriate technology and equipment that suits the local environment and operating conditions. “Our strategy is to continuously adapt to the changing dynamics of our market, which in future will require more operationally practical vehicles of good quality, but which offer customers more profitability per rand spent. We also need to prepare for more stringent compulsory specifications and environmental standards, which will be implemented in 2015.”
“Our strategy is to continuously adapt to the changing dynamics of our market.”
“We believe that this year’s growth will be spread across all sectors.” Danie de Beer
TWA | Mar/Apr 2014
21
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COMMERCIAL VEHICLES
Service centre launched A top independent MAN dealership has opened a state-of-the-art service facility in Johannesburg.
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OHANNESBURG TRUCK & BUS, owned by Imperial Group’s Motor Retail Division, officially opened its new dealership in City Deep, Johannesburg, on 13 February 2014. The new service facility forms part of MAN Truck & Bus South Africa’s nationwide network of 31 proprietary and independent dealerships, dedicated to supporting the full spectrum of MAN truck and bus products. Having purchased the dealership from Eskom six years ago while it was located in Rosherville, Gauteng, Imperial Group appointed Greg Mervitz as general manager to transform the business from a parastatal organisation into a fully fledged entrepreneurial operation. According to Mervitz: “The move to our new high-profile location on Heidelberg Road in City Deep follows an extremely successful half-decade of transformation within the dealership, which saw turnover climb by 600% since the buy-out in 2008.” The move from Rosherville to the new R50 million facility in August 2013 was executed with absolute efficiency, enabling the dealership to not lose a single day of operations, adds Mervitz. MAN Truck & Bus South Africa CEO Bruce Dickson says: “Mervitz and his team showed true professionalism and absolute commitment to achieve the seamless move of its operations. This dedication to offering MAN customers exceptional levels of service has made the operation our number one after-sales dealership in the country.” The new dealership was designed to not only function as a ‘drive-through’ service centre, but also to rate as a four-star eco-friendly building, explains Mervitz. “The new building includes renovated office space, a new workshop with eleven 30-metre drive-through service bays, an integrated parts warehouse and ordering department with roadside receiving and dispatch areas, as well as under-roof parking for 28 vehicles. The strategically configured workflow of the building
allows for improved vehicle servicing turnaround times while bringing greater levels of security to our parts warehouse.” From a ‘green’ perspective, the new facility “is designed for efficiency,” says Mervitz. “The fitment of solar panels to our roof enables us to run approximately 80% off-grid during peak hours in summer, while a water harvesting system and recycling plant allows us to use rain water for our wash bays and gardens. A waste-disposal company has been contracted to remove all redundant product from our premises, a process which generates more revenue for the dealership.” Situated on 22 000 m2 of prime real estate in the epicentre of South Africa’s logistics hub (City Deep Container Terminal), Johannesburg Truck & Bus’s new dealership is ideally positioned to capitalise on the growth in the road freight industry, both domestically and intra-Africa. “The new dealership, apart from being close to major highways, will also benefit from its close proximity to the new MAN Parts Distribution Centre in Germiston, which, like Mervitz’s operation, is geared to keeping vehicle uptime at optimum levels,” says Dickson. Geoff du Plessis, executive chairman of MAN Truck & Bus South Africa, states that: “The success of MAN’s relationship with Imperial over the years has been forged on a mutual understanding that customer satisfaction is the number-one focus of our respective operations. For MAN, that means supplying and supporting its independent dealers with purpose-built products, market-friendly financing solutions, skills transfer and capacity building, rapid parts supply and swift warranty settlement.” Via its Dealer Development Programme (which includes an annual Dealer of the Year Award), MAN offers ongoing support to its dealer network through an array of initiatives designed to boost both human and technical capacity in its dealerships. This includes enterprise-wide skills development, specialised tool provision, marketing support and various additional tools to help improve operational efficiency.
Flagship MAN Johannesburg dealership Truck and Bus
LEFT Philip Michaux, CEO Imperial Auto & Car Rental officially opens Johannesburg Truck & Bus Centre together with Geoff du Plessis, Executive Chairman of MAN Truck & Bus SA on the left and Greg Mervitz, General Manager of Johannesburg Truck & Bus
TWA | Mar/Apr 2014
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COMMERCIAL VEHICLES
Travelling 25 times around the world Thirty Iveco Dailys have reached one million kilometres by travelling day in and day out across the precarious terrain of the African continent. Which, according to Iveco, is confirmation of their great performance and reliability.
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VERY DAY FOR THE PAST three years, an Iveco Daily has travelled the 1 000 km distance from South Africa to Namibia – an impressive feat which has now exceeded one million kilometres travelled. These recorded numbers once again confirm the reliability and robustness of the Iveco light vehicle product range. A total of 13 customers from South Africa, with an estimated 30 vehicles between them, have informed Iveco that they have reached this mileage figure: a number that is more than twice the distance between the Earth and the Moon (almost 400 000 km) and 25 times the Earth’s circumference (40 000 km). The Iveco Daily, in the Minibus version, particularly faces vast distances every day on roads that are not always tarmacked and where it is necessary to drive with extreme caution. The Daily thus demonstrates itself to be as a strong, safe and reliable vehicle, but above all resistant enough that it has a seven-digit odometer installed into it. The vehicle’s chassis has metal struts, which provides structural rigidity, but also resistance to wear and tear – especially on difficult terrains such as those in Africa – and durability. The independent front suspension and rigid rear axles provide the vehicle with an excellent ability to absorb the roughness of roads, linearity and precision in steering response, and road holding and handling stability. From 1978,the Iveco Daily has been a proven success story serving as the benchmark for light transport in Europe and worldwide. From the very first version, the vehicle has set new records, always ahead of the market, becoming a point of reference for innovation in the field of light commercial vehicles. The secret of its success lies in its ability to evolve continually,
confirming the values that have always characterised its DNA, such as reliability, efficiency and versatility. “Strong by nature”, the Daily, in its 4x4 version, was recently featured in a roadshow that travelled through six countries in Southern Africa: South Africa, Swaziland, Mozambique, Zimbabwe, Botswana and Namibia, stopping at the major dealerships throughout the area. The Daily4Africa initiative was created with the aim of promoting the identity of the vehicle on the African continent, but also to reinforce the importance of road safety and the practice of correct behaviour when driving, an issue that is very important to Iveco and which has been the focus of numerous international activities over the past year – in addition to the launch of the cooperation between Iveco, New Holland Agriculture and the International Automobile Federation (FIA) for the FIA Action for Road Safety campaign.
A total of 13 customers from South Africa, with an estimated 30 vehicles between them, have informed Iveco that they have reached this mileage figure
The Daily, in its 4x4 version, was recently featured in a roadshow that travelled through six countries
TWA | Mar/Apr 2014
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FREIGHT FORWARDERS
Saaff names top young forwarder Fortunate Mboweni of Bidvest Panalpina Logistics has been named South Africa’s Young International Freight Forwarder of the Year.
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CCORDING TO DAVID LOGAN, CEO at the South Africa Association of Freight Forwarders (SAAFF), the award was based on her submission on the challenges of super abnormal loads and the complexities associated with the handling of ultra-sensitive cargo. Says Logan: “Mboweni wrote a wellresearched paper on two topical subjects: the shipping of highly sensitive material and the management of
The status attached to this competition is enormous and reflects positively on both the individual and the company for whom they work 26
TWA | Mar/Apr 2014
project (large, abnormal) cargo. The delivery of work was of a high standard and she can be proud of her efforts, which, in my opinion, stands a good chance of winning — at least the RAME (Region Africa Middle East) round.” “She will now write a dissertation in order to compete in the regional round of the competition, and if she is successful, will be entered as a global finalist into the ‘Final Four’, which will be decided in Istanbul at this year’s Fiata Global Congress.” The competition was initiated by its lead sponsor, the TT Club, in 1999 and it aims to encourage training and development in the industry and elevating professional standards . Entrants who are brave enough to take up the challenge
FREIGHT FORWARDERS
are obliged to write a dissertation on a topic that is set by SAAFF. This topic allows the entrant to write about current and often challenging issues and to demonstrate their knowledge and expertise on export and import forwarding and clearing matters. SAAFF’s judging panel carefully adjudicates each entry in order to identify a winner, whose name is then submitted as the candidate for the Globalisation and the need regional round. As the competition is global winner is announced at the FIATA Global to reduce cost over the entire supported by FIATA (The International Congress each year. supply chain have re-focused Association of Freight Forwarding Logan concludes: “The status attached to this the freight forwarder in Associations), it is adjudicated globcompetition is enormous and reflects positively ways that are innovative and functional. ally through its regional structures, on both the individual and the company for which under FIATA nomenclature whom they work. Naturally, only freight forwarders is RAME. may enter.” In 2012, SAAFF’s entrant, Daniel Terbille, won The winner of this round then goes through to the the global competition and Logan says they have faith in finals comprising the three other regional winners and the Mboweni doing well in this international event.
Did you know?
From the left are Maria du Preez, Fortunate Mboweni and James Reddy from Bidvest Panalpina Logistics
TWA | Mar/Apr 2014
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CORRIDORS
Northern corridor Apart from linking the land-locked countries of Uganda, Rwanda and Burundi with Kenya’s maritime port of Mombasa, the Northern Corridor also serves the eastern part of the Democratic Republic of the Congo (DRC), South Sudan and northern Tanzania.
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ECAUSE OF THEIR heavy reliance on the Northern Corridor for their overseas trade, as well as trade among themselves, Burundi, the DRC, Kenya, Rwanda and Uganda are contracting parties to the Northern Corridor Agreement. The agreement provides the legal framework for collaboration among these countries on matters to do with transit transport, customs control, documentation and procedures, as well as the development of infrastructure and facilities relating to sea ports, inland ports and waterways, roads, railways, pipelines and border posts.
Âą Two-
thirds
of the road network is paved, although the condition is generally poor due to inadequate resources for rehabilitation and maintenance. Overloaded freight vehicles and poor enforcement of load regulations further deteriorate the road network, reducing the lifespan of the roads.
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TWA | Mar/Apr 2014
Port of Mombasa
A single customs territory at the Port of Mombasa has improved efficiency enabling transit cargo to be cleared within a shorter time. The East Africa Community (EAC) adopted a regional approach for reducing border-crossing delays by transforming the borders posts on the priority regional transport network into one-stop border posts (OSBP). Under the OSBP modal adopted in EAC, exit procedures take place on the entry side, with the trucks proceeding directly through the customs area on the exit side of the border to the entry side. A regional agreement provides the framework for extra-territorial jurisdiction of border management agencies, allowing for joint controls on only one side of the border. Transit of containers from Mombasa to Kampala has been reduced from 18 days to four, from Mombasa to Kigali from 21 days to five and from Eldoret to Kampala from three days to eight hours.
The entire Northern Corridor network stretches across 8 600 km
The Port of Mombasa is a major maritime gateway to East Africa. Most of the hinterland countries are connected to Mombasa through the Northern Corridor, which explains why Malaba and Busia (on the Ugandan border) are the two busiest border crossings on the Northern Corridor. More than 600 trucks cross daily from Kenya to Uganda at Malaba. Looking at the combined figures approximately 300 000 trucks cross the Malaba and Busia border posts every year.
Road network The entire Northern Corridor network stretches across 8 600 km. Road transport is fully liberalised, accounting for more than 70% of the total transit flow of traffic within the corridor.
CORRIDORS
Key transit transport routes are from Mombasa to Bujumbura (the south-west terminus) covering 2 000 km of road and the Mombasa Kisangani Road covering 3 000 km. The bulk of imports and exports destined to and from the countries in the corridor are transported through either of these transit routes.
Trade deal facilitating trade
ONE-STOP BORDERÂ POST The conversion of Malaba into an OSBP dates back to 2002 when a Kenya-Uganda task force was established. The initial focus was on rail transport, but road transport changes in the border process started in 2008 with specific treatment granted to certain types of loads and the customs operating hours extended to 24/7.
In February, a US$25 million (R269.75 million) funding deal aimed at facilitating trade along the Northern (linking Rwanda to Mombasa ports) and Central (to Dar es Salaam) corridors was signed by TradeMark East Africa (TMEA) and the US. TMEA said in a statement that this agreement will also focus on facilitating regional integration. The statement added that the support will help TMEA broaden its regional integration programmes at both the ports of Mombasa and Dar es Salaam as well at the key border posts along the Northern (Kigali-Kampala-Mombasa) and Central (Kigali-Dar es Salaam) corridors. TMEA will also work with the East African Community (EAC) member states to remove the remaining barriers to trade. These include high customs fees, corruption, weighbridges, bad roads and delays at border posts. Removing barriers to cross-border trade can reduce the average time to import or export a container from Mombasa or Dar es Salaam to Burundi, Rwanda and Uganda by 15%.
Single customs territory
incidents of corruption. This is because local officials along the routes have been in charge of the roadblocks that have been taking the bribes. Therefore the maximum number of days a truck should spend on the road from Mombasa to Kigali should be five days. It used to be weeks due to the various roadblocks and weighbridges along the route.
Northern corridor of East-Africa
Northern Corridor transit and transport agreement The Northern Corridor Transit Transport Coordination Authority (NC-TTCA) is an intergovernmental organisation established under the Northern Corridor Transit and Transport Agreement, which was signed in 1985 with the primary focus of facilitating trade
There have been many new developments on the Northern Corridor route, linking Kenya’s port of Mombasa to Uganda, Rwanda, Burundi and the eastern DRC, over the past few months. The changes are all aimed at improving the flow of goods to the landlocked countries, especially Rwanda, Uganda and Burundi. The Northern Corridor has been characterised by delays in clearing and transporting goods, congestion at Mombasa and rampant loss of containers. The government of Kenya has removed roadblocks and reduced weighbridges. These changes have helped traders cut costs in several ways. In the past, clearing agents in Kenya would charge for clearing goods in Mombasa, the Ugandan agents would also charge while crossing into Uganda and finally the Rwanda agents would also charge as well. Each of the three transactions cost money: approximately US$300 per container in Kenya, US$100 to US$200 bond fee per container in Uganda and about the same bond fee in Rwanda. This is in addition to local clearing fees of US$100 per container. This would equate to a trader having to pay over US$800 on clearing fees alone to have goods delivered from Mombasa to Kigali. The road freight However, with a single customs territory in place industry serving this a fixed rate per container is now in place, costing corridor has expanded between US$300 and US$400 each, in essence rapidly, with cargo fleets reducing this cost by 50%. increasing in quantity It is also envisaged that removing roadblocks and brand but not in technical standards. and checkpoints between the borders will minimise
Road Freight
TWA | Mar/Apr 2014
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CORRIDORS
and transport among its member states using the Port of Mombasa. The treaty came into force in 1986 with the DRC joining the agreement in 1987. Due to the recurring challenges faced by the users and regulators along the Northern Corridor Transport system, the NC-TTCA conducts periodic surveys to identify and address non-tariff barriers along the Northern Corridor in order to come up with recommendations that encompass the views of the public and private sector players along the corridor. The surveys are conducted by a multidisciplinary survey team comprising both public and private sector stakeholders involved in the handling and clearance of goods along the corridor. Regular updates can be obtained on www. ttcanc.org. These surveys look at the physical transport infrastructure and facilities in place, procedures for handling and clearance of goods along the corridor, examine the cargo and people clearance processes at the border stations, and hold one-on-one and plenary sessions with the relevant stakeholders operating at the transit nodes visited (border stations, ports, ICDs and parking yards). The last stakeholders’ survey along the Northern Corridor at time of going to press took place
during September 2013, covering the transit sections of Eldoret-Malaba, Malaba-Elegu/Nimule via Soroti and Gulu, and Elegu/Nimule-Juba. This is situated in the south Sudan region and affects containers from the Port of Mombasa. For the full report, visit www.ttcanc.org.
TradeMark East Africa provides technical and monetary support to the EAC secretariat, national governments, private sector and civil society to help improve business environment in the region.
TWA | Mar/Apr 2014
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GOODS IN TRANSIT
Local goods, local risks, local regulations Africa is a commodity-producing continent. The commodities are, more often than not, bought by international traders through local companies set up by them. More trade means more insurable assets in Africa, which leads to more insurance claims. By Peter Lamb
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HE ECONOMIC BOOM in Africa is encouraging more trade in Africa. Unlike in the past, there is now a business incentive for cargo insurers to pursue recovery actions against liable third parties in Africa as the losses to traded commodities can no longer be ignored or absorbed. The African market is dominated by international traders who rely on global transport insurers to underwrite their risks. The cost benefits of global insurance are obvious. There are few African insurers that have the capacity to operate alone in the transport storage insurance market. The African transport insurance market is highly regulated. There are many statutory insurance regulators who, in terms of their domestic insurance legislation, require any assets within that country’s jurisdiction to be insured with (or through) a local insurance company. Failure to comply with these requirements can lead to an imposition of a fine or even imprisonment of the wrongdoer. Often these insurance regulators also require that only locally licensed brokers, loss adjusters and surveyors are involved with the insurance of a local asset. Reinsurance into London, Europe and the US is common. It is the insured local entity that will be liable for any transgression, in particular the respective board of directors or managers of the party that has not insured its assets locally.
The regulation of the African transport insurance industry is not new. In many instances, the relevant insurance legislation has been around for some time. What is new is the apparent desire by local regulators to enforce the legislation. Those insured take the view that once they are indemnified by the insurer and received payment for the loss in terms of its insurance policy, it is no longer involved with the recovery action. This is not correct. In terms of the doctrine of subrogation, the insurer may commence recovery action in the name of the insured, and the insured is obliged to reasonably assist the insurer with its attempts to recover the loss. If the recovery action is commenced in an African country that has a regulated insurance industry, the insured, among others, may (where the goods are insured elsewhere) be exposed to the risk of non-compliance with local insurance legislation. Certainly, any liable third party may, or discover that the goods were not locally insured, raise the issue as a litigation or negotiation tactic. The increased enforcement by African insurance regulators means that commodity traders, transporters and their insurers must be aware of both the local regulations and the insurance arrangements set out in their commercial transactions. For example: A local buyer, part of a global trader, buys goods from a local seller. The goods are stored in Zambia for processing and later sold to the global trader for subsequent export and distribution. Often the goods are insured via London or in the European market from the moment the local buyer goes on risk. On the face of it, this is contrary to local regulations. With the increase of trade in Africa, compliance with African insurance laws, by both the trader and its insurer, is going to become more important as more recovery actions are pursued in respect of damaged cargo. It is worth taking legal advice on these issues.
The African transport insurance market is highly regulated
THE AUTHOR Peter Lamb is a transport lawyer at Norton Rose Fulbright South Africa.
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TWA | Mar/Apr 2014
GOODS IN TRANSIT
Accelerated regional integration A new single customs territory is revolutionising the way goods are exported and imported into East Africa. South African traders would be well advised to take note, says Hester Hopkins Hopkins.
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WANDA, KENYA AND UGANDA have entered into an agreement known as the Tripartite Initiative for Fast Tracking the East African Integration, to the exclusion of fellow East African Community partner states Tanzania and Burundi. “The intention of the agreement is to create a single customs territory among member countries in order to facilitate trade and investment within the area,” says Hopkins. The new agreement aims to alleviate trade barriers between member countries in an attempt to attract foreign trade. “The Port of Mombasa in Kenya, currently operated by the Kenyan Ports Authority, will act as the first point of call between the member countries,” explains Hopkins. “Clearance of the goods, as well as collection of taxes, will be done at the port. Thereafter taxes will be distributed among member countries.”
A more streamlined process This allows for an easier, less time-consuming clearance, with the aim of eliminating multiple-clearance procedures and burdensome paperwork. “Clearance at the port of first entry will eradicate multiple-bond payments, which will lead to reduced costs for business,” adds Hopkins. “The member countries will also recognise mutual customs bonds executed by their respective insurance companies, as cargo destined for bonded warehouses will be verified at the port of origin or entry by liaison customs officials representing destination countries.” The implementation of the single customs territory has already reduced the period for shipments from Mombasa port to only one day. “A large portion of the barriers, including the majority of the weighbridges and roadblocks, have been eliminated on the route between Mombasa port and Kigali, Rwanda, decreasing the period of travel for trucks from 22 days to five days,” she says. “This will lead to an enormous cost saving by importers and exporters in the area.” Since the beginning of the year, residents can move freely between the member countries and need only provide East African identity cards when crossing borders. “This has alleviated the visa processing and paperwork of truck drivers and
eased the current border congestion, which has allowed for speedier movement of cargo,” comments Hopkins. “Rwanda clearing agents, as well as the Rwanda Revenue Authority, have started setting up shop at Mombasa port in an attempt to speed up the clearance procedure and avoid unnecessary storage costs for traders,” she continues. “Authorities aim to upgrade and interlink the customs systems of each member country to create a more streamlined system.”
South Africa should consider improving its trade and investment relations with Rwanda
Teething problems Problems do, however, exist and will need to be addressed. “The Kenyan Ports Authority in Mombasa has bureaucratic tendencies, sometimes leading to time delays in goods clearance,” says Hopkins. “Gatuna border in Rwanda is currently not geared to handle the large increase in truck loads, which leads to further delays. Border control will need to expedite cargo clearance and reduce any forms of corruption as a means to decongest the facility.” On a positive note, Rwanda has been rated the second most business-friendly country in Africa. “Implementation of the new single customs territory, as well as its businessfriendly rating, should lead to increased trade opportunities and decreased costs for foreign traders,” asserts Hopkins.
Implications for SA She concludes: “South Africa should consider improving its trade and investment relations with Rwanda, especially exports by the agricultural sector as Rwanda is prone to food shortages. South African exporters into Rwanda should consider shipping to Mombasa rather than Dar es Salaam in order to benefit from the single customs territory. “Local South African traders, especially exporters of tea and coffee, as well as African merchandise, could potentially be affected by the increased trade opportunities and decreased cost of trade in Rwanda,” she says. “This could mean that foreign traders decide to import to Rwanda rather than South Africa in an attempt to cut the costs of shipping.”
THE AUTHOR Hester Hopkins, senior manager at Deloitte and a customs expert
TWA | Mar/Apr 2014
33
What’s the
The new world order has led to a seismic shift from customer service to customer centricity.
Discover what the future holds for South African businesses and supply chains in Barloworld Logistics’ 2014 supplychainforesight report: The rise and fall of customers and companies; the power of talent, teamwork and technology. For a copy of the 2014 report, along with industry speciďŹ c reports, visit www.barloworld-logistics.com
INFRASTRUCTURE
Transport the key to Africa’s growth With major infrastructure projects forging ahead, Africa’s time has arrived. By Abbas Jamie
A
S COMMENTED BY George Soros, chairman of Soros Fund Management: “Africa [is] one of the few bright spots on the gloomy global economic horizon.” The world’s financial crisis, with its dramatic impact on the major developed economies, highlighted the potential among Africa’s 54 sovereign states and also what was actually happening: • In recent times, six of the ten fastest-growing economies in the world were on the African continent and the IMF predicts that leading up to 2015 seven will be African. • Between 2007 and 2011, there was 20% compound growth in FDI projects and in eight of those ten years, Africa grew faster than East Asia (The Economist). • It is forecasted that Africa will grow by 7% per annum over the next 20 years (Standard Chartered Bank). Global companies are overcoming their reservations about doing business in the challenging environment of Africa and forming partnerships with consultancies offering a local presence as well as a track record of successful project work. An ever-present lure to persevere, especially in the debilitating climate of central Africa, is the abundant mineral wealth
The common thread restraining the unlocking of all this potential wealth is the lack of modern transport corridors of industrial commodities waiting to be exploited, such as diamonds, gold, cobalt, phosphate, platinum and rhodium. New finds of oil and natural gas on the east and west coasts look set to overcome energy limitations on growth. Africa also has 60% of the world’s unexploited arable land. The common thread restraining the unlocking of all this potential wealth is the lack of modern transport corridors to facilitate regional trade and water infrastructure. However, the construction activity in recent years has been increased tremendously with energy generation hubs and projects for basic water infrastructure, transport corridors and telecommunications all gathering momentum. Once commissioned, these will form the platform for a new era of self-sufficiency and the nucleus for increased investment and growth. From a total of 322 major construction projects, each valued in excess of US$50 million (R542 million), that were
in progress last year, 38% of them were in Southern Africa, with a total value of US$83.2 billion. East Africa accounted for US$67.7 billion, equating to 29%, and West Africa has a total of US$49.8 billion (21%). • The Southern Africa region is dominated by South Africa’s US$300 billion Infrastructure Development Programme, which includes the two largest projects under construction: Eskom’s US$20.3 billion Kusile Power Station and the US$10.8 billion Medupi Power Station. Of the active projects, 18% are involved in transportation. • East African development was given a boost in recent years by the discovery of significant amounts of oil in Uganda and Kenya, together with major gas finds in Tanzania. While the largest projects in the region are Tanzania’s Bagamoyo Port and Kenya’s Mombasa to Malaba Standard Gauge Railway Line, there are other important road and rail transport corridor projects in progress. In total, 42% of the region’s investment is in transportation projects. • West Africa has the second largest market on the continent in Nigeria, which looks set to overtake South Africa. Its investment in telecommunications infrastructure has provided 100% coverage, while significant railway construction is also under way. Ghana is developing its natural gas resources and aims to provide power for its neighbours. The overriding restrictions on growth in the region are the dilapidated and fragmented road and rail networks. Investment in this area represents 23% of West Africa’s infrastructure spend. There are major opportunities to grow trade between African countries through integrated transport corridors, but the challenge is bringing the concepts to fruition.
THE AUTHOR Abbas Jamie, Aurecon’s Transport Industry Leader for South Africa, Africa and the Middle East.
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FUEL
Quality lubricants lower operational costs With increasing economic pressure, such as escalating rates and inflation, fuel economy remains a key business challenge in South Africa across a number of sectors. By Raymond Abraham.
F
OR THE TRUCKING and transportation industry, the need for enhanced fuel economy is particularly significant. Fuel can account for a large portion of a fleet business’s operating costs. So, minimising fuel consumption can help improve the operating efficiency of a fleet and the return on its investment. There is also a growing focus on using energy more responsibly in the drive to reduce fuel consumption. Changes in legislation and new emission standards put pressure on vehicle manufacturers to improve efficiency. Besides reducing and controlling operational maintenance costs, improved fuel economy can also mean
The new Actros, which achieved fuel savings using Shell's products
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TWA | Mar/Apr 2014
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less fuel-related vehicle exhaust CO2 emissions. This can help fleet operators reduce the environmental impact of their operations. As a global leader in the development of fuel-efficient engine oils, and the world’s number one lubricants supplier, Shell continues to create state-of-the-art solutions that can offer tangible benefits to its customers, both for their vehicles and their business. In order to achieve these energy savings and fuel economy benefits, Shell has developed a range of synthetic lubricants. These are made from synthetic base oils and additives that are engineered to meet today’s demanding specifications. One of the latest synthetic product offering for heavy-duty diesel vehicles, Shell Rimula R6 LME engine oil, represents one of the company’s most advanced fuel economy technology to date. Shell Rimula R6 LME has been developed specifically for heavy-duty diesel trucks and bus fleets in close cooperation with leading engine and vehicle manufacturers. Recently, Shell Rimula R6 LME was approved for MAN to meet the MAN M 3677 oil specification, suitable for its Euro 6 engines. This approval from MAN is the latest from a number of leading OEMs, including Mercedes-Benz and Volvo. With enhanced adaptive synthetic technology, Shell Rimula R6 LME is formulated to offer enhanced wear protection, outstanding piston cleanliness and fuel savings, no matter what the driving conditions. The higher oxidation stability obtained from synthetic oils helps extend the oil life and prevents the formation of sludge and deposits, keeping components cleaner. This enables fleet operators to optimise and extend their oil drain intervals with the confidence that the equipment will be protected for the entire period. This leads to an improvement in fuel economy of up to 2% (over a 100 000 km oil-drain interval, compared with a typical 10 W-40 oil). Daimler set up the Record Run 2011 to demonstrate the fuel efficiency of its new Mercedes-Benz Actros Euro V and Euro VI trucks. A regular transport company journey in steady traffic conditions from Rotterdam in the Netherlands to Szczecin in Poland and back was repeated seven times. During the 10 000 km journey, three trucks – the then current Actros Euro V as well as the new Actros Euro VI and the new Actros Euro V – were exclusively fuelled with Shell FuelSave Diesel and lubricated with Shell Rimula R6 LME engine oil. The use of both products helped to achieve fuel savings of 7.6% for the new Actros Euro V and of 4.5% for the new Actros Euro VI compared with the current Actros Euro V, which had already established a Guinness World Record in 2008 for truck fuel efficiency. The decision to invest in the appropriate quality lubricants for your fleet can assist in the running of a smooth and reliable business. Using highquality lubricants can undoubtedly have an impact in extending vehicle THE AUTHOR life, lowering fuel bills, reducing mainRaymond Abraham is Shell tenance costs and increasing vehicle South Africa’s availability, helping you keep your fleet commercial on the road for longer. technical manager
TWA | Mar/Apr 2014
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NTBS
Non-tariff barriers Restrictions that result from prohibitions, conditions or speciďŹ c market requirements that make importation or exportation of products difficult and/ or costly are known as non-tariff barriers (NTBs).
T
HESE ALSO INCLUDE unjustified and/or improper application of non-tariff measures such as sanitary and phytosanitary (SPS) measures and other technical barriers to trade. NTBs arise from different measures taken by governments and authorities in the form of government laws, regulations, policies, conditions, restrictions or specific requirements, and private sector business practices or prohibitions that protect the domestic industries from foreign competition. FESARTA is at the forefront of registering issues with the
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TWA | Mar/Apr 2014
NTBS NTB
to trade relevant authorities – affecting transporters as their drivers move through foreign countries – as NTBs. It is continuously striving to ensure the relevant authorities in the respective countries remove the NTBs in their country, allowing the road freight transport sector to move freight without incurring additional costs. These costs are usually illegal and if left alone create additional financial burdens for the transporter, who usually ends up passing this cost onto the end consumer. The current and active list of NTBs affecting the crossborder road transport industry is given below and will be updated regularly in Transport World Africa, courtesy of FESARTA. The 34 following listed NTBs are active and are affecting transporters – both South African and foreign drivers – as they go about their daily routine of driving freight through Southern and East Africa.
Congestion at borders is costly for transporters
DESCRIPTION OF PROBLEM
423
Excessive charges at Kasumbalesa (DRC)
478
Charged for overlength trucks in Mozambique when an artic with container exceeds 16.5 m
480
Chililabombwe district council charging fees (Mozambique)
493
Charges on Gauteng freeways (e-tolls)
500
Tanzania is weighing empty trucks
515
Siavonga Municipality in Zambia is charging transporters
518
The CBRTA in South Africa is fining transporters for not having a through permit from Durban to the DRC
526
The Ministry of Agriculture in Zambia is requiring an export permit for each truck and limiting their weight to 30 t
528
The Zimbabwean Port Health at Nyamapanda is to charge for health inspections
530
Zambia is requiring all foreign tankers operating in Zambia to comply with its standards
531
Chobe Municipality in Botswana is requiring foreign transporters to purpose a permit
533
ZIMRA in Vic Falls is requiring SA trailers being imported into Zambia to be loaded on other trailers
535
SA CBRTA is requiring two cross-border permits to take one load from South Africa to Namibia
551
Zimbabwe is levying a toll fee for the Victoria Falls Bridge
561
Copper from the north is being hijacked in Gauteng
562
Kenya National Highway Authority is enforcing axle load limits instead of GCM limit
565
Zambia has road user charges for each town in the Copperbelt, transporters have to get separate ones for each town
566
Botswana traffic is enforcing 2.5 m wide and 4.1 m height, which are the old legal limits set for trucks
575
Zimbabwe does not allow trucks to use the old Beit bridge
576
CBRTA increased its road transport permit fees by up to 600%
580
Lack of parking space at Rusumo border post Rwanda
590
Unacceptable process of escorting vehicles in Mozambique
600
South African CBRTA fining trucks in Durban with goods transported from Gauteng, but originating from Botswana
604
Excessive delays at Chirundu Border in Zambia
605
Unrest problems on the DRC side of Kasumbalesa border
606
Beira port security problems
608
Zambia is to introduce a roads toll on all vehicles
609
Transporters being harassed for overall length of trucks at the Mochudi weighbridge in Botswana
614
Mozambique authorities at Beira fined the driver for an empty fire extinguisher, when the item was in good condition
618
Transporters being forced by ZAMESCO to use its parking facilities at US$35 (R375) per day
619
South African transporters are being forced to be escorted from Cuchamano along the Tete Corridor to their destinations. They are charged US$100 to Zobue and US$150 to Calomue
621
Highway attack near Nzega on Central Corridor
622
Zambia is charging foreign transporters 20% withholding tax
623
DRC is charging foreign transporters a 14% withholding fee
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WAREHOUSING
Warehouse optimisation Optimising racking and shelving needs is important for every warehouse operation. Simon Foulds speaks to Alan Moule, divisional manager at Modula System Logistics to find out how companies can achieve this.
T
HE FIRST STEP, says Moule, is to have a full understanding of the customer’s business, along with their real and perceived needs. “Although many operations may seem superficially similar, no two businesses are identical, and any storage solution needs to be tailor-made for that specific application.”
Customer requirements “Locality, product type and variety, number of SKUs (stockkeeping units), speed of turnaround, productivity, pilferage, shelf-life, etc., are among the many varied issues that have to be factored in. Fully comprehensive solutions will often require a variety of storage hardware and methodology within any particular operation. “In addition, the customer needs to be absolutely clear what motivates his apparent need for replacement or upgrade. What is wrong with the way things are now and what is he expecting to achieve through his current actions? Honest advice is clearly what he needs and this is what the specialist is expected to provide.” Moule says another key aspect is the continuous need for adequate training and supervision of personnel, housekeeping, regular checks and inspections. In addition, accountability at each level of the operation can insure against unnecessary deterioration of equipment and systems.
Trends Asked about trends in the industry, he is quick to point out that all businesses are different, and it is a mistake to believe that the latest trend is necessarily the best solution. Especially since such trends have the habit of following ‘fashion’. “In general though, racks have become higher, aisles have become narrower as handling Alan Moule, divisional equipment has become more manager at Modula System Logistics
Actual racking and shelving hardware in its basic form has not changed much in six decades 40
TWA | Mar/Apr 2014
sophisticated, and automation – though slow to follow in the footsteps of Europe, the US, etc. – is inevitably becoming more widespread. “Actual racking and shelving hardware in its basic form has not changed much in six decades. The ways in which it is used, however, is constantly changing and the bespoke application of solutions is the key to how these basic systems are utilised.”
Intensities Moule concludes: “In nearly every situation there is inevitably a huge waste of space. With respect to large unit loads, i.e. pallets, the floor space dedicated to the movement of handling equipment is invariably greater than that used for actual storage. “Smaller items such as spares, accessories and highvariety, low-volume products are usually stored very inefficiently in conventional shelving. Storage ‘intensities’ can only be improved by addressing the above issues.”
WAREHOUSING
Customer up-time increases profitability For downtime to be kept to a minimum, it is crucial that a transport operator’s truck manufacturer has the relevant parts available within a short period of time. If the truck is not on the road, the operator is not generating profits. By Simon Foulds
S
EXPANDING PARTS
CANIA SOUTH AFRICA knows how imporOPERATIONS tant it is for its customers to get the highest At the end of the 80's, Scania’s possible uptime on their vehicles. Which is why parts operations were centralized in Södertälje (Sweden), 30 kilometer the company launched Scania South African south of Stockholm. More than 95% Parts Center, ZAPC, in January this year, with the wareof all Scania products were – and still house based in Johannesburg. are – exported and a new parts center, Based on the Scania’s European concept, which has closer to the markets, was needed. At its main parts logistical hub in Belgium, the South the same time, borders in Europe were no longer a hindrance to transport. An African operation aims to ensure availability of opportunity arose to deliver no longer parts within 12 to 24 hours, depending on via importer warehouses, but directly where it is required. to dealers and workshops. Lars Lindgren, parts logistics director at Scania in South Africa, says: “Our mission is to provide the best possible logistics services to the retail network. Availability of parts is critical for our customers to ensure their Scania vehicles and engines are up and running in the shortest Relevant parts possible time. are available “We have quite ambiwithin a short tious targets for availability of parts at our cenperiod of time tral warehouse and at our retail points. And through our stock management systems, we will ensure customers obtain the parts with the shortest possible lead time, yet able to satisfy our cusmaintaining our cost levels. tomers’ requirements. Our mission is to ensure our cus“We are aiming at a 90% parts availability directly from tomers remain profitable at all times. We do not sell parts; dealer shelves and a 95% parts availability from the central we are selling lead times, which is extremely important for warehouse. In Europe we talk about a 99.5% availabilour customers.” ity within 12 hours. I do not think 12 hours is feasible for the sub-Saharan region, especially in the rural areas; however, we will strive to ensure parts are at our customers workshops within 12 hours if they are situated in metropolitan regions.” Scania Parts Logistics in South Africa is responsible for supplying parts for operators in South Africa, Namibia, Botswana, Tanzania, Mozambique, Zimbabwe, Zambia and Malawi. “Because Scania sells a business Lars Lindgren, parts logistics solution to its customers, we believe director at Scania in that through this parts centre we are South Africa
“We are aiming at a 90% parts availability directly from dealer shelves and a 95% parts availability at the central warehouse.”
TWA | Mar/Apr 2014
41
COAL TRANSPORTATION AFRICA SUMMIT Date: 8 & 9 April 2014
Venue: Gallagher Estate, Midrand
CONFIRMED EXPERT SPEAKERS KEYNOTE ADDRESS Tau Morwe &KLHI ([HFXWLYH 2I¿FHU TRANSNET NATIONAL PORTS AUTHORITY (TNPA)
Marissa Damons &KLHI ([HFXWLYH 2I¿FHU PORTS REGULATOR OF SOUTH AFRICA
Brenda Horne-Ferreira )RXQGHU 3DVW &KLHI ([HFXWLYH 2I¿FHU MAPUTO CORRIDOR LOGISTICS INITIATIVE
Anand Moodliar &KLHI ([HFXWLYH 2I¿FHU BARBERRY
Andre Botha Group Logistics Manager EXXARO
Moshe Motlohi Head Of Strategy TRANSNET PORT TERMINALS
NEIGHBOURING PERSPECTIVE Hon. Fred Moyo Deputy Minister ZIMBABWE MINISTRY OF MINES AND MINING DEVELOPMENT
Lebogang Letsoalo General Manager Supply Chain SASOL
Charles Siwawa &KLHI ([HFXWLYH 2I¿FHU BOTSWANA CHAMBER OF MINES
STRATEGIES TO BE DISCUSSED INCLUDE: Tackling South Africa’s coal transport challenges and emerging opportunities within the global market
Addressing the regulatory landscape in South Africa with regard to coal
The importance of regional cooperation for coal transport solutions for a landlocked country
When you attend an ITC conference you will receive the most updated speaker presentations on USB instead of paper based workbooks.
CONFERENCE HIGHLIGHTS
12 Expert Speakers Neighbouring perspective from Botswana and Zimbabwe
Considering PPP as a way to speed up investment in rail infrastructure
Reducing Our Carbon Footprint
Andrew Marsay Transport Economist JOHNSTAFF AFRICA
Victor Rakabopa General Manager Operations HWANGE COLLIERY
6L¿VR 1]LPDQGH General Manager Coal Business TRANSNET FREIGHT RAIL
Comparing South Africa and other emerging coal exporters in Africa
Transporting coal from port to pit seamlessly
Engaging parastatals and government departments to
What Delegates Had To Say About Our Previous Mining Conference: “It is an informative, interactive and good networking session for professionals.” Divisional Environmental Coordinator, ANGLO AMERICAN ³7KH FRQIHUHQFH SURYLGHV D GLYHUVL¿HG talent and knowledge resource pool.” SHE Manager, BLACK MOUNTAIN MINING
ensure the swift and timeous movement of coal
Leveraging on new technology to expedite the transport of coal
“The conference gave me a good understanding of the environmental input to the subject matter.” Engineer, MACCAFERRI SA ITC is a proud member of The South African Quality Institute
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AIR CARGO
The A380 greenest export flight On 20 January 1932, the first air cargo service between London and Johannesburg was undertaken by IAG Cargo with a DH66 De Havilland Hercules. Now the same route is being undertaken with the new A380. Simon Foulds was onboard the A380 as it flew from Johannesburg to Durban and back on a Thursday afternoon.
W
HILE AT 39 000 FEET, he spoke to Tony Snell, regional commercial manager Middle East and Africa at IAG Cargo, to find out how the A380 is going to benefit South African exporters and freight forwarders. “With regards to verticals, while we support any industry, the A380 is of particular interest to businesses in the pharmaceutical and perishables industries due to its airconditioned hold, which is well suited for the transport of temperature-sensitive goods,” says Snell. “For business people in these industries, the main benefit is that they have greater peace of mind knowing that their goods will arrive in perfect condition, due to the fact that we can now set and maintain hold temperature to within a one degree Celsius accuracy. “With the advances in hold technology, we can create even better environments to reduce chances of spoiling and help cut waste. As so many of South Africa’s exports are perishable goods, the benefits of being The Airbus A380 is a able to better control temdouble-deck, wide-body, perature using both hold air four-engine jet airliner conditioning and our dedimanufactured by Airbus. It is the world's largest cated perishables product, passenger airliner; many Constant Fresh, cannot airports have upgraded be overstated.” their facilities to The A380 is one of the accommodate it because greenest aircraft to operate of its size.
Fast fact
on the South African route and is the first aircraft to have an improved maximum take-off weight, 12 1 tonnes heavier than other A380s curren currently flying, allowing it to carry more cargo. Snell says the co company has purchased two additional ULD positions in the hold, allowing the company to offer South African clients greater flexibility over o the loads they can ship on any flight. From March 2014, the A380 will offer o six services a week between Johannesburg and London. Londo This is in addition to the current 11 weekly flights offered by IAG Cargo on British Airways Boeing 747-400. “The A380 perfectly complements the existing B747 flights we operate in the region because it provides customers with a modern ‘green’ cargo option ideal for shipping fruit, vegetables, flowers and other perishables to our Heathrow hub,” says Snell. “South Africa is one of our longest-standing markets and we have been flying there for over 80 years. This Tony Snell, gives us deep insights into regional commercial manager Middle the region, built up through East and Africa at IAG Cargo generations of experience, helping us to serve our customers there to the best of our ability. “Over the eight decades of working in South Africa, we have also built up excellent customer relationships and as anyone in our industry can tell you, such relationships are crucial for continued success. As the market grows we are committed to continue working with our customers and investing in our operations, as can be seen both by the A380 service as well as the additional capacity we will provide on our Cape Town/Heathrow route from May.”
The A380 is one of the greenest aircraft to operate on the South African route
TWA | Mar/Apr 2014
43
AIR CARGO
Airfreight markets make a strong start to year The International Air Transport Association (IATA) has released the January performance data, which shows a strong rise in airfreight growth compared to a year ago.
G Tony Tyler, director general and CEO, IATA
LOBAL FREIGHT tonne kilometres (FTKs) rose 4.5% in January compared to January 2013. This is a significant acceleration on the 2.2% year-on-year growth rate recorded in December and is well above the 1.4% full-year growth reported for 2013 as compared to 2012. Growth was solid across all regions, with Middle Eastern carriers growing the fastest (10.7%). European airlines continued to benefit from Europe’s recovery from recession, posting 6.0% growth. Carriers based in the AsiaPacific region, which account for nearly 40% of the global airfreight market, reported 3.8% growth. This represents a major improvement over the 1.0% contraction in 2013. “The “Th improvement in demand is good news. It is a step step-up in pace from the mild strengthening that we saw towards the second half of 2013. And in real terms, volumes are similar to the 2010 postre recession peak. But there is also ample reason to be cautious. Protectionist measures are part of the reason for a slower expansion of world trade than we would expect from current levels of industrial production. Companies continue to reorganize supply chains in their efforts to move manufacturing on-shore,” says Ton Tony Tyler, IATA’s director general and CEO. “This “T positive start to the year will set an upbeat tone for the World Cargo Symposium in March. The key objective for this year must be for cargo airlines, shippers and ffreight forwarders to seize opportunities to improve the industry’s value proposition. They can do this by investing in new quality procedures to improve the efficiency, security and reliability of airfreight. The e-Freight programme for paperless shipments is essential for that, and the new quality benchmarking
Africa airlines grew ahead of the average trend in 2013
process, which we will reveal at next week’s symposium, is vital for improving quality across the board,” says Tyler. According to IATA, African airlines grew ahead of the average trend in 2013, reporting a 4.1% rise in FTKs compared to a year ago. With signs of growth slowing in South Africa and other major regional economies, freight growth could still be sluggish over the next few months. Capacity grew almost in line with demand, expanding 3.9% compared to January 2013.
Next-generation air cargo electronic messaging standards IATA has released its second edition of the Cargo-XML Manual and Toolkit, providing Cargo-XML standards for the electronic exchange of information that replace traditional Cargo-IMP for the air cargo industry. The toolkit provides electronic message standards that ensure uniformity, clarity, accuracy and economy in electronic data exchanges. The new Cargo-XML standards are multimodal and cross-border, and are based on UN/CEFACT standards and referencing the World Customs Organisation (WCO) Data Model elements.
Index to advertisers Africa's Open International Forwarders Meeting 26 Barloworld Logistics 34 Cargo Carriers 4 Coal Transportation Africa Summit 42 DigiCore OBC Drive Report 14
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TWA | Mar/Apr 2014
Emirates SkyCargo Imperial Logistics Inter Africa IVECO MAN Truck & Bus MiX Telematics International Scania South Africa
IFC 10-11 31 24 22 16 OFC
Scania South Africa Scania South Africa SDV South Africa Shell SA Supportech/Inkwazi Tracking SAPICS
12 IBC 30 3 18 37
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