Transport World Africa July/August 2015 by 3S Media

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Intraregional supply chain solutions from producer to consumer

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Supply Chain Logistics Infrastructure challenges

Regional Profile

Operating in Namibia

faw trucks New 8.140 FL Medium Truck TAKING A STAND

Sharmini Naidoo, CEO, Road Freight Association

“The threat to the trucking industry has never been more apparent.” P10 ISSN 1684-7946 Vol. 13 No.Vol. 4 / 11 R50.00 VAT incl. VAT ISSNJuly/August 1684-79462015 Mar/Apr 2013 No. 2incl. / R40.00

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Profile

Operating in Namibia

Intraregional supply chain solutions from producer to consumer

COVER STORY FAW Trucks – New 8.140 FL Medium Truck

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TAKING A STAN D

Sharmini

Naidoo, CEO

to the truc

, Road king industry Freight Associ atio has never been mor n e apparen t.”

ISSN 1684-79 46 July/Aug ISSN 1684-79 ust 462015 Mar/Apr Vol.

2 4 6 8

Editor’s Comment Colaborate and listen FESARTA A sustainable future Cover Story FAW Trucks Regional News

Sharmini Naidoo CEO, Road Freight Association “The threat to the trucking industry has never been more apparent.”

P10

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TRAILERS Trailing behind FLEET MANAGEMENT A fine track record Mixed messages Industry needs a wake-up

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13 2013 No.Vol. 4 / 11 R50.00 No. 2incl. / R40.00 VAT incl.

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Ready, genset, go

Resistance is fertile

New summit reached

TYRES

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supPly chain logistics Reining in complexity Truckload of solutions RAIL On the line REGIONAL PROFILE Focus on Namibia WAREHOUSING Grow some backbone LABOUR New face of employment LEGISLATION Take a load off Cubed route AIR CARGO Air freight facing headwinds

28 30 32 34 36 37

38 39 40

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TWA | July/Aug 2015

Editor's comment

Collaborate and listen O

Editor on standby at the RFA convention

f course, there is some merit in working independently, but no one and no business can exist entirely in a vacuum. At some point or another, everyone needs someone’s help, input, or perspective. And we all need a compass, moral or otherwise, occasionally. It is worrying, though, that consultation and engagement between major stakeholders in the transport industry and the Department of Transport is not as frequent, nor as meaningful, as it used to be. One of the unfortunate outcomes of this has been the passing of bills and gazetting, for public comment, of radical new legislation that will have serious implications for logistics and transport, ultimately driving up the cost of doing business in South Africa. Imagine, if you will, how different things could’ve been if the government had engaged more with the public and other stakeholders on the issue of electronic tolling in Gauteng. Recent marketing spin suggests the government has now listened to motorists and the result is a revised e-tolling dispensation. But, much back and forth – including to the High court – could surely have been avoided. Using e-tolling as the backdrop, it will be interesting to see how the practical implications of the new consignee/consignor legislation, passed in February, will play out. That particular piece of legislation is intended to reduce incidences of heavy vehicle overloading, which has reached alarming levels. But, while the department’s intentions are good, the consultation process with industry hasn’t been. The same criticism can be levelled at the muted peakhour, public road truck ban for vehicles with a GVM over nine tonnes, intended, wrongly or rightly, to curb the amount of truck accidents. There are further plans in the pipeline to clamp down on high cube container transportation by road because, currently, the combined height of trailer and high cube container is above permissible limits. All of these issues are documented in this edition of Transport World Africa, which was produced in consultation with experts in their respective fields. Furthermore, it has been a real pleasure to have attended a number of industry events, conferences, and conventions in recent weeks, all of which required a tremendous amount of collaboration to have been the successes they were.

Tristan Wiggill 2

TWA | July/Aug 2015

Publisher Elizabeth Shorten Associate publisher Nicholas McDiarmid Editor Tristan Wiggill • tristanw@3smedia.co.za Head of design Beren Bauermeister Designer Ramon Chinian Contributors Brenda Horne-Ferreira, Doug Kuni, Eugene Herbert, Loane Sharp, Mike Fitzmaurice, Steven Sutherland Chief sub-editor Tristan Snijders Sub-editor Morgan Carter Client services & production manager Antois-Leigh Botma Production coordinator Jacqueline Modise Marketing and digital manager Esther Le Roux Marketing specialist Philip Rosenberg 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 Glynis Dietrechsen • glynis@3smedia.co.za t +27 (0)11 233 2600

No. 9, 3rd Avenue Rivonia PO Box 92026, Norwood 2117 t: +27 (0)11 233 2600 f: +27 (0)11 234 7274

www.3smedia.co.za Annual subscription: R300 (incl VAT) subs@3smedia.co.za ISSN 1684-7946 © Copyright 2015. All rights reserved. All articles herein Transport World Africa are copyrightprotected and may not be reproduced either in whole or in part without the prior written permission of the publisher. The views of the authors do not necessarily reflect those of the publishers or FESARTA.

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Very good shape showing minimal overlay removal and no copper underlay showing.

The final inspection overall showed a clean engine with minimal deposits and wear on the key engine components. The pistons showed minimal deposit buildup on the crown and top ring land zone. The camshaft lobes showed excellent wear protection and no visible wear scars on rollers or rocker arms. Bearings also were in very good shape with only small amounts of overlay removal – excellent for an engine with this many kilometres at high load.

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fesarta COMMENT

Mike Fitzmaurice, CEO, FESARTA

A sustainable future

The focus, for FESARTA, going forward is to ensure the future sustainability of the association.

ABOVE & BELOW

FESARTA aims to document transit times from port to destination throughout the Southern and East African regions

p until now, Barney (Curtis) has been FESARTA. He’s kept it together and developed and maintained its credibility, which has been crucial. The association needed that credibility because, without it, it couldn’t have done the things it did, nor what it still aims to do. The new FESARTA office will be ready early next year and will be based in Port Elizabeth, but we will still maintain a presence in Gauteng, by way of a monthly three- to five-day visit, depending on workload. Apart from administrative work, the association has, in the interim, been dealing with non-tariff barriers and a range of other issues affecting different countries. SADC has now officially recognised the new FESARTA administration. Another regional transport association has been created in East Africa based in Nairobi – FEARTA – but it is not recognised by the sub-Saharan Africa Transport Programme, which is mandated to work through FESARTA. As I write this, the association is focusing its attention on attracting corporate membership. A major logistics service provider is already on board. But, we are not only looking at logistics service providers; we want to attract all heavy commercial vehicle manufacturers selling vehicles in Africa. Barney has done some groundwork on this already. Corporates will benefit from membership of FESARTA in a number of ways. Their logo, with a company description, will appear on the home page of the FESARTA website. The member’s logo will be used on marketing material for the 2016 Road Transport Forum and they will have a voice at regional forums, attended by FESARTA’s National Road Transport Association (NRTA) members. These members will have direct access to the NRTAs and their road transport members in East and Southern Africa, and will have access to our contacts database. They will also have access to the Corridor Information Platform, which includes information about corridor transit times, border post crossing times, port loading times, and corridor bottlenecks. Members will receive relevant information on regional road transport, including updated schedules on vehicle load limits and dimensions, regional forums, business opportunities,

TWA | July/Aug 2015

and important projects. Their views on changing or preventing change to legislation at a regional level in East and Southern Africa will be heard. Information will be disseminated to all members’ subsidiaries and their dealers, and help will be provided to solve problems faced by transporters, importers/exporters, and freight forwarders along corridors in East and Southern Africa. Membership will complement affiliations or other working relationships that the member may already have with relevant NRTAs in their respective country. NRTA membership provides members with information and services pertaining to their country, with FESARTA membership extending that offering to the East and Southern African region as a whole. Before it closed, Trademark South Africa (TMSA), in association with Comesa and Crickmay, operated a GPS system that monitored cross-border transit times. When TMSA closed, the project was decommissioned. We believe that FESARTA should recommission this project. Our intention is to expand it so that we cover the Walvis Bay Corridor Group; MCLI; the Beira, Dar, and central corridors; and the Northern Corridor, from Mombasa, through Uganda and into Rwanda. We want to develop a secure, subscriber-based database for the entire Southern and East Africa region, which will document dwell times at ports, corridor travelling times, and delays at border posts. In fact, the goal is to provide just about any information on any corridor in Southern and East Africa – from the port through to final destination. This will be made available to anyone, subject to an affordable fee, which is yet to be established. I’m hoping that we can develop this system further, possibly on to an Android or similar platform, to allow full mobile access. This will give drivers the opportunity to post comments should they come across something troublesome or unexpected on their journeys. We want people to be able to contribute and share information, to the benefit of all. Last, but not least, is the trucker’s forum, which we plan to have in Johannesburg, in 2016. We would like to extend these forums to other regions as well and there is the possibility that we could have one of these in Nairobi or Mombasa, subject to securing necessary sponsorships and the like.

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Cover story

FAW LANDS

faw trucks

KNOCKOUT BLOW FAW Vehicle Manufacturers SA has launched a new medium-weight truck range engineered for the local market, built on South African soil for Southern and Central African markets.

EO Yusheng Zhang explains the ration-

Local is lekker

ale behind the introduction of a new, precision-designed, medium-sized truck range.

Imported from parent plants as SKD kits, the cab, chassis, axles, and other sub-assembly components, together with the imported Cummins ISF engine and the ZF transmission, are all neatly assembled in the new Coega plant. The plant employs over 100 staff, all of whom have been trained and upskilled. As demand for the new range and the existing heavy and extra-heavy FAW trucks increases, new job opportunities will be created. “The introduction of the FAW 8.140 FL follows closely on the international introduction by our China-based parent company. “We did this so local customers can experience FAW’s latest technological advances built at international quality levels,” explains Zhang. The FAW 8.140 FL will be available in a number of body derivatives – a drop-side, a taut-liner option, a van body, a tipper, and a rollback or dry-freight insulated body. Customers may choose to buy the chassis cab and fit their own truck bodies to suit many other applications, up to a GCM of 14 tonnes.

“Our decision was based on customer demand and market opportunity. Our market analysis confirmed the need for a vehicle as durable and rugged as our heavy and extra-heavy trucks, but with smaller dimensions to handle a different working environment. “We’ve had a presence in South Africa since 1994, so this year marks our ‘rite of passage’. Throughout this period, we have demonstrated our commitment to this country and to our loyal customers.” FAW’s total local investment is now in excess of R800 million. “This includes our truck body building facility, which opened in January this year, and our manufacturing plant, commissioned in July last year.”

New player

ABOVE Faw's new 8.140 FL mediumweight truck

FAW took a strategic decision to redesign and re-engineer the Chinese version of the truck for local demands, paying special attention to cost-efficiency, payload, and turnaround time, without forgetting its durable and reliable build standards. “The FAW 8.140 FL carries all the hallmarks for which FAW trucks are renowned, namely strength, reliability, easy operation, and, most importantly, delivering on the promise of a ‘truck built for Africa, in Africa’.”

TWA | July/Aug 2015

Feature-rich The parallel chassis frame and smooth top flange chassis construction has a distinct low-weight advantage, especially when mounting a steel sub-frame

Cover story cargo body. The locally built chassis passes through a special paint station to enhance dust and dirt endurance and longevity – a uniquely South African addition. Straight ladder-type suspension with semi-elliptical leaf springs, together with front double-acting shock absorbers and rear auxiliary springs, are used. The axles, graded for a permissible 3 tonnes in front and 6 tonnes at the back, provide ample carrying capacity. The cab is a forward 45-degree tilt, cab-overengine design for easy servicing access. The digital instrumentation panel and driver controls are well placed. Materials used are durable and smooth, yet comfortable and sturdy. The 2 m wide cab allows for a three-person seat, with a foldable middle section. Radio and a USB connection are standard fitments. The FAW 8.140 FL is fitted with power steering, for comfort and driveability. The front windscreen, as well as slanted side windows, offers an exceptional scope of sight, while mirrors are neatly positioned and of ample size to provide a good view to the side and rear of the vehicle, all enhancing driveability and safety.

Drivetrain In a business environment, where total cost of ownership is always top of mind, it has become imperative that the most cost-effective combination drivetrain be engineered to deliver the best levels of efficiency and durability. Adding to its international pedigree, the FAW 8.140 FL is fitted with the Euro 3 Cummins ISF 3.8 l engine. This high-pressure, common-rail four-cylinder in-line engine is one of the latest from Cummins’ reputable engine range, and is ideally suited to the mediumweight truck category. Benefits include exceptional performance, low operating costs, low weight, low noise, and low emissions capabilities. The six-speed synchromesh manual ZF 6 S 500 TO Ecolite transmis-

“The FAW 8.140 FL is a ‘true-blooded South African’, built locally and uniquely engineered for the African environment.” sion is a great match, taking full advantage of the Cummins powerhouse, while adding easy driveability and full driver control. The ZF transmission adds to the mix a long tradition of technological innovation aimed at overcoming commercial vehicle challenges. Torque is a healthy 450 Nm between 1 200 rpm and 2 200 rpm, while a solid output of 105 kW is on tap at 2 600 rpm. Thermal engineering has made the engine capable of running at higher operating temperatures, reducing the size and cost of the vehicle’s cooling package. The modular architecture of the engine allows for easy access and single-side servicing, reducing operating costs. A waste-gated turbocharger provides excellent performance across the whole rpm range, as well as good response through higher low-end

torque. The four-circuit protection valve, full air brake system – with ABS – is easier to maintain than vacuumhydraulic or air-hydraulic braking systems, and is invaluable to the safety of the driver, truck, and payload. Further international componentry extends to a Wabco solenoid valve system, a Thunhil gearshift, and Clarcor air and oil filters.

FAW 8.140 FL highlights •L owest cost per tonne in the medium truck segment •C ummins ISF 3.8 ℓ with Euro 3 pedigree •Z F 6-speed manual transmission ensures reliability •F ull air dual-circuit brakes with ABS.

Versatile With the FAW drop-side body, this exceptional workhorse can take the punch in general cargo on any metropolitan distribution hub. As a van-bodied vehicle, the FAW 8.140 FL provides a stable and safe conveyor of protected cargo, be it in express deliveries, general distribution, or for dry-weight cargo. Running as a tautliner unit, it has the manoeuvrability to work in tandem with any application handling palletised loads. As a roll-back, this truck is ideal to pick up and carefully transport a passenger car to its destination. When matched with dry freight or an insulated body, the truck is a perfect fit for operators transporting sensitive goods. As a 3.5 m3 tipper, it can keep pace with the construction industry.

Aftermarket The new range enjoys a two-year/unlimited kilometre warranty, and sales and/ or service support from 36 local representative outlets across South Africa, Namibia, and Botswana. Angola, Zimbabwe, Kenya, Tanzania, Zambia, and Uganda draw on FAW in South Africa. The Spartanbased national parts distribution centre is supported by branches in Durban and Cape Town, which act as hubs to support all FAW representatives and self-service operators.

ABOVE The comfortable FAW 8.140 FL interior

Pedigree Introduction of FAW’s medium-weight truck range sets the bar ever higher, with respect to recent automotive investment and expansion in South Africa. “The FAW 8.140 FL is a ‘true-blooded South African’, built locally and uniquely engineered for the African environment. Following a growing number of ‘firsts’, we continue on our African journey to create a proud legacy for FAW Vehicle Manufacturers SA,” concludes Zhang.

www.faw.co.za

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 Glynis Dietrechsen on +27 (0)11 233 2600 or email her at glynis@3smedia.co.za to secure your booking.

TWA | July/Aug 2015

Regional News

Read more on www.transportworldafrica.co.za

south africa

Transnet concludes R30 billion funding loan

Chinese locomotive to be Officialsprocured inaugurate by Transnet the bus service

SADC

Trans-Kalahari Corridor road network assesed Stakeholders from Namibia, Botswana, and South Africa recently conducted a road safety assessment on the Trans-Kalahari Corridor (TKC). The aim of the road assessment was to provide an overview of the road infrastructure, map border processes and procedures, and give stakeholders a chance to observe the movement of cargo and identify bottlenecks. Stakeholders were said to be impressed by the current road conditions between Walvis Bay and the Trans-Kalahari border post. The Namibia Roads Authority is tasked with continuously maintaining and upgrading the roads on the Namibian side of the corridor. Botswana’s efficient border processes received praise from the stakeholders, as well. A state-of-theart weighbridge, able to weigh an entire truck and trailer, is being installed at the Pioneer Gate weigh station on the South African side of the corridor, in an effort to increase further efficiencies. Stakeholders are expected to formulate a report underpinning their findings and proposing actions to improve impediments identified along the corridor, in order to ensure the smooth and efficient transportation of cargo along the TKC. The last road assessment done on the TKC took place in April 2010.

South African state-owned transport firm Transnet has concluded a R30 billion loan facility agreement with the China Development Bank (CDB). The loan will be used for the funding of hundreds of locomotives to be procured from China South Rail and China North Rail, just two of four successful bidders to build Transnet’s new locomotives. The loan is part of a bilateral memorandum of understanding (MoU) signed between South Africa’s president, Jacob Zuma, and his Chinese counterpart, President Xi Jinping. The

two heads of state signed a $5 billion MoU in December 2014, cementing bilateral relations between the two BRICS partners. The proceeds of the loan will be used to fund the company’s 232 diesel and 359 electric locomotives. These locomotives are part of Transnet’s 1 064 locomotives acquisition programme. Transnet will draw the second tranche of the loan subject to market conditions and funding requirements, based on the projects included in the company’s R337 billion investment programme.

sadc

Maputo rings road delayed again Carlos Bonete, Mozambique’s Minister of Public Works, says completion of the Maputo rings road has been delayed again – this time until December 2016. The road, which is being built by the China Road and Bridge Corporation (CRBC), was supposed to be finished during the first half of this year. Bonete recently paid a visit to the construction site, where he explained that the nature and complexity of the contract had caused the latest delay. The rings road was

originally planned to open in December 2014, but that deadline was exceeded due to resettlement problems of the families living in the area. The project, costing an estimated $315 million, includes the construction of a 74 km road that will create a new north-south axis (between Miramar Beach and the village of Marracuene), and will involve building six bridges and three junctions that will allow traffic flow on National Highway 1, on the Zimpeto-Marracuene stretch.

Road conditions on the Trans-Kalahari Corridor between Walvis Bay and the Trans-Kalahari border boast impressed stakeholders

TWA | July/Aug 2015

regional news sadc

EAST AFRICA

Kenya to introduce tight screening measures

Chirunda road rehab nears completion The Turnpike turn-off on Lusaka’s 51 km Chirunda road, in Zambia, has been completed; while rehabilitation work on the pavement; construction of a Jersey barrier, traffic circles, drainage structures and road markings; and the erection of road signs continue. The road project was undertaken in two sections, with the road divided with a median to remove right turns.

A grassed medium of 3.5 m will be incorporated from the Makeni turn-off to the Lamasat shopping centre roundabout. Another barrier, 0.8 m in length, is due to be constructed at the Chilanga filling station. It is intended that the Chirundu road project will help ease the movement of goods and people on the road that forms part of the country’s T2 highway.

WEST AFRICA

Bissau promised dry port by end 2017 Guinea-Bissau’s State Secretary for Transport and Communications, João Bernardo Vieira, says the West African country will have a dry port on the outskirts of the capital city Bissau by the end of 2017. Container capacity at the port is promised to be in excess of 100 000 TEUs per annum and it will occupy 25 000 m2. It will include warehousing facilities to conserve perishable products. Meanwhile, Fernando Dias da Costa, director-general of the projectowning National Shippers Council (CNC), states that ground clearing work is currently underway. The dry port,

or inland customs station, is set to have an overland link to the maritime port that does not pass through the city centre, thereby preventing traffic congestion. Da Costa says that the new infrastructure will ease the situation at Bissau’s Pinjiguiti port, which has limited space for containers. The dry port will also serve as a parking area for container trucks waiting their turn to load cargo at Pinjiguiti. Besides its trans-shipment role, Bissau’s future dry port may also include merchandise handling facilities and road transport maintenance equipment, as well as customs clearance services.

Kenya is set to introduce tight screening measures on imports, sparking fears of a slowdown of cargo clearance at the Mombasa port. Treasury secretary Henry Rotich says measures to be implemented from July will see nearly 50% of import cargo scanned. At the moment, only 5% of the imported consignment is scanned. “We have made plans to acquire state-of-the-art scanners to be stalled at the Port of Mombasa,” Rotich says. “We know goods have to move fast, but the issue of security has also become very important to us,” he explains. Rigorous scanning is likely to lengthen the time it takes to clear imports at the port. Kenya currently beats most of its East African neighbours by the faster pace at which it clears imports and exports at its ports and borders The World Bank’s Doing Business 2015 report indicates that it takes 26 days, at a cost of KSh226 000, per container, to clear imports in Kenya. By comparison, it takes 27 days, at a cost of KSh480 000, per container to clear imports in Rwanda and 31 days, at a cost of KSh324 000, to clear goods coming into Uganda.

New screening measures may slow down operations at Mombasa port

The new dry port outside Bissau will have an overland link to Pinjiguiti port, bypassing the capital city

TWA | July/Aug 2015

COMMERCIAL VEHICLES

Taking a stand Tristan Wiggill joined South Africa’s trucking fraternity at the Road Freight Association’s annual convention, held over three days in late May at the Champagne Sports Resort in the central Drakensberg.

hile the 60s-themed gala dinner, gymkhana, radio-controlled truck competitions, truck displays, golf challenge, and driving simulators provided light entertainment, the conferences were hard-hitting affairs that raised a number of important issues. In her opening remarks, Road Freight Association (RFA) CEO Sharmini Naidoo said that the threat to the trucking industry in South Africa had never been more apparent than it is today. Truck centricity was the theme of this year’s event. “Truck centricity is a conference centred on the hard-hitting issues affecting the trucking industry and there certainly are many,” she said. Naidoo listed proposed truck bans; reduced driving hours, without reduced pay for drivers; reduced speed limits; loadshedding; new consignee/consignor legislation; volatility and unpredictability of the labour market; government intervention to outsource non-core operations with preference given to employees; contribution to a dedicated road infrastructure fund slipped into the proposed BBBEE Charter; funding of government agencies and structures; and AARTO as major issues facing the industry. “What’s next?” she asked. “What more does an already over-regulated industry have to contend with? We’re seen as the ‘bad boys’ in the industry on the roads that take lives and occupy motorists’ space – not to mention contaminate the air,” she lamented. Naidoo went on to say that the trucking industry in South Africa was not recognised for the “valued and meaningful” role it plays in the economy and its positive contribution

TWA | July/Aug 2015

to the country’s GDP. However, she admitted there were thorns among the roses. “We have to acknowledge that the lack of professionalism in the industry, by some operators, has cast the industry in a negative light. Overloading, [the] operation of unroadworthy vehicles, and intimidation of drivers to drive unmaintained vehicles and to exceed driving hours has done a lot to damage the already waning credibility of the industry,” she conceded. Naidoo said the RFA was perturbed by recent comments made by the Department of Transport (DoT). “Their indication that they will legislate as they see fit is a sign of what’s to come. More importantly, we have seen legislation coming into effect that has already been decided upon by the legislator, with consultation being a mere procedural process,” she added. “We have learned that consultation is simply a regulatory process rather than a negotiation. “There is no obligation to justify proposed legislation or to consider the stakeholders’ concerns. It is the legislator’s right to legislate and regulate. However, it must do so in order to achieve a legitimate purpose, with the acid test being whether the legislation serves a legitimate purpose and whether there are means to achieve such. In many instances, this is highly questionable,” she said. “New legislation – such as the proposed truck ban – will not achieve the desired outcome of reducing road carnage, congestion, and emissions. In fact, it will more than likely create the opposite effect. Something as simple as more effective law enforcement would be a better solution,” she proposed. Continuing, she said, “The threat to the trucking industry has never been more apparent. The

Commercial Vehicles need for the industry to stand together and prevent the effects of harmful legislation has never been so great. It is essential that industry views are taken into account.” Naidoo later urged the trucking fraternity to participate in the conference so that its views could be heard and translated into the RFA’s lobbying strategy. “The RFA is your voice and speaks on your behalf,” she concluded.

and vehicle roadworthiness examiners. The Department of Transport, meanwhile, wanted the RFA to sort out badly skilled drivers and unroadworthy vehicles, cease the abuse of drivers, stop the employment of foreign drivers, expand trucking into the SMME market, put an end to ‘road carnages’ and vehicle overloading, and support a multimodal transport system.

Roles and responsibilities

Tough talk

RFA’s technical and operations manager, Gavin Kelly, presented ‘Professionalism in the road freight industry’, in an attempt to clarify the role and responsibilities of the association. Kelly said much confusion exists about the RFA among the public and even within government departments. He said the association represents road

Political commentator and columnist Aubrey Matshiqi entertained the audience with a candid take on the country’s present and future political landscape. He spoke about xenophobia, the emergence of Mmusi Maimane, and the generally poisoned political discourse occurring in the country. He also provided insight into recent

freight operators in South Africa and that its core focus is to deal with issues affecting operators. He explained that the RFA is funded by its members and assisted by various fundraising initiatives. Kelly said RFA members believed the RFA to be a source of assistance in legislative matters – in that it provides legal defence – is a source of general industry information, lends support to labour matters, and is a voice that protects its members’ interests. However, he explained that it is a relatively unknown entity among the public, who have little idea of its role, frequently confusing it with the RAF and mistakenly taking it for a government agency. Of more concern to him is the government’s perception of the association. Kelly said the public sector views the RFA as a strong opponent that is prepared Sharmini Naidoo, RFA CEO to challenge legislation in the courts. While conceding that assertion to be somewhat true, government, he said, also believes the RFA to be a research organisation and source of economic impact data because it uses the services of an economist. According to Kelly, there is a perception in government that the RFA protects its members’ interests to the detriment of government policy. While it is also considered a reliable source that offers meaningful input on transport and traffic legislation matters, government considers the association to be elitist and exclusive. He said that government mistakes it to be an agency that, among other roles, trains truck drivers

developments within Cosatu and transport sector trade union Satawu. This was followed by a panel discussion on the much maligned consignee/consignor legislation and the practical implementation thereof, before the industry was given a sneak preview of the BBBEE Sector Codes for the road freight and logistics sectors by Imperial’s Sibongile Zikalala. Pete Giorgianni spoke about how companies in the road freight industry in the US and Canada were being incentivised through the SmartWay programme, which recognises, rewards, and encourages transport companies to reduce their fuel consumption and carbon emissions, make better decisions, and use a range of fuel-saving technologies and methods. Road safety experts, engineers, and accident reconstruction experts took to the stage to discuss a number of issues, from South African roads engineering, to driver training and monitoring, truck maintenance, selfregulation, law enforcement capacity, and the training of police officers. Independent oil and energy expert Doug Kuni spoke about the impact of loadshedding on the road freight industry, and the cost to the broader economy as a whole. before Frost & Sullivan’s Mani James wrapped up proceedings with a presentation detailing the megatrends that will affect the logistics and infrastructure sectors in Africa, moving towards 2020.

“Lack of professionalism in the industry, by some operators, has cast the industry in a negative light.”

Sharmini Naidoo Road Freight Association (RFA) CEO

TWA | July/Aug 2015

COMMERCIAL VEHICLES

Don’t treat maintenance like a spare part For transporters, cutting back on maintenance procedures is both unsafe and financially imprudent, writes Tristan Wiggill.

ising operating costs mean that some people are not renewing their fleets, unless they are forced to. Consequently, the average age of vehicles is increasing and the cost of maintenance rising. A stumbling block for operators using vehicles out of warranty and service plan is the pricing of replacement parts. Usually, OEM-manufactured parts are sold with a price premium over aftermarket replacement parts. This is because OEMs get them from tier one and tier two suppliers, and need to audit and check their quality and performance attributes. They also audit the entire manufacturing process. This all comes at a cost. Aftermarket replacement parts are identical in terms of quality, performance, and reliability. These parts also carry test reports from various independent test laboratories. Counterfeit parts, on the other hand, have no such reports. Nor do they carry comprehensive warranties. When one is replacing parts, the following needs to be considered: Counterfeit parts cost a fraction of OEM-manufactured parts because they are reverse engineered. These manufacturing processes are therefore flawed and the component’s tolerances and performance – as well as its material qualities – vary widely. Production personnel who put them together are often times not

With diminished functionality and performance, there is a greater risk of accidents very skilled, leading to a lack of consistency. Operators need to consider that, while counterfeit parts may initially cost a fraction of the cost of OEM-manufactured parts, they will likely cost more in vehicle downtime. These parts are likely to fail more regularly, have diminished longevity, and are generally unreliable. With diminished functionality and performance, there is a greater risk of accidents in which operators might lose cargo, damage property, or experience repudiations from insurers. As an operator, you have to decide if you can safely reduce costs when buying replacement

TWA | July/Aug 2015

parts for your vehicles. There are some loads with rigs on the road today that are worth R10 million. Why risk that trying to save R1 000? Sometimes, parts buyers don’t know what they’re buying. People buying replacement products are not always engineers. To some, a brake drum is just a brake drum. People buy parts in

TWA tip •N ever try to cut costs on safety-critical parts: brake drums, brake shoes, and disc callipers. •N ever buy products without knowing where they’re made, what the specifications are, and without a guarantee. good faith, from what they consider reliable sources, believing that a brake drum, for example, passes all necessary tests. At the same time, there is a drive to reduce the weight of vehicles, certainly in Europe and in the United States, where every kilogram counts. A brake drum should weigh between 48 kg and 55 kg, after machining. The brake drum’s wall thickness should be between 13.5 mm and 15.5 mm. The thinner it is, the more it expands, thereby reducing brake application. It is possible to take a few kilograms out of a heavy component, such as a brake drum – that is why people are doing it. But there are ways of doing it correctly: by speccing the right materials. It is also possible to negotiate discounts on parts pricing, dependent on monthly or annual purchase volumes. However, these discounts are often subject to high volumes of orders being placed with parts suppliers and this can be out of the realms of the smaller operator’s budget.

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Commercial Vehicles

ud trucks

Around the world in 80 years UD Trucks is celebrating its 80th birthday this year.

enzo Adachi founded Nihon Diesel Industries back in December 1935. The company is credited with developing the first Japanese-made diesel truck engine in 1938, followed by the first Japanese-made diesel truck, the LD 1, in November 1939. The story goes that Adachi himself took the LD 1 on a test drive of 3 000 km, later that year. Although Japan’s roads, at the time, were unpaved and the country was full of narrow roads and bridges, it was said that not a single bolt or spring came loose on that maiden journey. At the start of the 1950s, construction of infrastructure led to rising demand for large, high-horsepower trucks. In January 1955, two new diesel engines were released by the company: the three-cylinder 110 hp UD 3 and the four-cylinder 150 hp UD 4. The six-cylinder 230 hp UD 6, launched in June that year, was reported to be the most powerful engine in Japan at the time, as well as the lightest, per horsepower, in the world. The engines used ‘uniflow scavenging diesel engine’ technology – abbreviated to ‘UD’ – which has cemented the name and symbol on all engines and trucks produced by the company since. The 6 TW, launched in 1958, contributed to Japan’s infrastructure development during a period of rapid economic growth. It played a role in the construction of high-speed expressways, the bullet train, and high-rise hotels. The T 80 two-axle export version subsequently became a popular workhorse around the world. Johannesburg’s Stanley Motors imported South Africa’s first UD Trucks

– the T 80 and T 81 – in 1962. Local introductions of the UG 780, CK 10, and CK 20 followed. Many will likely recall the UG 780 engine, during the ADE era in the 1980s, as well as the CM range, which consisted of CM 10, 12, 14, and 16 derivatives. In the 1970s, a shift from mass production of single products to high-mix, lowvolume production occurred. Simultaneously, cold chain logistics blossomed. This led to a greater demand for medium-duty trucks capable of economical and efficient transportation over short and medium distances. The UD Condor, launched in Japan in 1975, met those needs and went through a global, full-model change, in 2011. Between 1998 and 1999, the company launched its extra-heavy vehicle range, with OE engines, in South Africa, becoming the first manufacturer to complete the transition back to original equipment. The company also embarked on its first venture into the 6x4 truck-tractor segment with the UD 430 WT and RF8 engine. It was the UD 440 series that signalled the start of a new age in the history of the company, as it made inroads into the upper end of the market – the first Japanese manufacturer to do so locally. In 2002, Nissan Diesel South Africa formally separated from the passenger car operations to become a dedicated trucking company, with 80% of the company owned by Nissan Diesel Motor Corporation in Japan and the balance held by Mitsui. The Escot transmission was first introduced into the market on the UD 290 WM and UD 400 KT, during 2004, and, at the same time, Nissan Diesel South Africa began offering maintenance contracts to customers. The Quon extra-heavy truck range was launched in 2008. The assembly plant was also revamped to double capacity, while the parts warehouse and training academy were upgraded. By 2010, the company’s entire range met Euro II emission standards. That year, the company name was changed from Nissan Diesel to UD Trucks Corporation, adopting UD Trucks as its unified brand name.

Not a single bolt or spring came loose on that maiden journey

The Quester is the first in a new line of 'global trucks' from UD trucks

TWA | July/Aug 2015

You’re not buying this. What you’re buying is so much more than a truck. It’s a commitment. A partnership. A whole solution designed and built around the working life of a vehicle, where Total Operating Economy is more important than just the initial purchase cost. Uptime is crucial. If the vehicle is not working, it’s not generating income. That is why the highest levels of reliability and durability are built into every model in our extensive range. As a one-stop shop, the complete vehicle is also supported by one of the most proficient service networks in SA. Offering the greatest availability of parts and assistance, whenever and wherever you need it. Payload is the next big thing. We have engineered our trucks to be the lightest yet strongest they can be. This is the key to offering the greatest payloads on the market. And then there’s the fluctuating cost of fuel. With Scania you can be confident that you are operating one of the most fuel efficient vehicles on the market. We can proudly say that this has been the case for decades. Adding all this up, also taking the cost of R&M, finance, insurance and residual values into consideration, you will understand why we focus on total operating economy. So if you’re just buying trucks, we’re probably not the supplier for you. But if you’re buying a partnership, a commitment, a total construction solution, then we should talk.

There is a better way.

Commercial Vehicles

SCANIA

Dune and dusted Scania Namibia's Clifford Marchbank tells TRISTAN WIGGILL about the life of a commercial vehicle OEM in that country.

inety per cent of our customers are local transporters,” says Marchbank. “There are South African transporters that we service from time to time, but there are very few large fleet customers here. The Namibian Police Force and City of Windhoek are bus customers, and the biggest bus fleet operator is Sunshine Tours, with 65 Scanias.” Where do the opportunities lie? “At the new mines that have been set up,” he says. “These mines are in the startup phase and require steel, wood, cement, etc., which creates contract opportunities for transporters. Few goods are produced locally, so the transport industry should grow year over year.” A construction boom has been going on for the last two years, with the expansion of the Walvis Bay port, new roads built between Windhoek and Okahanya, and extensive housing schemes underway. “The challenge we face is the limited skills pool. There are not many technicians, sales, and other personnel available, and retaining them is becoming more difficult. Namibia is an extremely expensive country to live in, with the general cost of living 10% higher than South Africa and the cost of housing 50% higher,” he says. HIV, poor general wellness, and limited access to hospitalisation and antivirals are other staffing challenges. “Due to the small market, we must target all industries to maintain market share. The bus market is limited to tourism, and staff transport to the mines. Mining and

Mining and construction trucks are new segments

construction trucks are new segments, which we have started concentrating on this year,” he says. Long-haul transport has been the company’s bread and butter since 1975, when Scania was established in the country. Limited production of food, beverages, and general manufacturing means almost everything is transported from South Africa. In fact, the only products leaving the country are fish and charcoal; so, limited loads travel back to South Africa, or to other African countries. The population stands at around 2.2 million people, with a 55% unemployment rate. “We currently run an apprentice programme in conjunction with the Namibian Institute of Mining and Technology, where apprentices spend five years doing their practical at Scania and get employed when they qualify. Scania also has a wellness programme and an on-site nurse that comes in, twice a week, for medical checks and free medication, if needed.” All vehicles and parts are sourced from South Africa. Upon placing an order for a truck that is stocked in South Africa, it can be delivered to the customer within five working days. If it needs a body or any auxiliary equipment, it could take up to a month, depending on the type of body. All trucks are driven to Namibia by a contracted transporter. “All parts orders placed no later than 16:00 every day, arrive in Windhoek at 13:00 the next day. The outlying areas of Rosh Pinah (900 km from Windhoek), Tsumeb (500 km from Windhoek), Ondangwa (700 km from Windhoek), and Swakopmund (350 km from Windhoek) normally take an additional day. If parts are not stocked by an importer, they will source them from dealers in South Africa or import them from Belgium, which normally takes 7 to 10 days,” he concludes.

Clifford Marchbank director at Scania Namibia

Scania has invested R40 million in the new Windhoek dealership, is currently upgrading Tsumeb, and has recently relocated to Swakopmund from Walvis Bay

Reliable vehicles ensure passenger safety and business growth

TWA | July/Aug 2015

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Commercial Vehicles

volvo

Priced to go The Volvo Group believes the time is right for a dedicated used trucks facility that will serve the needs of price-sensitive buyers on the continent. Tristan Wiggill looks at the dynamics of the business.

ver the past couple of years, we have situation with the seen a number of new entrants in the South used market, the African market looking for an affordable, group has a vision to high-quality, reputable truck. This is the increase this to 30%. Demand space we want to operate in, as we are able to provide for used trucks is driven by a number operators with pre-owned, premium-brand trucks with of things. European legislation, for example, low mileage, in good condition, and is changing. It now prohibits 6x2 with the Volvo stamp of approval,” trucks from being sold to countries Used trucks motivates Christian Coolsaet, manin Africa. The result is more enquir• T he used trucks market in aging director of Volvo Trucks and ies from South Africa. South Africa’s South Africa is dominated by Renault Trucks South Africa. currency also plays a role: it is simnon-OEM dealerships. Market values for used trucks ply more attractive to pay for a truck •B rand equity is created through brought into the centre are deterin rands, from South Africa, than it is buyback agreements on new trucks. mined by in-house appraisers, who to pay in euros, for one from Europe. •U sed trucks are most often evaluate the units extensively. “As Many European trucks exported to bought by start-up companies, always, and as with every aspect Africa arrive with the wrong emisowner drivers, of our business, we work closely sion standards, and with brake and and entrepreneurs. with the customer during the buysuspension systems not suited to ing process to gather their input African roads. and to ensure the trucks are subsequently prepared to The continent has, to an extent, become a dumping meet their expectations.” The location of the used trucks ground for European trucks, but the Volvo Group is centre – in Ekurhuleni – is of particular importance. “It’s attempting to change this by making available more a top location. When I have the privilege of landing at suitable vehicles. The used trucks centre will have a O.R. Tambo International, I see a lot of different outlets website so that a potential buyer, anywhere in Africa, has here for used trucks. So, it is a bit of a magnet for people a visual representation of the truck(s) they’re intending who are shopping around, including from countries up to buy. A communication strategy is also being develnorth,” says Coolsaet. oped to allow closer working relationships with Volvo’s partners on the continent. This will assist the group to Gateway better understand the needs of different markets and Volvo will target customers in right-hand-drive markets, provide appropriate assistance. including those in the Horn of Africa, since it receives a number of enquiries for used trucks from potential The continent has, to an extent, buyers in south-east Africa, all the way up to Ethiopia. become a dumping ground for A few years ago, the group sold around 10% of its new trucks outside of South Africa. While this is the current European trucks

ABOVE Part of the dealership’s function is to facilitate tradeins of all truck makes and honour tradeback deals

TWA | July/Aug 2015

trailers

Trailing behind Tristan Wiggill speaks to Jim Campbell about a topic that is often overlooked in South Africa – trailer servicing. Trailer servicing is a job often disregarded in South Africa. Why do you think this is the case? JC While the truck has a higher capital cost and is seen to be the money earner, the trailer is considered to be the poor relation and is often ignored when it comes to maintenance. This is especially true where the truck is on a maintenance contract with the OEM franchise holder. My past experience is that the maintenance cost for a trailer was about 25% of that for the truck tractor, but that may be even lower now, as truck tractors are more sophisticated.

Why is it important to service a trailer?

Jim Campbell Treasurer of the Institute of Road Transport Engineers in South Africa

As with any piece of equipment, vehicles included, regular maintenance is important to keep the equipment running at optimum performance and to avoid component failure. Frequency of inspection is determined by the type of operation. It follows that off-road equipment should be serviced at shorter intervals than on-road, long-distance vehicles.

bushes, to avoid seizure and the subsequent binding of brakes. This is a common area where maintenance is generally lacking. Wear in foundation brakes is unavoidable. The checking of brake lining thickness and brake drum wear is important. Other servicing requirements would depend on what equipment is fitted to the trailer.

How does an operator benefit from regularly servicing a trailer? As stated above, regular inspection and relatively lowcost maintenance can avoid subsequent major cost failures. For example, neglect in lubricating brake components can lead to a major brake overhaul or, worse still, brake failure on the road, which may result in a major accident.

How does one know when to service a trailer? This depends on manufacturers’ instructions, but experience also comes into play. In any substantial workshop facility, skilled workers and management are important.

What exactly needs to be serviced on a trailer?

Are there service plans available?

On standard trailers, one important requirement is for regular lubrication of moving parts, such as brake S-cam

Most trailer manufacturers supply basic maintenance instructions when a new trailer is delivered and, depending on the complexity of the trailer, may include more specialised information on components such as pumps, hydraulic equipment, and so on, if fitted.

How long does it take to service a trailer? There is no standard time for this, as it depends on the amount of work required, but most workshops should use standard inspection and job sheets that include standard times that have been developed over time.

What are the possible outcomes of not servicing a trailer? Summarising what is shown above: • major and costly failures • unscheduled breakdowns, leading to trailer downtime and loss of revenue • regular breakdowns could lead to loss of a contract • unroadworthiness, leading to traffic fines.

TWA | July/Aug 2015

FLEET MANAGEMENT

DIGICORE

A fine track record Ctrack has sold almost a million tracking units, of all kinds, under its multifaceted umbrella, over the past 30 years.

f you wanted to monitor driver behaviour in industry is the efficient management of public transport. 1985, you used a tachograph, which looked like This is because a large number of individual financial a giant speedometer and recorded (and retained) transactions take place on a daily basis. Ctrack addressed speed and distance information. Tachographs this with its Integrated Fare Collection Solution, in 2011, emerged in the 1950s and, by the mid-1980s, their use which has the potential to render the taxi industry was mandatory, in the European economic community, almost cashless. for vehicles above a certain mass. Also that year, an insurance telematics project was Around that time, a fledgling local business, by the launched with Discovery Insure. Essentially, this overname of Vepro, was making its foray into the South arching usage-based technology allows each individuAfrican marketplace, with a range of VDO tachographs. al’s driving to be monitored (in real time), and, based on The company used the devices to raise awareness of safety and driving efficiency. Combining forces with other local fleet and technology specialists, DigiCore was born and listed on the JSE, in 1998. The senior manageNicholaas Vlok, CEO, Digicore ment remains the same today. “The last 30 years have been a remarkable journey, one on which we have stayed at the cutting edge of technology in a strategy that is ultimately about making roads a safer place and helping organisations and individuals better manage their fleet and motoring costs,” says CEO Nicholaas Vlok. The company’s JSE listing gave it the capital to boldly move forward. In a technologicallyCtrack's rapid response unit driven environment, funding for research and development is critical and, with the rapid rate of change in a digital this information, rewards them for good driving. Not only world, being at the forefront is key. In 2000, it won a does the device monitor speeds, routes, and distances, Debis/Telkom tender and supplied 22 000 units with it also captures acceleration, deceleration, and cornerfleet management software. It proved to be a very chal- ing force data, thereby painting a clear picture of driver lenging, but rewarding, experience that lent credibility to behaviour. Information like this is invaluable to fleet operthe company and its products. ISO 9001 accreditation, ators, who can, thereupon, make decisions about driver achieved in 2002, recognised the company’s systems and vehicle suitability. In recent years, the company has and processes. continued to refine and develop its technology with one By 2004, the subscriber base had grown to 100 000, eye on an ‘Always Visible’ ethos. across 13 countries. That year also marked the start of This embraces the concept of the connected car, as the consumer business in South Africa. Ordinary motor- well as jamming detection, integrated tolling, and trailer ists now had a cost-effective GPS/GSM tracking solu- tracking – the last being an important consideration in tion superior to traditional passive tracking products. In the haulage industry. Technological progress, superior 2007, the South African Police Service joined the grow- service, and innovation will make it possible to offer ing customer base, with some 45 000 vehicles fitted with more for less, going forward. fleet management systems. These systems are still assisting with rapid vehicle deployment today, where needed. At the same time, the company was awarded a Royal Mail contract in the UK, while Thames Water (also in the UK) extended their contract. One of the biggest challenges facing the tracking www.digicore.co.za

“Our strategy is ultimately about making roads a safer place.”

Nicholaas Vlok CEO, Digicore

TWA | July/Aug 2015

FLEET MANAGEMENT

Mixed messages In many instances, driver communication has been outsourced to fleet management companies out of expediency. Eugene Herbert explains how to eradicate the ‘broken telephone’ syndrome.

leet policy is a crucial part of a company’s overall cost-control strategy and the best-managed fleets are those whose drivers adhere to a written fleet policy. All too often, managers attempt to control fleet costs on the back end. The best time to control costs is before they occur and the way to do this is by establishing policies and procedures that inhibit unnecessary spending and protect company assets. If you want to reduce fuel costs, some ways to do so are to ensure that drivers maintain properly inflated tyres, avoid excessive idling, and keep to the posted speed limit. This isn’t rocket science and, through drivers complying with written policy, time-proven end results can be produced. The overwhelming majority of drivers probably want to do what’s right for the company; however, just because a company implements a written fleet policy doesn’t mean it is followed. A common problem is that the fleet manager communicates policy to the drivers’ managers, but word doesn’t get to the individual drivers. Most fleets make fleet policy easily accessible to drivers and managers by posting it on the corporate intranet. But, is this effective or simply a feel-good justification that fleet policy is being communicated effectively? How many drivers have access to the intranet? How many are even computer literate? Have you considered communicating policies and procedures regarding company vehicles during new employee orientation? Or, what about setting aside time at company meetings to make face-to-face presentations on fleet policies to the drivers and managers? For

drivers who work in regional offices, you can hold periodic webinars or teleconferences. During these meetings, you should not only emphasise the importance of policies designed to control costs, but, just as important, emphasise how fleet policy can make them more productive by minimising downtime, which improves productivity. Fleet managers should engage in driver communication whenever practical and appropriate. Sales and service organisations often hold meetings where they receive training for new products and services. Fleet managers should request some time at these meetings to remind drivers about fleet policy or identify best practices. Since many drivers are in sales, they often attend annual sales meetings. Why not use this opportunity to ask for time on the agenda to discuss the same items that they would on a conference call, but in greater depth, and answer questions from attendees? Most drivers will tell you they welcome the communication, so long as you keep it short and make it pertinent to their job. Build into every message a feedback mechanism to allow engagement by the driver or field manager. Drivers can provide a first-hand perspective and share insights on how fleet managers can improve their experience as drivers. A fleet manager needs to know what is and isn’t working, from a driver’s perspective, along with soliciting suggestions on how to improve the driver experience. An effective driver communication strategy – which supports both training and written policy – will win the support of drivers, administrators, and managers.

The best time to control costs is before they occur

Eugene Herbert is group managing director at the RAC Group.

TWA | July/Aug 2015

fleet management

mix telematics

Industry needs a wake-up

Steven Sutherland explains that one of the most concerning factors for long-haul carriers and fleet operators is driver fatigue.

n some countries, strict legislation governs the number of driving hours permitted in a given day. Canadian drivers, for example, are not allowed to drive more than 13 hours per day, unless they have been offduty for eight consecutive hours prior. In South Africa, things are a bit different. While legislation has been spoken about, pen has not been put to paper. Subsequently, many businesses incentivise their drivers improperly, paying them by kilometres driven. Some drivers travel long distances on the weekends, arriving at work fatigued, before the week even starts. Many drivers are not paid well and travel great distances, merely to make a living. How is this acceptable business practice, considering the consequences for drivers, other road users, and a business’' bottom line? According to the International Transport Forum, South Africa is ranked worst out of 36 countries for road fatalities, which costs the country (and consequently the fleet sector) over R300 billion annually. While there are many different forms of non-compliant driver behaviour, fatigue contributes heavily toward road accidents. The three main culprits of fatigue are physical exhaustion, medication-induced drowsiness, and poor dietary habits. There is a growing concern over the availability of skilled drivers, given that it is not necessarily an attractive career path. The sector already faces a serious shortage of skilled drivers, due to the industry’s inability and/or unwillingness to temporarily remove drivers from their daily duties. The sector needs investment to set up programmes that encourage and train young people to become professional commercial vehicle drivers. This would increase the pool of professional drivers available and raise the profile of professional driving. Through this, road incidents stemming from fatigue and poor driving behaviour will, most certainly, be reduced. However, it is not only about training and upskilling. Consistent monitoring and proper screening processes should also be implemented. Drivers need to be educated and made more aware of the

dangers of fatigue, as well as the importance of taking regular rest breaks. What is the best way to do this? A solid investment needs to be made in a fleet management system that monitors driver behaviour. Technology can play a crucial role in monitoring driver fatigue. There are tools that can assist drivers in proactively testing their alertness before taking the wheel and while driving. We believe the solution lies in making driver incentivisation a positive reinforcement technique, through the implementation of telematics systems that correct and improve driver behaviour. Access to driver data gives fleet operators the ability to reward those who drive within recommended hours, and/or those that adhere to scheduled rest breaks. Video footage (in-cab video monitoring) can also prevent damage to public property, vehicle write-offs, deaths and injuries, and lawsuits caused by fatigue – all of which come with a high price tag. Businesses that focus their fleet management strategy on influencing or changing risky driving behaviours not only reduce the risk and cost of unsafe driving, but improve their organisational profitability too. Similarly, if drivers are able to identify risky situations, they can manage and overcome complex issues within their driving environments. Economic progress is about more than just improving a particular business' profit margin. The way a company treats, values, and develops its drivers is vital for business longevity and reputation. Getting this right is simply better business and an effective and responsible approach to a serious industry issue.

“The solution lies in making driver incentivisation a positive reinforcement technique.”

Steven Sutherland is sales director for South Africa and Africa at MiX Telematics

www.mixtelematics.co.za

TWA | July/Aug 2015

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Fuel

Ready, genset, go Doug Kuni asks, can South Africa’s economy be run on diesel like other economies in Africa?

t the moment, to keep the lights on, we but only if exploration is given the go-ahead, if all enviare burning diesel. Eskom has about 2 000 ronmental clearances are completed, and if it gets to a MW of diesel gas turbines at the moment. commercial stage. The last option when things go bad Perhaps it is slightly more, because the is that everyone installs their own emergency gensets. Acacia units are used as backup for the Koeberg power Everybody tends to look after their own operations and station. If there is a blackout at Koeberg, something ask: How can we keep our business going with the status needs to run the cooling quo? Running an econowater pumps for the reactor. my on diesel gensets is a We will have to keep an eye on So, at least 2 000 MW of gas very, very expensive busibottlenecks in diesel supply turbines are burning diesel. ness. But, it seems that That is a hell of a lot of diesel. the Nigerians have overFor 1 000 MW, you are looking at using about 140 taken South Africa in GDP with exactly that – a genset tonnes of diesel per hour. For 2 000 MW, it’s about 280 economy. But, I think, given the structure of our industry tonnes per hour. The Department of Energy has just and the structure of our economy, South Africa requires commissioned, through an independent power producer, grid power. In a nutshell, gensets are a last resort. another 1 000 MW. These are going to be commissioned very shortly. So, we will have 3 000 MW of diesel-powered Bright ideas gas turbines. Incidentally, Botswana very recently comWhile frustrating and costly, loadshedding has also missioned four 150 MW coal-fired units, built by the propelled innovation and created several new indusChinese. Their average availability at the moment is tries. For example, special, customised trailers are between 35% and 50%. being ordered and built as buyers of these units require mobility from their backup power units. Special realThere have been some major technical issues, so they time telematics systems are being developed locally, can’t run their units and supply their power as planned and generator-specific transport contracts are being – so, they are burning diesel. They have gas turbines awarded across the country. at the Orapa diamond mine; 90 MW of diesel-powered energy – diesel that comes from South Africa. If we’re burning diesel and continue to burn it at current volumes, our neighbours start to burn diesel, and when enough individual citizens use emergency diesel gensets at home, we we will have to keep an eye on bottlenecks in diesel supply. If loadshedding becomes so bad that we have problems with pumping along the Transnet pipeline, we’ll start having bottlenecks in diesel supply. If the petrol stations do not have standby diesel gensets, no fuel will be available. You’ll have to wait until the power returns. South Africa may have gas – shale gas, that is – but it could be five or six years before that gas comes to market;

Doug Kuni is an independent oil and energy expert and consultant

TWA | July/Aug 2015

tyres

Resistance is fertile A suggested way to reduce fuel consumption in a fleet is to equip vehicles with low rolling resistance tyres. Speaking to Nobuzwe Mangcu of the South African Tyre Manufacturers Conference, Tristan Wiggill gets to grips with the everyday viability of this option.

suggested way to reduce fuel consumption in a fleet is to equip vehicles with low rolling resistance tyres. Speaking to Nobuzwe Mangcu of the South African Tyre Manufacturers Conference, Tristan Wiggill gets to grips with the everyday viability of this option.

Is low rolling resistance tyre technology the next big thing for commercial vehicles? NM Low rolling resistance technology for commercial tyres is being used extensively across the world and has been around for more than a decade. Low rolling resistance commercial vehicle tyres, from a variety of brands, are readily available in the South African market today.

Do low rolling resistance tyres really reduce costs in a fleet, and what evidence is there to support this claim? Low rolling resistance is achieved through a combination of the tread compound used, as well as the tread and carcass design employed.

TWA | July/Aug 2015

Fuel savings and engine emission reductions have been proven in controlled, state testing facilities. Real-world savings for operators under day-to-day conditions may vary according to the routes that are driven, the level of tyre maintenance performed, driving habits, and topography, among other factors. Even so, real cost reductions for fleets have been recorded. Fleet and tyre maintenance is essential to achieving optimum tyre performance and lowering tyre costs. Basic maintenance procedures, such as the monitoring of inflation pressures, load control, driver training, and vehicle geometry (alignment), together with correct tyre design selection for the topography and road conditions, will go a long way to achieving the benefits.

Do these tyres cost more? If so, is it not better to buy cheaper, ‘normal’ tyres? While the initial capital outlay may be higher, the offset in operating cost reductions makes it worthwhile, especially in the case of fleet operators. The return on investment is soon realised. The fact that these tyres fit on to standard rims is hugely

helpful, as well, ensuring that no additional fitment costs are incurred during purchase or when replacing.

What about their longevity and suitability to capricious African road conditions? It is a myth that low rolling resistance tyres compromise robustness of design to achieve their fuel-saving results. There is also no compromise paid to wet grip (braking) performance, lateral stability, or ride comfort. As you mention, driving conditions along African roads vary greatly from region to region. Therefore, one of the most important considerations to make when purchasing tyres is to ensure that the most suitable design within the tyre family is chosen. That, together with basic and ongoing tyre maintenance, ensures tyre longevity. BELOW Agilon 400 silica is said to offer improved abrasion resistance and enhanced heat ageing properties, compared to carbon black and nontreated silicas

corridorS

New summit reached W hile Africa’s transportation corridors rely on hard infrastructure – such as roads, railways, airports, and marine waterways – the Regional Infrastructure Development Master Plan has determined that only 25% of transport delays occur due to physical infrastructure problems. It found that 75% of the delays stem, rather, from poor facilitation of existing infrastructure. Poor infrastructure and inefficient operations, such as complicated border procedures and customs regulations, cost regional businesses millions of dollars and are stifling the continent’s ability to compete on a global scale. Bringing sustainable integration to the development of African corridors offers a unique opportunity to further Africa’s integration, enhance its infrastructure development, increase its competitiveness in the global market place, and strengthen its economic resilience. All of this while furthering its objective of creating a free trade corridor the length of the continent – from Cape Town to Cairo. Accelerating corridor development is a critical step in initiating the next phase of developing

Africa, and that should make the Development Corridor Africa Summit 2015 a must-attend pan-African platform for all key stakeholders. The summit has been arranged to promote and add value to the creation of African corridors with public-private co-investments. It originated from the need to modernise Africa’s corridors, through infrastructure development, trade facilitation, and economic development. Furthermore, it has been developed to foster rehabilitation and expansion, and undertakes to assist with the fasttracking of core infrastructure and operational development projects within existing and new corridors. The inaugural summit will help to improve the delivery and operation of gateways and corridors through marketing, business development, and value-added services. AMC International is pleased to announce that the Development Corridor Africa Summit 2015 will take place from 26 to 28 August 2015 in Johannesburg.

Improving its trade corridors is vital to Africa's development

TWA | July/Aug 2015

DEVELOPMENT CORRIDOR AFRICA SUMMIT 2015 26-28 August 2015, Hilton Hotel, Sandton, Johannesburg, South Africa

Bringing Sustainable Integration to the African Development Corridors Master Plan

Who should attend the Summit? • Government

• Transport

• African Corridors

• Mining

• Airports, Rail, Road and

• Agribusiness Industry

Ports Authorities

• Property Developers

• Customs Authorities

• Construction Companies

• Development Finance

• Logistics and Supply

and Agencies • Parastatals • Trade Industry

Chain Providers • EPCs

Sponsorship and Exhibition Opportunities First of its kind! Development Corridor Africa Summit 2015 is a platform tailored at a deal and operational level that will gather decision makers and influencers in one place at one time. They will evaluate products and services and will look to short-list potential suppliers. 1 Can you afford to miss out on this opportunity? 2 Do you have a product or service that our senior decision makers and influencers need? We have a range of business development/marketing and sales solutions that will be tailored to specifically deliver on your business objectives.

Don’t miss this opportunity to network at a deal and operational level with key stakeholders at Development Corridor Africa Summit 2015! The time is now! Tomorrow might be too late!

TWA || July/Aug Mar/Apr 2015 27 Call +27 11 341 1000 or email info@amc-intsa.com or benl@amc-intsa.com forTWA more information

supply chain logistics

Reining in complexity Having attended Sapics 2015, the single largest gathering of supply chain management professionals in Africa, Tristan Wiggill learns that the supply chain of today is a highly complex animal.

he three-day conference and exhibition,

held at the Sun City resort in the North West province, played host to numerous local and international speakers and supply chain experts. It also hosted over 75 exhibitors involved in the industry, filling the Superbowl and its surrounds with all things supply chain. This year’s theme, which marked the event’s 37th recurrence, was: ‘The Pulse of Africa’s Supply Chains’. In his opening address, Sapics president Cobus Rossouw said it was exciting to see over 1 000 people actively engaging with each other over the three days, all of whom, he said, were leveraging their supply chain networks. “I have no doubt that this conference will live up to all our expectations, even with us raising expectations again,” he remarked. Rossouw said the individual members of Sapics continue to form the backbone of the organisation and thanked the event’s volunteers, sponsors, and exhibitors for their contributions. He

ABOVE The Sun City Superbowl was packed with exhibitors

Ever greater demands are being placed on African supply chains

TWA | July/Aug 2015

said, “Most importantly, thank you to every employer that has made it possible for their people to be here. We recognise the investment and cost in time – we trust that it will be rewarded many times over.”

No walk in the park By walking among the exhibitors and listening to a number of high-quality speeches, presentations, and even a theatrical performance or two, it soon became apparent that ever-greater demands are being placed on African supply chains. The emergence of e-commerce and FMCG, rapid economic growth in developing countries, and changing customer needs are but some of the demands. It is clear that there is a need for experienced heads and improved forecasting methods. But the challenge lies in finding these heads in a skills-deficient economy. Skills shortages continue to bedevil the South African logistics and supply chain industries, with practitioners reporting shortages of up to 64% in positions that require a bachelor’s degree. It is now, more than ever, critical to upskill staff and find the best people for the job. In his speech, Rossouw attempted to allay fears over the future of the profession. “We have recently

supply chain logistics added specific focus on young professionals – the future of our profession. We are pleased to welcome many young supply chain management professionals to the conference. “We’ve developed a mentorship programme and we welcome all organisations to participate in that,” he said. “One page of our menu that needs to improve is how we share intellectual capital. During the conference, you will again be exposed to many papers and case studies, from theory right through to practice. We have to get better at sharing this and allowing people to learn from each other’s successes and failures,” he added.

Working together While many in the supply chain industry desire greater collaboration, a deeper understanding of companies and their processes is needed. Partnerships need to be forged with deeper links. It is acknowledged that greater integration of hardware and software will improve supply chain efficiencies, reduce costs, and lower the risks. But, more flexibility and adaptability in the systems and processes are necessary. Customers have never been more educated, fussier, or more adamant about getting the products they want faster and with less fuss. They want customisation, and to be treated like individuals. Let them down and they’ll take to social media to express their dissatisfaction. With a greater voice, they are influencing trends and getting more involved. Time is precious and experience is everything. Often, buyers want to return their goods, which means your supply chain needs to hold up in reverse. Service providers have to increase their efficiencies and processes, and discover, or quickly develop or adapt to, new or existing technologies and methods to do this. In Africa, supply chain complexity is exacerbated by the lack of infrastructure, electricity supply constraints, and heightened security concerns. But, despite this, the pace of economic development on the continent continues. There are 54 countries on the continent, numerous languages spoken, and vast cultural differences to contend with. The supply chain of today has to become more flexible and demonstrates greater adaptability. There is a need for greater levels of integration. Today’s supply chains demand network-wide visibility, 24/7. Some even need to cater to bimodal stock distribution. Pressure to reduce costs in the supply chain is constantly being applied in the face of weak economic growth, a deteriorating rand, and rising fuel costs. Roads are becoming more congested, and levies and taxes have been increased. Developing efficiencies within end-to-end supply chain integration is now critical for strong financial performance and mitigation of volatile fuel costs. Warehousing and distribution centres have to keep up. These facilities need to be modernised and automated, where necessary. The right products must be picked, first time and delivered promptly, without damage. The goods stored in warehouses need robust packaging, which must remain

environmentally friendly and easy to dispose of. When accidents happen, someone needs to repair damaged racking and shelving quickly and affordably, with minimal disruption. Better planning methods are required to define product demand more accurately. Modern planning has to assist supply chain managers in improving their decision-making and decision accuracy, producing shorter lead times, and creating better supply chain flows. Of course, greater insights require smarter, more intuitive software. But, better IT needs people with more advanced skills and experience, if data is to be understood. A growing trend across many industries has been the application of big data, with the use of algorithms and the hiring of data scientists becoming commonplace. As businesses collect and store an ever-increasing amount of data, the algoCLX introduced virtual technology for effective supply chain training rithms required to make sense of it will become ever more valuable. The challenge lies in getting data that is meaningful, in order to make the best decisions for your business. New means of producing, tracking, and analysing data are required. And then there’s the matter of better data storage, visibility, and accessibility.

Politics Journalist, TV host, and political commentator Justice Malala provided further perspective on the challenges facing the profession in his speech: ‘Beyond the Noise: The Unfolding South African Political Landscape 2015–2025’. His view was that there is plenty of noise in South Africa, across both politics and industry, and that it is necessary to be very selective in the issues one spends energy on. Malala’s advice was to figure out a way to worry better. He advised the audience to spend more energy and thought on issues that could make a difference to their immediate environment, whether in the short or long term. Although supply chain management professionals are experiencing frustration with government for seemingly not getting the basics right, he said that there needs to be a way of channelling this energy towards positive outcomes. “We need to call government out and make them realise why these areas need attention, but we also need to focus on what supply chain management can do for economic growth. One of the reasons I am so proud to be part of this profession is that we always seem to find a way to get things done, and if we can’t find a way, we invent one. Innovation is central to the profession and the people that populate it,” Rossouw concluded.

Cobus Rossouw Sapics President

TWA | July/Aug 2015

supply chain logistics

Truckload of solutions

Tristan Wiggill details the findings from a workshop on Africa’s supply chain and logistics challenges, held during the 2015 SAPICS conference at Sun City.

n the issue of truck fleets, it was noted first, before deciding if it’s necessary to outsource. It is that larger operators are using new vehicles, important to optimise costs, instead of having a ‘onewhich they typically replace every three stop-shop’ approach to logistics. Attendees noted that years. These vehicles are more efficient and there are many differences between regional and national have reduced maintenance requirements compared to contracts and that the nuances of each must be considolder vehicle fleets. ered when contracting. The consensus was to focus on Some logistics providers are importing vehicles that are regional, rather than national, solutions, in order to better not compliant in South Africa or whose tyres are not suit- understand sub-contracting. able for the roads. Potholes and open manholes continue to impact lead times, while driver fatigue remains an Crossing the line issue. There are seemingly growing road maintenance Cross-border trade poses many threats to operators. Pre-clearance measures don’t appear to help, which challenges, especially in the rainy season. Poor forecasting at ports means they are not able to leads to long lead times and inconsistent processes handle the growing demands placed on them. Movement being followed. Entering Zimbabwe is said to be particularly problematic. While the longof goods from the term solution to this is probably ports was described Sharing of information among the use of rail, a lack of track as slow and diffiusers and providers will optimise and technology standardisation, cult. However, the and poor visibility of goods are single biggest issue the entire chain significant concerns. being faced is lead times, which results in larger inventories being carried. Paperwork delays are a result of different technologies Some participants suggested the use of alternative ports. being employed by different countries, and by different borIt was noted that, in South Africa, we tend to be very reli- der posts. There is inconsistency when it comes to permit ant on Durban for imports and exports. There is a need to requirements and, while some processes may be elecstart looking at other ports like Port Elizabeth, Cape Town, tronic, these are being very inconsistently applied. A soluCoega, and others that are becoming more efficient. tion, addressing border control issues, needs to be found. It was suggested that there be a single body that supplies Congestion is said to be lower at these ports. Almost all agreed that greater collaboration is needed up-to-date information, per country, as situations change across the supply chain. It is believed that sharing of overnight. Bi-lateral agreements on technology could be information among users and providers will optimise the used and some sort of border control technology standard needs to be issued across the continent. This should be entire chain. Most users find that costing, particularly when provided seamless, so that, if one country upgrades, a schedule by larger logistics service providers, is overly complex. for other countries would follow. Many border posts are Smaller providers are said to provide much clearer remote, so access to these types of systems would have contracts and much simpler cost breakdowns. There to be well thought out. Solutions are also needed for trucks are many variables within a South African context and, carrying mixed loads because, typically, full containers sale frequently, there is a difference between quotes given through border posts but problems emerge for hauliers and costs invoiced. Some attendees said it is better to transporting mixed loads. Clearance issues persist, paroutsource only what is not critical to your business – ticularly when it comes to payments and proof of payments, suggesting that internal benchmarking should be done which relate to revenue services in the different countries. It

TWA | July/Aug 2015

supply chain logistics is unclear how these are calculated, what the proof of payment requirements are, and how certain cargo is handled. Furthermore, there are multiple inspection parties in different countries. In South Africa, you may have one, and in the next country there could be three or four, which complicates the process. Other issues of concern include pilferage, a lot which relates to how products are inspected. There is no consistency in the way that goods are inspected in different countries. Technology needs to address this at inspection points, by scanning the products at the first point and taking photos – having these accessible to all subsequent points of inspection. It was believed that this would reduce the need to open everything, which delays loads. All parties must remain mindful that the more goods that are exported, the more jobs are created. More training and education needs to be done at border posts in this regard. Civil servants appear to lack understanding of the bigger picture, not realising where they fit in the chain. Ultimately, there is a need to diversify the skills base, specifically at the borders.

Zimbabwe has one of the longest waiting periods at border posts

Left in the dark South Africa’s power supply problems are having a negative impact on investment opportunities. Loadshedding means continuous rescheduling is required. Companies are having to carry much more stock and are running extra shifts. There is increased production downtime and, while loadshedding may be two hours, another hour and a half is needed to restart extruders at manufacturing plants. Many companies carry perishables and margins are being eroded because products need to be heavily discounted. Proactive companies are performing route surveys and are scheduling their routes better. However, it is believed that South Africa is merely managing electricity demand but not looking at the supply side of electricity effectively. Agility and innovation is needed, which calls for the real-time rerouting of loads. Lean manufacturing is required, in spite of the risks. While it was acknowledged that critical industry sectors need to be protected, it is difficult to establish which are more important than others. Companies need to be more creative in their use of resources. This could be taken to mean that the activities that don’t require electricity, like packaging, should be scheduled for periods of downtime. It would help companies plan better if periods of loadshedding stuck to communicated schedules. In general, South Africa needs to manage power outages better, while a longer-term solution is found. Loadshedding schedules should also pay more attention to industrial areas and industrial customers. People in a residential area typically know when they will be loadshed. But, it’s not always that clear for industrialists and companies, so companies need to be better informed about looming outages. There also needs to be greater levels of information sharing across loadshedding schedules. While one may be aware of when their residential area is going to be cut, you may not know about other areas. Knowing this will allow companies to re-route and re-schedule things to better manage the problem. Distribution centre managers need to be more flexible when receiving products, as traffic becomes congested.

Standardised cargo handling procedures will expedite load/unload times

Fleets need real-time rerouting in order to avoid unnecessary congestion

TWA | July/Aug 2015

rail

On the line Having spent a day at the two-day Coal Transportation Africa Summit, Tristan Wiggill asked Transnet’s Divyesh Kalan and transport economist Andrew Marsay about the measures currently underway to boost South Africa’s coal exports by rail.

theme on the day was the need for industry-wide collaboration, a topic Kalan was happy to elaborate on. His presentation was titled: ‘Next Steps in Creating Export Capacity.’

BELOW Longterm rail commitments result in lower tarrifs

central

DK “We [Transnet] try to collaborate with junior miners and the majors. We’ve successfully done that in the manganese and iron ore sectors. We understand that we can’t demand that every junior miner invest in capital. Investment is a function of economics, life of mine, and the annualised throughput you get on rail and port capacity. We try to encourage collaborative processes between the junior and major miners so they can share the loading facilities on commercial terms. We also created the coal industry forum. I think we’ve been a lot more participative than in the past; there’s a lot of engagement.” Realism Marsay was encouraged by the wisdom that Transnet has recently demonstrated, in terms of the transportation requests it receives from miners. AM “What’s really good to see is the emergence of commercial realism. Requests to transport coal are being investigated and audited by Transnet. Consider that you might investigate the ramp up of what may be a legitimate mining right, with the potential for four million tonnes, only to realise its 100 000 tonnes in year three, 500 000 tonnes in year four, and 2 000 000 tonnes in year five. Suddenly, you’re left with a very, very different scenario to what you thought you had. You thought you needed to create a railway, for example, in the Waterberg, with 20 or 30 million tonnes in five years’ time. “We are seeing much greater honesty in the relationship between the mines and Transnet. I think that’s very much to be welcomed. Hopefully, there’s also a growing realism on the side of the industry. Transnet cannot do everything, for everybody, all the time. There’s a very good mutual recognition process happening. The industry needs to recognise that Transnet is committed, long-term, to providing a predictable framework of capacity, but that it cannot do everything. “There is a tendency within the industry to look at the Richard’s Bay coal line, which will give some

TWA | July/Aug 2015

people a tariff of $15 (two and-a-half US cents per tonne, per kilometre), for example, from Ermelo to Richard’s Bay, and say: Why can’t I have that on the Maputo line? Why can’t I have that out of Waterberg? – forgetting that the low tariff means a high-volume, long-period commitment to long distance. That low tariff cannot always be replicated; so, an organisation like Transnet faces the quandary: How does it recover its costs without charging a tariff that nobody can afford? And how can it commit to long-term infrastructure?”

Party hard While there is talk of a fairly ambitious expansion programme for the Waterberg, success is very much perceived to be dependent on miners coming to the party. DK “We’ve already started the first phase to unlock 6.3 million tonnes, but what we find is that the miners we’ve been working with run for a while, and then come to a standstill. We are showing goodwill and commitment to this [RichCor 81 Mtpa] project but, likewise, miners have got to show a similar commitment. “Every time we have a meeting with the miners, the project is another year older. So what we are saying is: If you have projects in the Waterberg, let’s be more transparent. If you are dependent on an Eskom supply, don’t just say you’ve got an Eskom agreement. In fact, I propose that Eskom, Transnet, and the company sit around one table together, because we can’t speak in different rooms. Something is going to break. “We are committed to run ahead, but it’s a function of where the industry is. We need to underpin these investments through long-term contracts. You don’t want a take-or-pay contract that’s a noose around your neck and an impediment to your business. We haven’t done a full validation on the Waterberg assets yet, so we’ll be doing that soon. We will be informed by the infrastructure investments made by the mines in the region. There’s no point in having investments and stranded capacity.”

Benefits Someone in the audience asks how increases in the export capacity of coal will assist local beneficiation. DK “Most beneficiation will be seen in coal washing.

rail Greater levels of beneficiation will occur in the iron ore and manganese sectors. “The big challenge we have with coal, in this country, is to make sure we don’t evacuate coal and leave Eskom high and dry. We did a valuation of the coal resources, some years ago, when looking into the RichCor 81 Mtpa expansion drive, and we were quite comfortable that there was sufficient export capacity and Eskom supply. “Those dynamics can change, depending on Eskom’s requirements. We will seek guidance from the Departments of Public Enterprises, Energy, and Minerals on how they will take the issue of limiting exports going forward. “Right now, there hasn’t been a clear path and we don’t see a need for any changes. There was talk of increasing exports to 120 Mtpa. I think, when we play above 81 Mtpa, there may be some risk. There is always room for a smaller port operator, for what I would call the deep grades. There are certain markets which you could send smaller ships to. You could send certain types of anthracite, perhaps. We don’t see the Richard’s Bay Coal Terminal as a competitor to any of the ports, but I think the ports should be more collaborative and complementary. “We are expanding the scalable manganese line to 16 Mtpa and are looking at validation for iron ore and manganese expansion.

We are a lot more bullish about the long term, but we find that the mines are taking shortened decisions on where they are. A few months ago, the mines wanted maybe six million tonnes, today they are saying they are not expanding because of market forces. So, we are not sure if we’re going to get caught in a super cycle, whenever it returns.” AM “The more you beneficiate, the lower the volume of product you’re going to move, so, the less viable it becomes to put it on rail. A trade-off has to be sought in beneficiation policy and it’s going to affect the manganese industry significantly. “Hopefully, you get to more economic added value through the beneficiation. Zambia, for example, is now exporting pure copper plates. You’ll see convoys of trucks coming all the way down from the copper belt to Durban, six trucks in a row, which appear half-empty, but it’s because they’ve got flat plates of copper. It’s very high value, and not economical to put on rail. So, the total potential export volume out of the copper belt on the North-South Corridor will decline in proportion to the amount of beneficiation that takes place. In terms of economic policy-making, one has to balance these things.”

ABOVE It's critical that coal supply meets Eskom's demand

TWA | July/Aug 2015

TWA | Mar/Apr 2015

regional profile

Focus on Namibia Ports

BELOW Road transporters have to deal with dust and high temperatures

While Lüderitz has traditionally been a fishing port, it is beginning to cater to the needs of other industries, including diamonds, and handles a small amount of containers. The port is restricted by draft limitations and larger container vessels cannot enter. However, it does cater to cargo vessels destined for the Northern Cape. The larger port of Walvis Bay is Namibia’s commercial port, with maximum draft of 14.5 m below chart datum. This allows 4 800 TEU vessels to call on the port. Because of the small populace, the Walvis Bay logistics hub concept was created to cater to the Namibian market, as well as the SADC region. Namibia only consumes 20% of the total commodities docking at the port of Walvis Bay. The remaining 80% is divided, whereby one third goes into the region and two thirds become transhipment containerised volumes. Essentially, the port handles cargo destined for West African countries along the coast, to markets as far as Nigeria. One of the challenges faced relates to capacity. The port’s physical footprint has become relatively small, hence the expansion drive currently underway. R4 billion has been invested to reclaim 40 hectares of land from the sea. Currently, the port handles about 355 000 containers per annum. The 40 hectares should boost that number to 750 000. In total, the port is targeting a little over 1 000 000 TEUs per annum, by 2017. The China Harbour Engineering Company has been contracted to perform the reclamation and, to date, about 25% of the job has been completed. Apart from increasing container numbers at the port, Namport is looking at creating capacity for larger vessels. Berths 1, 2, and 3 have a draft depth of 14.5 m, while the other quays have shallower drafts of 12.5 m. “We are not just

TWA | July/Aug 2015

Tristan Wiggill looks at the general transport infrastructure of Namibia, including the ports and road and rail network.

looking at a window period for vessels of a particular size, but that more vessels can call on the port. We are looking at eliminating the fight or the struggle for berthing windows, by opening up the existing container terminal to accommodate various other commodities. The break bulk terminal is very limited. We want to create space within the port; we have a multipurpose terminal that will open up. So, we are looking at other types of cargo that can be handled at the facility where we are currently only handling containers,” says Cliff Shikuambi, PR assistant at Namport.

R4 billion has been invested to reclaim 40 hectares of land from the sea The Walvis Bay port exports coal from South Africa, while manganese, copper, and various other commodities also make their way out of the port. “The leadership of Namibia has devised a vision for the country that – by 2030 – Namibia will be industrialised. By then, the country must have industries in place that would fast-track exports, or at least create a balance between imports and exports,” he explains. Maximum ship turnaround time currently stands at 48 hours. “We look at turning around a vessel within 24 hours or less, if possible. Factors that come into play include fog along the coast. It can get very foggy, which impedes operations. The port is protected by Pelican Point, so it is a naturally protected deep water port. A stretch of land into

regional PROFILE the sea, like an island, breaks the winds and calms rough seas, so it is quite calm within the port environment,” Shikuambi says. There is little to no port congestion, with most vessels that would otherwise call on the port of Durban or other South African ports, rerouted to Walvis Bay. “We are not competing on cost, due to the low volumes and overheads. The port makes up for this with efficiency. For two years in a row, Walvis Bay has been ranked as one of the most efficient ports in Africa.” Finally, the SADC Gateway Port, located between Walvis Bay and Lüderitz, is encumbered by a very aged fuel import pipeline. The oil tanker jetty is about 50 years old. However, it is being refurbished so that it will be able to accommodate VLCC-sized vessels. This will be a major advantage to the country, as draft restrictions for these vessels are a major problem in West Africa.

roads. Railways are almost non-existent due to a severe lack of funds for railway maintenance, so the majority of transport is done by road.” Electricity comes from the Ruacana hydropower plant on the Kunene River, which borders Angola. Good rainfall, particularly in southern Angola, means the Kunene River flows strongly, sometimes at 300 m3 per second. This drives the turbines at the power plant. “Namibia exports up to 200 MW, offpeak, and imports roughly 60% of its power from neighboring countries’ utilities, including Eskom. During good rainy seasons in the catchment areas of the Kunene River, mainly in Angola, at the river’s source, Namibia can export electricity outside peak times, which is late at night,” explains Marchbank. Average rainfall in Namibia is a paltry 370 mm per annum. “Namibia has been in a drought for the last two years. The dams are currently 28% full, which is creating a problem with the construction Rail boom. If we don’t have good annual rain Initiatives are underway to perform major in 2015/16, the small farming community upgrades to ageing rail infrastructure. will face bankruptcy and prices of fresh Shikuambi continues, “We have a fantastic produce will escalate, placing even more rail network from the port of Walvis Bay strain on a population with a 55% uneminto the region. We want to create a rail link ployment rate,” he says. to the port of Lüderitz, to increase the Namibia’s topography and condiutilisation of that facility. That is tions are pretty much the same one of the limitations down as South Africa, and the south. We are busy comvehicles specced are pleting a link to move the same. “There commodities from the are some applicatown to the port. “The tions that require Trans-Kalahari Railway filter changes on a project intends to more regular basis: create a direct rail mining bus translink – from the port port, mining tippers, Draft depth at Walvis of Walvis Bay and the and general quarry Bay measures 14.5 m SADC Gateway Port to the work. Service intervals Botswana coal fields – coverare determined and scheding a distance of 1 500 km. The ule changes are made accordrail infrastructure is mostly there but the ingly. Fuel quality is generally the same final stretch to the border needs to be as in South Africa, with 50PPM diesel completed. Apart from that, we also need widely available. to upgrade the existing infrastructure. “However, transporters travelling to Because of the weight and the amount of Angola, Zambia, and other African countraffic, it needs to be strengthened. The tries don’t enjoy the same access. On agreement was signed a year and a half occasion, fuel tests conducted in variago,” Shikuambi concludes. ous African countries found as much as 700 PPM in the diesel,” concludes Roads Marchbank. While Namibia doesn’t often “The main highways in the north, south, east, grab world headlines, it is going about and west are single, narrow carriageways, so its business in a quiet, orderly fashion. the accident rate is quite high,” says Clifford Pricing remains an issue, but the country Marchbank, director at Scania Namibia. “All counters this with high levels of efficiency roads branching off from the main roads are and uncongested ports, roads, and airgravel roads. There is approximately 7 000 ports – making it an attractive destination in km of paved roads and 25 000 km of dirt its own right. TWA | July/Aug 2015

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warehousing

Grow some backbone

Information technology (IT) provides the backbone in warehousing businesses, whether it is for track and trace, or to support automation. Tristan Wiggill chats to Martin Bailey of Industrial Logistic Systems about IT’s role in the sector today.

T strategies significantly affect what happens in warehouses,” Bailey states matter of factly. Users want lots of functionality in their warehouse management systems (WMS), which must be efficient and easy to implement and use. IT departments, on the other hand, look for compatibility with their enterprise system, easy integration, and they want their WMS to be maintainable from a trusted source. The difficulty, then, lies in creating a compromise between all of these wants. “IT companies can be a pain to deal with when it comes to putting in suitable systems, because they are all aiming for market domination. They tend not to worry much about the business using the system – if they can dominate the market, they will do so. In an ideal world, we want to wrap IT around the processes in our businesses. But it’s important to first have good processes in place before installing a WMS. Also, keep it simple,” he implores. “What you want from IT is accurate forecasting and replenishment, good warehouse management, proper yard management, and quality routing and scheduling to support the physical processes.” He says that, when it comes to choosing a WMS, it is important to consider the level of functionality that is desired. “Also consider references, capital costs, user costs, support costs, local support, and company culture. Ask yourself: Does their culture match mine? Do not buy the cheapest thing you can get.” Employing qualified staff is also critical. “You can have the best WMS in the world, but, if your employees are not working with you, you are in real trouble. Finding skilled people is difficult, but not impossible.”

Green thumbs

Martin Bailey Chairman at Industrial Logistic Systems

Bailey says being green has become important, whether it means moving from cardboard boxes to plastic containers, or disposing of waste appropriately. “Photovoltaic solar panel costs are reducing, with the payback time currently around three to four years. Before going solar, make sure your roof is strong enough,” he cautions. Underfloor heating, where water

TWA | July/Aug 2015

Basics for good warehouse projects • Use the best consultants you can find • Use the best equipment you can trust •M ake sure lots of people have done it before • Make sure it works elsewhere • Leave lots of time for commissioning •H ave patience – it takes time for systems to work • Read all contracts carefully • Budget for extras •R emember: leading edge, not bleeding edge!

is passed through the ground, is a good way to keep a warehouse at a constant temperature. LED lighting is also seeing an increase in use, as it’s relatively cheap. Lighting set-ups can be extended to include passive infrared lights that switch off when spaces are unoccupied. Finally, make sure every component is working properly, including the warehouse, the architects, the equipment you install, the transport you use, as well as all the interfaces.

Inventory levels are monitored using modern IT systems

labour

New face of employment South Africa’s economy is doing well. But, the same can’t be said of its labour market, says the Freemarket Foundation’s Loane Sharp.

peaking at a transport conference, in May, Sharp said that current labour productivity in South Africa is, in fact, negative. “For every worker you add, production decreases and for every worker you remove, productivity increases,” he defined.

Next gen While the average age of a union member in South Africa today is 43, the average age of a job seeker is 27. “It’s a whole new generation. Young people are interested in job mobility. Older people are concerned with job security. Those are two totally different things. Job security means you want to extend your tenure in a job that is ultimately economically vulnerable. Job mobility means you want to acquire skills and experiences with Blue Chip organisations that can help build a long-term career.”

New school Continuing, he said young people in the workforce today want individualised bargaining, while the old workforce wants collective bargaining. “You’re going to have to make this shift in your businesses. You’re going to have to come up with clever employment contracts, many of which will be temporary of one kind or another. Staff will be heavily rewarded for productivity, and the workforce will be mostly young. You have got to prepare yourself for those changes, if you want to survive in this catastrophic labour market.”

Saving for retirement, being independent from the state, good quality education for your children, ownership of your own home, and access to finance for a car; these are the characteristics of the middle-class.”

Technology Sharpe also had some advice on how to use technology to your benefit. “Use technology to monitor, measure, record, and remunerate,” he says. “You can drive tremendous amounts of labour cost out of your environment – and reduce waste.” On the subject of employee contracts he said: “Start innovating in your employment contracts. Start finding better ways to get young people into your workforce. Hire people that are capable, and interested in reward and recognition for their performance. You need to make these changes in your workforces, otherwise you’ll become obsolete.” Thankfully, at least according to Sharp, the services sectors – finance, retail, transport, logistics, and telecommunications – are growing rapidly and will not stop. He says companies need to embrace Affirmative Action. “You must do, as a business, what is right for you in the circumstances – set your own target, and then work towards that.” He concluded by saying companies should welcome black economic empowerment. “But with that comes different products, different transport routes, and different channels to market.”

Loane Sharp Labour expert at the Freemarket Foundation

Data mining Sharp says that, with data being so widely available, analytical qualifications are becoming increasingly valuable. “You can gain advantage through better analytics of your customers, your suppliers, your workforce, and even your competitors. My advice is to get some kind of analytical qualification. You could, over a five-year period, double your earnings after inflation.” He added that companies should be targeting the black middle-class. “Nearly 80% of the 5.9 million black middle-class are in the private sector. The middle-class is defined by its values. Mobility is a value. Bourgeois progress is a value. TWA | July/Aug 2015

legislation

Take a load off Cost, reliability, and predictability are some of the key elements in transport that hugely impact the costs of logistics, as well as the success of supply chains, writes Brenda Horne-Ferreira

Brenda HorneFerriera CEO, Southern African Shippers Transport & Logistics Council

t our first business logistics breakfast, centred on ports and maritime issues, we found that the debate was dominated by industry concerns about how present and pending road regulations are going to impact the way we plan and optimise transport businesses. In spite of great efficiencies in the rest of the supply chain – in the absence of clarity regarding road regulations pertaining to overload control, consignee/consignor responsibility, accountability and law enforcement, ambiguities of pending high cube container regulations, and permissible freight transport hours – our supply chains and costing will be unpredictable and unreliable. They will also not support our country’s vision of an integrated, costeffective, safe, secure, reliable, sustainable, local, regional, and continental transport system. From the regional economic communities, our ministers of transport adopt and sign certain regional regulations. We know that these rulings are not just passed in the dark; there is a process of external consulting research that is done. Technical people from various governments participate in technical work groups and collectively come up with proposals that are handed to the ministers of transport to adopt. In November 2014, this process came to finality for signatories. We must be mindful of on-the-table road regulations pertaining to overload control because we are part of the SADC, COMESA, and EAC tri-partite. The transit facilitation programme’s overall strategic objective is to facilitate the development of a more competitive, integrated, and liberalised regional road transport market. The project’s purpose is to develop and implement harmonised road transport policies, laws, regulations, standards, and institutions to create efficient cross-border road transport and transit networks. The main focus is to simplify, harmonise, and standardise commercial vehicle

TWA | July/Aug 2015

drivers, cross-border transport operators, vehicles, loads, and road infrastructure. The expected result is the implementation of a vehicle load management strategy. It is important that we are mindful of what is being agreed to at a regional level. Transport-registered, harmonised vehicle regulations and standards, along with efficiency of regional transport corridors, are desired. It is very important to solidify our transport supply chains in the region. Vehicle dimensions, testing stations, operator registration, abnormal loads, dangerous goods, licencing of commercial drivers, and third party and self-regulation agreements will all become part of the tri-partite region. When it comes to harmonised vehicle regulations and standards, efficient regional transport corridors, and the proposed implementation process, member states must submit their terms of reference and requests for assistance. These requests will be considered, proposed, and evaluated. A typical tri-partite document includes the issue of selfregulation, where parties agree that, as a long-term goal, they and their respective member states will strive to achieve self-regulation, with respect to vehicle and load management. Parties agree to amend domestic legislation prior to the implementation of the information management systems being contemplated. This is what is happening at a regional level. We must read this and understand it, in the context that we are now talking about implementation and criminalisation of consignee/consignors in South Africa. The parties agree to investigate the implementation of a system whereby all persons in the loading chain may be held liable for the overloading of the vehicle, inclusive of the consignor, the consignee, the operator, the owner, the driver, and the loader. Parties agree that their respective domestic legislation needs to be perused and amended, or additional legislation drafted, to provide for the coordinated effort to control vehicle loads, harmonise enforcement, and provide institutional arrangements in vehicle load control. It is important that the debate around road regulations and the like in South Africa is integrated in the greater SADC plan.

LEGISLATION

Cubed route

Dave Watts tells Tristan Wiggill why high cube shipping containers shouldn’t be of concern to the Department of Transport.

igh cube containers were developed

in the United States some 30 years ago. Their market demanded the extra capacity on the transPacific route for the huge volumes of imported white goods and the like. Subsequently, these containers became ubiquitous in many trades, including routes to and from South Africa.

In South African terms, a high cube shipping container stands roughly 30 cm higher than a standard container. “You would think that that is the problem – but it’s not. The issue is 20 cm, because trailer fleets in this country – virtually our entire trailer fleet – are manufactured with a trailer deck height of between 1.55 m and 1.6 m. If you add 2.89 m to that by sticking a high cube container on a trailer, you get to slightly less than 4.5 m. That’s only 20 cm above the current standard restriction on vehicle load height, which is 4.3 m,” explains Watts. When asked about the impact this extra height has on truck stability, Watts replies, “Our technical investigations have shown that, in terms of the propensity to rollover, there is no added risk over a standard container.” History supports this claim. Watts says, “We’ve been transporting high cube containers for about 20 years. We’ve had a moratorium in place on that for three and a half years. When I speak to truck fleet owners, I try to find somebody who would tell me, ‘Yes, it’s a problem; we’re

having rollovers because a high cube is that extra bit high’.” But our investigation shows this is not the case. Do these containers hit our bridges? “Once again, we’ve done some investigations and bridges do get hit now and again, as do service stations, but very rarely by containers. In fact, we know of one incident, about 10 years ago, where a container got stuck under a bridge, but it didn’t actually hit the bridge.” The cost of changing the portion of South Africa’s national trucking fleet that carries high cube containers would be substantial. “Container stats, provided by the National Ports Authority, indicate that 732 000 12 m containers moved in and out of the Durban port, last year. Durban handles about 61% of the country’s total containers, so, about 1.2 million 12 m containers were moved by road one way or the other. Of those, we think about 70% are high cubes – meaning there are roughly 850 000 high cube containers transported to and from our ports annually,” explains Watts. “Obviously, a very large truck fleet is required to transport these, 98% of which measure 1.6 m and below. We don’t have a major issue, and so we question why we can’t make the changes required in the legislation to allow us to continue doing what we’ve been doing for the last 20 years.” According to Watts, the reefer export business exclusively transports 12 m high cube refrigerated containers. “That industry, last year, moved about 125 000 export boxes of reefer cargo. It’s a complex seasonal supply chain that is very marginal. We cannot have a situation where we say to the carriers: ‘You’re going to have to change your trailer fleet because that will put further pressure on their logistics costs’.” While a trailer, these days, can easily cost R250 000, lowering its deck height could realistically cost R150 000 or more, per trailer. “We probably don’t have the capacity to do that in a relatively short time and we also can’t go to the pack houses, the warehouses, or the depots and say: ‘I’m sorry, you’re going to have to lower your banks because your facilities don’t accommodate us’,” argues Watts. “High cube containers are here to stay. The industry needs the Department of Transport to take note of its proposals and concerns, and make rulings so that we can be ready to implement when required,” he concludes.

Dave Watts Executive: Customs & Maritime, SAAFF

TWA | July/Aug 2015

air cargo

Air freight facing headwinds Tony Tyler Director general and CEO, IATA

The air freight market showed a 3.3% increase in cargo volumes (freight tonne kilometres or FTKs) in April 2015, compared to April in the previous year; however, there has been no actual growth in aggregated global cargo volumes since late last year.

t a regional level, only Asia-Pacific and Middle Eastern airlines reported growth in April. North American carriers reported essentially flat demand, while Europe, Latin America, and Africa all reported declines, when compared to 2014. April data also revealed a slowdown from the growth for the first quarter of 2015, which averaged 5.3%, in line with a recent weakening in world trade growth. Despite a cyclical pick-up in the global economy, acceleration in trade and air freight demand is unlikely in the near term, as business confidence and export orders are flat or declining. After a volatile start to 2015, the market is settling down, and it is clear that momentum in air freight growth is being lost. First, there is the structural challenge of world trade now expanding more slowly than domestic production. Layered on top of that trend, we now see a weakening of economic indicators in the crucial air cargo markets of Asia-Pacific and Europe. These factors point toward a need to kick-start trade by reversing protectionist trade measures. Implementing the Bali Trade Facilitation Agreement would be a good start, as well as commitments to help facilitate trade in emerging markets. Also of note was the significant capacity increase of 5.5% in April 2015, driving the load factor down to its lowest for the past 12 months.

Asia-Pacific carriers reported demand growth of 4.5% in April, compared to April 2014, below a capacity expansion of 7.0%. Current trade volumes for emerging Asia markets are down 10%, and the region has been affected by a slowdown in exports to Europe. European carriers saw demand decline by 0.3% in April, compared to a year ago, while capacity grew by 5.0%. Recent improvements in European business confidence

have yet to be reflected in air freight volumes. A firmingup of oil prices and the euro has meant that positive momentum from the European Central Bank stimulus has faltered.

North American airlines reported demand growth of 0.1% year-on-year, while capacity was cut by 1.6%. A disappointing economic performance in the first quarter is expected to improve in the coming months, with the likely impact of falling oil prices and the end of the West Coast port strikes. Middle Eastern carriers saw demand grow by 14.1%, on the back of increased trade within the region, along with network and capacity expansion. Capacity grew 18.5%. Latin American airlines reported a fall of 6.8% in demand, while capacity grew by 7.0%. Month-on-month results for carriers in the region indicate that recent declines may have come to an end. The hope is that general increases in regional trade activity will start to be reflected in stronger air freight demand. African airlines experienced a 0.2% decline in demand and a 2.2% decrease in capacity. The region still appears to be affected by the under-performance of the Nigerian and South African economies. Bottom line After a brief optimistic period, the global outlook for cargo shows that the business is stagnating. But, the good news is that, with digital processes, new standards for pharmaceutical handling, and a focus on reducing end-to-end shipment times, the industry is well placed to stage a recovery.

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