Transport World Africa Jan/Feb 2016 by 3S Media

www.transportworldafrica.co.za ENDORSED BY

Intraregional supply chain solutions from producer to consumer

Corridors Africa’s main vein

Air Freight

Dressed for success

Materials Handling

Reading between the lines

Globaltrack

Soothing transport’s pain points

africa focus

“As markets advance, truck buyers will likely favour products of exceptional quality and reliability.” Torbjörn Christensson President, Volvo Group Trucks Southern Africa P10 ISSN 1684-7946 January/February Vol. 14 No.Vol. 1 / 11 R50.00 VAT incl. VAT ISSN 1684-79462016 Mar/Apr 2013 No. 2incl. / R40.00

You’re not buying this. What you’re buying is so much more than a coach. It’s a commitment. A partnership. A whole system designed and built around the working life of a vehicle. Founded on the principle that Total Operating Costs are more important than initial purchase costs. Fuel, as we all know, is the big one. A significant part of the Total Operating Cost over the lifetime of a coach. So it makes more sense to buy an economical coach than a cheap one. Which is why we make economical coaches. Not cheap ones. Reliability is a huge deal as well. So you won’t be surprised to hear that Scania coaches deliver the highest levels of uptime in Southern Africa, and our wholly-owned dealer network focuses all its energy on minimising downtime. Driver capability is another big cost area, which our driver training programmes are tailored to help you manage and develop. The same goes for our finance and insurance approach. We believe in understanding the daily needs of your business, rather than just looking at the risk. Also our new Fleet Management System is the perfect embodiment of our partnership attitude, giving you access to amazing detail on everything from coasting to heavy braking, and then the coaching support you need to help manage not just your fleet, but your entire cost base. So if you’re just buying coaches, we’re probably not the supplier for you. But if you believe what you’re actually buying is a partnership, a commitment, a total transport solution, then we should talk.

There is a better way.

Intraregional supply chain solutions from producer to consumer

ON THE COVER How Globaltrack uses innovative technologies to monitor fleets, locally and across Africa.

INSIDE REGULARS Editor’s Comment Give a continental... FESARTA Comment Applying ourselves Regional News Africa news round-up

2 4 6

Cover Story Globaltrack Soothing transport’s pain

Commercial Vehicles Looking outward Preference shift

10 13

Chain reaction

Slow and steady

Data harbouring

Freight Forwarding Heading East

Air Freight

Trailers Direction and drive

Without delay

Warehousing

Tyres Calculated response

Prime position

Supply Chain logistics

Fleet Management Heavy going Roam with a view

18 19

Corridors Africa’s main vein

Flocking together

Materials Handling Stacking up

Between the lines

Air Cargo

Rail freight On the line

Ports

Africa’s aviation recipe

18 24

35 TWA | Jan/Feb 2016

Editor's comment

Give a continental... T

Tristan Wiggill TWA | Jan/Feb 2016

Associate publisher Nicholas McDiarmid Editor Tristan Wiggill • tristanw@3smedia.co.za Head of design Beren Bauermeister Design consultant Frédérick Danton Contributors Mike Fitzmaurice, Tony Tyler Chief sub-editor Tristan Snijders

he maintenance and development of transport infrastructure along the entire supply chain of this continent is seen as a prerequisite to maximising its future growth potential. With more than a billion people, 54 countries, and a land mass bigger than the US, Europe, China and India combined, Africa’s potential is staggering. But, for its numerous transport corridors to remain sustainable, two-way traffic, both by road and by rail, has to be increased. Production and consumption will need to satisfy each other equally. And regional interests will have to be elevated and afforded the same value as national ones. On that note, listening to a South African Toyota executive speak recently about how Japanese companies base important strategic decisions on what they believe to be best for their country – before the company and the individuals working there – provided some food for thought. But, apart from a worldlier view, we Africans need to continually develop African solutions to solve African challenges. A great example of this is M-Pesa, the mobile-phone-based money transfer and microfinancing service launched in 2007 by Vodafone for Safaricom and Vodacom, the two largest mobile network operators in Kenya and Tanzania. As a continent, Africa can take many lessons away from its biggest trading partner, Asia, be it in port productivity, incorporating a philosophy similar to Malaysia’s Big Results Now or replicating aspects of the Asian trading environment, much of which takes place between neighbouring Asian states. As you’ll read in the Corridors feature in this issue, Africa is moving towards more mutually beneficial trading circumstances. The development of one-stop border posts in Mozambique, Uganda and Zambia is one example of this, as is the groundbreaking Free Trade Agreement. Much has been said and written about the benefits of each; now is the time to put encouraging words into meaningful action on the ground (and in the air). Apart from regional integration, this issue of Transport World Africa perfectly illustrates the importance and future direction of several technologies, in a range of industries and subsectors. It also shows that there are many gaps to fill and many more solutions yet to be found. In 2016, we continue to expand the scope of this magazine, and have included a couple of articles on materials handling – all this, as we cover the issues at play in the complete supply chain, from manufacturer to end consumer.

Publisher Elizabeth Shorten

Sub-editor Morgan Carter Client services & production manager Antois-Leigh Botma Production coordinator Jacqueline Modise 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 Vinny Reddy • vinny@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.

Trade & Export Centre

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2011 (61) Volvo FH 500 6x2 Globetroer XL, Presge Trim 3900mm Wheelbase Rear Air Suspension, Mid Li Axle, Euro 5 Engine, 12sp I Shi Gearbox, 500,000ms. (OFFICIAL CONVERSION AVAILABLE TO REMOVE THE FUEL ADDITIVE SYSTEM). Ref uts71308

2009 (58) Renault Premium 450 6x2 Comfort Trim 3950mm Wheelbase Rear Air Suspension, Mid Li Axle, 12sp Opdrive Gearbox, 545,000kms. OFFICIAL RENAULT CONVERSION AVAILABLE IF REQUIRED SO NO FUEL ADDITIVE NEEDED . Ref uts114378

2011 (11) Renault Premium 460 6x2 Premium, Comfort Trim 3950mm Wheelbase Rear Air Suspension, Mid Li Axle, 12sp Opdrive Gearbox, 736,000kms. OFFICIAL RENAULT CONVERSION AVAILABLE IF REQUIRED SO NO FUEL ADDITIVE NEEDED . Ref uts114881

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2011 (11) Volvo FH 460 6x2 Globetroer XL, Comfort Trim 3900mm Wheelbase Rear Air Suspension, Mid Li Axle, Euro 5 Engine, 12sp I Shi Gearbox, 544,000ms. (OFFICIAL CONVERSION AVAILABLE TO REMOVE THE FUEL ADDITIVE SYSTEM). Ref uts66247

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RH D 2009 (09) Volvo FH 520 6x4 Globetroer Comfort Trim 3200mm Wheelbase Rear Steel Suspension, 9T Front Axle, 70T Design Weight, Euro 4 Engine, 14sp Manual Gearbox, 382,000ms. (OFFICIAL CONVERSION AVAILABLE TO REMOVE THE FUEL ADDITIVE SYSTEM). Ref uts106162

RH D

Comprehensive stock of quality vehicles

2010 Volvo FH540 6x4 Double Drive 150 Ton Globetroer, Comfort Trim, 3200mm Wheelbase, Rear Steel suspension, 9T Front Axle, Hub Reducon Rear Axles, 150T STGO CAT1, Euro 5 (OFFICIAL CONVERSION AVAILABLE IF REQUIRED TO REMOVE THE FUEL ADDITIVE SYSTEM), 540 bhp, 14 sp MANUAL Gearbox, Underbunk Fridge, Top Lightbar, Beacon Bar, Only 290,000 Kms. Please quote Ref uts85228

2012 (61) Renault Premium 460 6x2 Comfort Trim 3950mm Wheelbase Rear Air Suspension, Mid Li Axle, 12sp Opdrive Gearbox, 800,000kms. OFFICIAL RENAULT CONVERSION AVAILABLE IF REQUIRED SO NO FUEL ADDITIVE NEEDED . Ref uts111283

Trade & Export Hotline

+44 8445 791222

email: enquiries@tradeandexporrucks.com web: www.tradeandexporrucks.com search: tradeandexporrucks

2011 (11) Volvo FH 460 6x2 Globetroer XL, Comfort Trim 3900mm Wheelbase Rear Air Suspension, Mid Li Axle, Euro 5 Engine, 12sp I Shi Gearbox, 596,000ms. (OFFICIAL CONVERSION AVAILABLE TO REMOVE THE FUEL ADDITIVE SYSTEM). Ref uts66331

Craig Stark Trade and Export Centre 101 Lancaster Way Business Park Ely CB6 3NX Tel: +44 7834 160451

fesarta COMMENT

Applying ourselves FESARTA, Transport Logistics Consultants (TLC) and the International Road Transport Union (IRU) have teamed up to assist truckers in finding suitable rest areas along the North-South Corridor.

ll three partners have exten-

sive experience with both the North-South Corridor and in route monitoring. In the spring of 2005, TLC was awarded the World Bank Monitoring Contract at Beitbridge, through FESARTA. While busy with that project, the company’s focus shifted to professional monitoring and development of a computer program to cater for the needs of users of the corridor, as well as other transport corridors in Africa.

on average, one driver in six was the victim of an attack by organised crime. Twenty per cent of those drivers were physically assaulted; 70% of attacks happened at night; 40% of the attacks happened in parking areas; and 60% of the attacks targeted

Fesarta is helping to make truck parking safer

discover the languages spoken by drivers in nearby parking areas. Using the app, it is possible to search, locate and contact parking areas and fuel stations in close proximity or up to 400 km away, and along planned itineraries. Advanced search options help find facilities with extras like security guards, cameras, fencing or floodlighting. The app also ranks facilities on their security and comfort ratings, as supplied by other corridor users. Using TRANSPark, truck drivers are able to plan their routes and rest stops in floodlit, guarded areas from Durban to Dar es Salaam, and all along the way in Botswana, the DRC, Malawi, Mozambique, Zambia, Kenya and Zimbabwe. An upcoming release will enable drivers to identify the locations of border posts, weighbridges and toll booths and there are further plans to include GPS tracking capabilities, which would enable fleet operators and corridor management organisations to find trucks, monitor transport times and analyse delays at key checkpoints. Anyone with a smart device and Internet connection can download the TRANSpark app, free, from either the Apple iStore or Google Play right now.

Drivers will be able to plan their routes and rest stops in floodlit, guarded areas

The IRU, as a world road transport organisation, upholds the interests of bus, coach, taxi, and truck operators to ensure economic growth and prosperity through the sustainable mobility of people and goods by road. Truck drivers often have to stop at unsafe roadside locations or at unsecured, uncomfortable parking areas. The author Mike Fitzmaurice A 2012 survey of over is the CEO of the 2 000 truck drivers Federation of East from 31 countries in and Southern African Europe showed that, Road Transport Associations. over a five-year period,

TWA | Jan/Feb 2016

the vehicle and its load. At the time, the cost of the piracy was estimated at €7 billion.

There’s an app for that In response, and developed by the IRU, TRANSPark is a free online application for Apple and Android devices that helps truck drivers find secure and comfortable parking areas in over 40 countries worldwide. Originally created to prevent freight and fuel theft, the app lists security features available for each parking area, as well as usable amenities to improve driver comfort while out on the road. The app’s online community makes it easy for drivers and managers to communicate and stay connected throughout the entire journey, while a check-in feature helps users

www.fesarta.org

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Regional News

Read more on www.transportworldafrica.co.za

east Africa

Carrier links Johannesburg to Zanzibar Fastjet commenced daily flights to Zanzibar from Johannesburg on 11 January 2016, using Airbus A319 jet aircraft with seating for up to 156 passengers. Flights depart Zanzibar’s Abeid Amani Karume International Airport at 09:30 and land at Johannesburg’s O.R. Tambo International Airport at 13:20, with the return flight from Johannesburg departing at 14:10 and landing in Zanzibar at 19:40 (all local times).

Flights in both directions involve a 30minute stopover in Dar es Salaam, but Zanzibar/Johannesburg passengers do not need to disembark the aircraft, with all luggage checked through to its final destination. One-way fares from Johannesburg start from R1 704, and fares from Zanzibar start at R1 860, making a return flight to the Spice Island from Johannesburg R3 564, including all airport and government taxes.

Previous Fastjet flights to the popular tourist destination were restricted to daylight flights and involved transfers and luggage collection on the ground in Dar es Salaam.

The carrier had previously partnered with Dar es Salaam-based Coastal Aviation to fly passengers to Zanzibar

SADC

Luanda readies international airport A new international airport, 30 km from Luanda in Angola, is due to commence operations in 2017. Construction of the $3.8 billion facility is being overseen by China International Fund Limited. The new airport will include a 160 000 m2 passenger terminal and a 6 200 m2 cargo area to process an expected 35 000 tonnes of cargo annually. It will be equipped with two double runways and have the capacity to receive Airbus A380s. The northern airport runway will be 4.2 km long, while the southern runway will be 3.8 km long. Each will measure 60 m wide. In addition to new access roads, the airport will have a direct rail link to the Angolan capital. Luanda, Angola

TWA | Jan/Feb 2016

Puma Energy has opened a bitumen and fuel terminal in Mozambique, creating 77 jobs for Mozambicans. “Mozambique is a very promising market in Africa today. We have confidence in the country’s long-term commercial opportunities as well as the country’s strategic location to answer the supply requirements of Southern Africa,” says Christophe Zyde, COO, Puma Energy Africa. The company already has storage facilities in Beira and a bitumen operation in Matola, and says Mozambique will no longer be dependent on bitumen imports from neighbouring countries, adding that the fuel terminal creates a channel for the cost-effective, secure supply of fuel to the Southern African Development Community (SADC) sub-region. “Our focus is on integrated midstream and downstream operations, which means we can achieve significant economies of scale and operating efficiencies. This translates into competitive costs, managed risk, secured supply and seamless delivery,” says Sophonie Babo, the company’s general manager for Mozambique.

Regional News South Africa

Factors behind port productivity outlined According to Accenture, port productivity is based on two main factors: terminal infrastructure, and processes and governance mechanisms. It says that, while terminal infrastructure challenges can be resolved through automation and capital investment, productivity remains dependent on addressing uncompetitive practices. The company believes reforms should address “the perverse incentives for harmful behaviour that create artificial delay and congestion at ports”. It highlights the importance for different stakeholders – port owners, operators, shippers and stevedores – to understand the need to increase throughput as the only way of increasing trade and development vital for growth. It adds that companies, particularly those driving infrastructure development, must dare to devise, test and scale new approaches to drive future growth and prosperity. Efforts by leading companies suggest this change is already happening – successfully – and that it cannot be avoided. Organisations, regardless of their market, geography or industry, must now lay the foundation for a new way of doing business that will enhance the customer’s value proposition and revenues, while improving resource productivity and reducing costs. As Africa stands on the brink of a demographic dividend, the rising consumer class presents enormous new opportunities. Fast movers can get to the prize first, with innovations that leverage scalable and cost-effective technologies and collaborative partnerships.

South Africa

South African ports wisen up

SADC

Beitbridge welcomes Gateway truck stop Engen has launched the Gateway truck

Plans are under way to expand the current site from a four- to a ten-bay refuelling forecourt

stop at Beitbridge, Musina. The site was taken over by the company last year and has been upgraded with new equipment and added functionality. The eFuel Wireless facility and Engen Diesel Card have been incorporated into the venue. The truck stop offers ablution facilities, showers and security fencing with controlled access. A wellness clinic operates daily from 08:00 to 16:00.

Transnet’s Integrated Port Management System (IPMS) has been rolled out at the Richards Bay port, the last of South Africa’s eight commercial ports to implement the R79 million web-based system. The MS Insignia passenger vessel was the first ship to be brought into the port using the smartPORT technology. IPMS replaces manual processes that were previously used for monitoring marine operations, vessel traffic services and terminal performance, and enables key port operations to be managed online and in real time. Since IPMS was first introduced in July 2015, more than 300 vessel agents have registered on the system and more than 1 600 vessel arrival notifications have been submitted across all eight ports. “This journey began in 2008 and is the culmination of various feasibility studies where we identified the need for an automated and web-based system to improve port operations, strengthen efficiencies and enhance competitiveness,” says Richard Vallihu, chief executive, Transnet National Ports Authority. According to Vallihu, IPMS has been benchmarked against Malaysian and Singaporean ports as they are known for their efficiency. Preston Khomo, port manager, Richards Bay, believes IPMS will bolster transparency and efficiencies in the port, while enabling enhanced business continuity.

TWA | Jan/Feb 2016

Cover story

Globaltrack

Johannesburg-based Globaltrack, a Technology Top 100 award winner, uses a combination of GPS, GPRS and satellite tracking technology to help organisations accurately monitor their fleets, locally and across the African continent.

he company’s core belief is

to make transport cheaper, simpler and better. As such, it doesn’t see itself as merely a tracking company, but rather as a consulting firm, whose single aim is to help the transport industry. Its dedicated consultancy department allows it to be hands-on, get grease under its fingernails and intimately understand the sector.

Globaltrack provides the tools, know-how and the expertise to slowly and steadily increase its customers’ bottom lines. Customers are seen as partners, with loyalty being the ultimate measure of success. CEO Pieter Smits says his is an entrepreneurial company not dependent on the growth of the economy. “Our customers are not new to tracking and fleet management; we take them away from our competitors. There is not a single customer that we have signed up in the last three years that didn’t have tracking before,” he says. Customers feel like partners, because the company believes it needs to add value; it needs to make its customers happy. It

does this by removing their pain points, like capturing and loading of weigh points and depots when transporters switch telematics service providers. With the transport business always on the go, they partner with their clients, who can focus on their core business without the disruptions caused by switching systems.

Switch it up Globaltrack fleets are remotely monitored, in real time, through the use of GPS and GPRS technology. When vehicles enter remote areas with little or no mobile network coverage, tracking automatically switches over to satellite, while sending live updates to the company’s web-based monitoring centre, Webtrack. Webtrack is hosted by Amazon Web Services (AWS), which is both scalable and cost-effective – benefits that are passed onto customers. Security is provided through SSL encryption and off-site backups are

“If you don’t get triple the value of the system costs back within three months, we remove it.” Under the leadership of CEO Pieter Smits, Globaltrack has become a pivotal provider of telematics and fleet management solutions

TWA | Jan/Feb 2016

performed on different continents. “We try to find the balance between usability and security. From day one, we’ve used a web-based solution so that we can perform updates remotely. Using a webbased server creates a single point of entry for data. Our uptime was 99.8% in 2015,” boasts Smits. With satellite capability, the company is well positioned to serve the cross-border trucking fraternity, which Globaltrack believes will increase as more positive trade conditions between African states develop. The Globaltrack system is also linked to a fuel-level monitoring device called Fuel Probe, which helps organisations monitor driver behaviour, curb fuel theft and increase the efficiency of cost management. With vast amounts of historical data stored on the Webtrack, a fleet manager can retrieve this data whenever it is needed. With a click or two, one can pull this data into reports that can readily provide a complete picture of an asset’s performance. One staff member, with a PhD in mathematics, is responsible for machine learning and big data mining. Learning from this data gives

Cover story Globaltrack the ability to predict trends and the foresight to warn its customers about future events long before they happen.

Mobile generation Using the Globaltrack app, it is possible to see which trucks are driving and which are standing still from anywhere in the world. Users can get realtime fuel alerts, for example, when drivers fuel up in unauthorised locations. This is a critical tool in cross-border transport, where fuel is frequently smuggled. It is also possible to call a driver from the app directly or forward his/her details to your end customer. In this way, your customer’s customers can receive audited information about the location of their goods directly. Emailed notifications can be automatically scheduled the moment a load arrives at a border post, leaves a port or arrives at a yard.

Consultative Globaltrack professionals are on hand to train clients’ employees on how the system operates, to ensure they utilise the system effectively and gain maximum benefit. A growth specialist, through vigorous consultation with clients, performs a business audit and, thereafter, assists clients to integrate the system for optimal use. “We want to understand our customer’s business,” continues Smits. “So, our first port of call is to see the customer’s yard and look at their operations, because every company is unique. We then come up with a recommendation based on what we think the customer should do. We always provide two or three options. They then have a demo period in which we prove that we can solve what we refer to as their ‘pain points’.”

challenges becoming more Globaltrack customers can sophisticated. With this vast either enter into long-term leaschange, we keep our fingers ing contracts or pay on a monthon the pulse, providing to-month basis, provided they innovative solutions to all buy the hardware upfront. our fleet management serThey also have the option to vices and ensuring that all suspend the unit should a our products are adaptvehicle stand for a while, able and add value,” with billing automatically Smits adds. commencing once the “As a fleet management stationery vehicle is driven service provider, we aim to a certain distance. reduce complex challenges “If you don’t get triple to simple solutions. And this the value of the system Clients have access to comes through our vast, turnkey costs back within three Webtrack from a variety of solutions tailor-made for a variety months, we remove it, desktop and mobile devices of clients. We are in the business no questions asked,” of knowing and empowering our he says. “Our systems must work for company MD’s as much clients with knowledge to ensure that they as for operations, fleet and maintenance make the most informed and cost-effective managers. We always have about four decisions in their day-to-day operations.” or five people in mind when we develop Multinational our software.” Should a local transporter suddenly secure This year, Globaltrack opened another office a cross-border contract, but not want to pay in Kenya to serve the East African market exorbitant data roaming costs, they can and add to its presence in South Africa, have their unit switched over and replaced Mozambique and Mauritius. Its staff comwith a hybrid unit that uses the GSM and prise a multitude of local, African and international experts that add diversity and persatellite technology. Globaltrack’s maintenance module allows spective, which better positions Globaltrack users to keep an eye on vehicle mileage to test new markets and check their viability, and maintenance procedures. These tasks and thereafter pursue the market formally. Its background in cross-border transcan be scheduled ahead of time and can also be used to closely track costs or port monitoring means it is equipped create trend analyses. The system alerts with market- and country-specific knowlfleet managers of upcoming maintenance edge, which informs how it designs and procedures like oil and tyre changes based implements solutions for a wide spectrum on kilometres travelled or driver behaviour, of countries. such as harsh acceleration and braking.

Innovative Innovation is at the core of the company’s existence. “We understand that we live in an ever-changing world, with business

www.globaltrack.com

Mobile technicians can install units at any point during the 24/7 time cycle, so as to not impact operations TWA offers an ideal platform to maximise brand exposure through the publishing of a cover picture and a two-page cover story targeting the right audience. To secure your booking, contact Vinny Reddy +27 (0)11 233 2600 | vinny@3smedia.co.za

TWA | Jan/Feb 2016

Commercial Vehicles

Looking outward The Volvo Group will shift focus from the South African market to other markets on the continent this year, as the local economy lags and opportunities for growth emerge elsewhere. By Tristan Wiggill

ddressing the media at

the company’s annual press conference and luncheon, Torbjörn Christensson, president: Volvo Group Trucks Southern Africa at Volvo Group, said the company was committed to building a better network outside of South Africa and was looking to attract the interest of new importers in Zambia, Kenya, Tanzania and Uganda.

He added that it was becoming harder to convince Sweden to invest in South Africa as the rand slides and the international perception of the currency sours.

African focus

been obliterated by the current global commodity crunch. “In Angola, they have 6% of the market left. We used to sell almost 800 trucks in Angola a year. Last year, we invoiced around 30 or 40 units. So, there are worse places to sell trucks than South Africa. But, we see growth potential in Africa. What we lose here, we could gain outside South Africa if our plans are correct. We have signed agreements with new importers and are changing importers in Kenya, Tanzania and Uganda this year. We have quite a successful set-up in Ethiopia, where we are renewing our footprint. And, we have set up a dedicated organisation focused on this,” he says.

Christensson explained that, in the past, the group’s sales outside of South Africa totalled around 10% of all vehicles sold. Local market But, the intention is to get this figure to A single entity, Volvo Group Southern around 30%, as South African transporters Africa, comprises the brands Volvo expanded into Africa. He is optimistic about Trucks, Renault Trucks and UD the export markets, which, he believes, Trucks. In 2015, the group have growth potential – albeit from an admittedly low base. While opportunities for the group exist in Africa, particularly in East Africa, some commodTorbjörn Christensson, president, ity-based economies like Volvo Group Trucks Southern Africa Zambia and Angola have

“Volvo Group is looking to attract the interest of new importers in Zambia, Kenya, Tanzania and Uganda.”

TWA | Jan/Feb 2016

commanded a 15% share of the total truck and bus market in South Africa, with 24% of that in the heavy-duty segment, 21% in the medium-duty sector and 6% in the total bus market. The UD Quester launch, in April last year, was deemed a milestone for the group, with a record 218 UD trucks sold in September last year. “If you look at vehicle sales released by Naamsa, the total commercial vehicle market declined by 4% and the heavy-duty segment declined by 2%. We had a forecast of plus a few per cent over 2014, so the market has not been as good as we anticipated. Looking forward, GDP growth is planned for 1% this year. We hope for higher, but this is what is predicted. “If you look back, we had 15% of the total SADC commercial vehicle market last year, including 1% of the light-duty market, which we have now left. Market-share-wise we are quite happy.”

Growing concern Christensson said the group was concerned with the fortunes of the local currency. “The scope of the rand’s depreciation is not yet fully known. We don’t know where the end of it will be

Commercial Vehicles

Volvo and Renault trucks are popular choices in the used market

or if it will bounce back. I think we have a problem with our international perceptions. “The board are extremely cautious at the moment. We did a lot of investment last year and I am sure it will not be the same this year. That money will not be allowed to be spent this year. Everybody wants to wait and see what is happening here. Uncertainty is affecting us. Imports will be more expensive and interest rates have increased. Of course, our pricing will, over time, have to be changed as well. To use a simple analogy, we have lost 15% of our salaries but are expected to find 5% more for our employees. The equation is impossible to balance at the moment. We are anticipating a rather tough year,” he said. “The time for investments in South Africa has passed. Into the future, we need to invest 30% or more outside of South Africa because we are building up the network. But, we will have to wait for one or two years. There are good markets like Ethiopia, Kenya, Tanzania and Uganda; however, the oil and mineral economies are struggling. Two years ago, Africa was the rising star; now, perhaps, it is the rising star that moves a little slower.” Christensson described the situation in South Africa as complex. “Lately, there has been too much negativity – and it is this that is evaluated. It is not an easy labour market, nor is it an easy market to invest in, and there are visa problems and travelling restrictions. It is not set up to be the dream scenario for investors. Before, it was certainly easier to get money to invest. But, our board members are clever; they see that there are a lot of opportunities as well. We are here for the long term and have a good footprint,” he said. Describing the 2016 outlook as “flat”, Christensson said the group was on a drive

to lower its operating expenses and upskill its staff. “Our customers will not have an easy year, but we will do whatever we can to help them as they drive their vehicles harder. We will launch a better finance product during the year because we have noticed the banks are less willing to lend people money to buy trucks,” he explained. Christensson added that the company had achieved success in other areas of the business, such as with maintenance contracts and the aftermarket, which, according to him, were growing. “This year, we are reviewing our Volvo Trucks dealership facility in Durban, which will be revamped and expanded,” he indicated.

New products

only be available as completely built-up (CBU). Volvo trucks will continue to be assembled as CKD in Durban, while UD trucks are assembled CKD in Rosslyn. “We are in the finalisation stage of the UD Trucks medium-range product. We are due to introduce it in mid-2016. We made the decision that we would not produce Renault CKD units here, but sell them on as CBUs and especially in the markets outside of South Africa, where Renault is quite a successful brand. We will continue to service and sell Renault trucks but not build them locally. The volume is not economically feasible.” The group’s Durban assembly factory is not expandable and the UD facility in Pretoria is well positioned, so it is unlikely that the two would be combined under one roof. Recent changes to the company’s organisational structure resulted in a slight reduction in staff, from around 980 to 940, he concluded.

Christensson said a new, medium-duty product, based on the UD Quester, would be introduced in the middle of this year. “For Volvo in South Africa, we have what I would call a minor facelift of the FH coming A new dealership in during the year.” Bloemfontein formed He said the part of a R100 million group had decidinvestment made by the ed to stop importVolvo Group last year ing completely knocked-down (CKD) units for assembly of Renault Trucks in Durban, due to the economic nonviability thereof. Renault Trucks have always been assembled CKD in the company’s Durban assembly plant and will now

TWA | Jan/Feb 2016

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Preference shift South African truck buyers have warmed considerably to automated manual transmissions (AMTs), as Tristan Wiggill discovers.

nitial demand for AMTs in the South African market came from the extra-heavy segment, where the transmission was credited with increasing the service life of clutches. “I would estimate that, over the last five years, there has been a shift to AMT vehicles of around 30% in South Africa – that is, from 20% of the trucks sold in 2010 to 50% of the trucks sold in 2015,” says Andreas Brück, engineer: OE Sales and Application: Truck and Bus at ZF Services South Africa. While the automated solution has become more common in the medium and heavy segments, having proven itself in the extraheavy market, AMT use in the light commercial vehicle segment is also showing steady growth, particularly in recent years. “Since we launched the AMT Duonic transmission last year, sales of Fuso trucks have increased by 40%, says Kobus van Zyl, executive director: Sales and Marketing at Daimler Trucks & Buses. Apart from increasing the lifespan of transmissions, the technology is also credited with positively influencing safety, by allowing drivers to better concentrate on the road, while reducing driver fatigue caused by continuous clutch

engagement and disengagement. This is a significant plus in a region of the world with extraordinarily high vehicle accident rates. The ability of AMT to reduce fuel consumption, by operating in a “green band”, means that it actively contributes to a transporter’s bottom line. AMTs can cope with higher payloads and there are savings to be had in transmission servicing and repairs. Furthermore, AMT creates the opportunity for transport operators to reduce maintenance costs in a way that doesn’t endanger their drivers or other road users.

Sophistication Brück says the complexity of AMT lies in the software used in the programmes that ensure correct gear selection and economic driving – two of AMT’s strongest selling points.

He says accurate production costs are difficult to define. “Local fitment costs can be kept to a minimum, provided the model of vehicle is available abroad with the transmission already approved. The cost of AMT in terms of hardware is not significantly more than its manual counterpart, as the production volumes of AMT variants are steadily increasing. There is, howAMTs still suffer from a perception problem among many drivers, some of whom swear by their more macho manual transmissions

ever, a nominal additional cost incurred by the introduction of the automated shifting system and accompanying electronics,” he explains. Older manual transmissions typically have 16 gears, with drivers having to concentrate on changing them properly. The grating of gears in these vehicles is, therefore, not uncommon and, if a driver makes a mistake, they sometimes have to start again from standstill. AMT, on the other hand, comes into its own when laden vehicles are driven on an incline. “Driver errors were proving to be very expensive for vehicle operators and, as a result, fleet owners started to demand that drivers have less influence on the entire driveline,” concludes Brück.

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BPW Axles (Pty) Ltd • PO Box 82545 • Southdale 2135 • Johannesburg Tel (011) 681-3300 • (011) 680-1443 • Fax (011) 680-1829 E-mail: bpwsales@bpw.co.za • Website: www.bpw.co.za

we think transport

trailers

BPW

Direction and drive BPW Axles South Africa’s MD, André Cilliers (left), tells Transport World Africa why being expensive gives his company the edge.

ur axles and running gear are the most expensive in the market,” he says proudly. “But we sell low cost of ownership – the guiding principal behind the brand.” Cilliers understands that companies prepared to pay a premium have higher expectations and concedes the pressure is on to provide premium-level product support and above-average end-user focus. While the company prioritises transporters, it doesn’t sell anything to them directly. “We spend a lot of time with them because they create a ‘pull effect’ for us, by specifying our products when commissioning trailers,” he explains. He says BPW Axles is a mobility partner to transporters and a system partner to trailer builders. Diversification comes from its aluminium wheel, mudguard, superstructures and associated trailer component arms. Parts are sourced from Europe, either from independent groups or specialist companies within the BPW group. Most of the listed transport groups, as well as many private operators (from small

Through automation and technology, human error has been largely eliminated from the assembly plant

to very large) support BPW. “The mobility of a transport fleet relies on spare parts availability and a national distribution network – two areas in which we excel. We have a call-out team that is available, nationally, and a widespread network of parts distributors has been formed throughout Southern Africa,” he says. In addition, a full-time team travels to transport operators, independent workshops and parts distributors, from Dar es Salaam in Tanzania to Cape Town and across the continent’s east-west axis, to provide maintenance training. Focus points include trailer and/or running gear maintenance, disc brake operation and spare parts identification. Practical demonstrations are also given. Cilliers says BPW South Africa’s market share has grown to around 30% and

estimates that more than one in five trailers of the estimated 180 000 registered on South Africa’s e-Natis system are equipped with its axles. Numerous players offer alternatives and/ or copied axle designs and several trailer builders offer a choice of axle origin. It has, however, been proven many times over that they do not match the durability, low cost of ownership (through less maintenance), flexibility of application, and in many cases, the weight advantages of the BPW product range. “We have superior ‘pre-sale’ service and our engineering – specifically our application engineering capabilities – are market-leading. We receive a knock on the door whenever something requires special attention and technology. We use a modular system that allows us to create a solution for whatever purpose is required,” he explains. “I don’t know of any Performance Based Standards (PBS) vehicles on the road today not operating with our running gear,” he states. Supplying PBS vehicles means providing a certain type of engineering support and simulation to confirm several performance characteristics. Being one of 50 subsidiaries of a German parent company, established in 1898, affords the company a premium, well-engineered perception. This is backed up on the ground by an extended three-year/unlimited kilometre warranty on its running gears. The company is ISO 9000 listed and is audited by international company. Cilliers says the company has taken significant steps to eliminate the possibility of human error creeping into its assembly line. Among other mechanisms, it uses specially developed computer software and cameras to inspect components before they leave Johannesburg. TWA | Jan/Feb 2016

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Organised by

tyres

Calculated response Tristan Wiggill learns how established tyre brands prove their worth in tough operating environments.

ost tyre suppliers in the market today have a range of suitable tyres for cross-border, long-haul transporters. Despite this, tyre research and development is ongoing. Several tyre suppliers are involved in a number of studies designed to document and detail tyre wear rates and are trying to find ways of improving the tyre casing integrity of their products. “We are always looking to improve tyre casings and the retreadibility of tyres, and we work with selected fleets in this endeavour,” says Peter van Rooyen, executive manager: Exports at Bridgestone South Africa. While a challenge for African tyre suppliers is dealing with high ambient temperatures, they are also under great pressure from transport operators. Van Rooyen explains: “The problem for transport operators is that they want/need a suitable tyre, right now, and cannot wait two or three years for tyre suppliers to complete research and development into tyres that would be better suited to the conditions they operate in.” The good news for these operators, however, is that much of the damage caused to truck and trailer tyres can be limited, immediately, simply by paying more attention to appropriate tyre pressures. He says many cross-border operators no longer fit retreaded tyres, preferring to use new tyres. “It is commonplace for operators to fit premium-brand tyres on the steering and drive axles of their trucks, and use cheaper, inferior tyres on the other (trailer) axles,” Van Rooyen explains. He adds that, in many instances, Chinese tyre brands are being used on truck trailers, although tyre choice is also largely influenced by the truck and trailer configuration employed, the origin of the vehicle and whether the vehicle is new or used. Unlike South Africa, many African states have minimal load restrictions, which,

apart from contributing to gross vehicle overloading on the continent, plays a role in tyre construction and load factor. Tyre suppliers need logistics service providers to constantly feed them information, so that common problems and trends can be identified. In Bridgestone’s case, it acquires and compares its tyres to readily available tyres sold in the regions where problems are occurring, to help it gain further insight.

Buying cheap is expensive The company wholesales its tyres directly

“Transporters should use costper-kilometre calculations when choosing a tyre supplier.” into the countries in which it has distribution agreements, in order to keep a degree of control. Competition in Africa is rife and, apart from major players and recognisable brands, the continent is beset with Chinese, Korean and Indian tyre brands, which dominate the SADC and East African tyre markets. Many of these tyres are dumped into Africa, having been rejected by strict North American and European tyre standards, which are designed to protect consumers as much as the tyre supplier industry in those regions. Cheaper tyre brands face their own challenges and, inferior quality perceptions aside, are challenged to find buyers of excess stock. These brands trade on volume, whereas premium tyre brands do not, with the known brands protecting themselves by advocating that transporters use cost-per-kilometre calculations when choosing a tyre supplier, which often reveals their longer-term superiority and cost-saving benefits. TWA | Jan/Feb 2016

fleet management

hat are the

risks associated with transporting abnormal loads by road? AN A load

can be classified as abnormal based on its height, width, length, and/or weight. Transporting abnormal loads by road is slow going, with the greatest risk posed to other road users. Impatience, lack of understanding, and low levels of awareness are the main causes of incidents on the road. There is not much room to manoeuvre and even less room for error. Drivers are required to ensure the safety of their load, other road users, and themselves.

Heavy going

Trouble-free abnormal loads transport boils down to effective planning. Given the prominence of project cargo going into Africa, Transport World Africa learns more about the art from Andrew Nicholson.

TWA | Jan/Feb 2016

What is the biggest mistake companies make when transporting abnormal loads? The biggest mistakes include incorrect truck configurations and trucks and trailers that run overly large loads. These practices pose extreme safety risks, damage road surfaces, slow traffic, and inevitably cost the taxpayer money.

How can the risks be mitigated? The most effective way to mitigate risk is through continuous and meticulous training. By ensuring that you have an exceptionally trained team of both truck and escort drivers, you lower the risk of incidents. Increasing the defensive driving skill of drivers also increases their level of awareness and anticipation, which should lower exposure levels to third-party incidents. Advanced fleet management systems that can perform a range of monitoring functions – remotely and in real time – further reduce risk. It is important to prioritise and adequately resource route planning, ensuring that loads travel the safest routes to their destinations. Failing to plan the route diligently causes delays and congestion, along with bridge crossing, access challenges, and other traffic-flow issues through and around towns and cities.

quickly. Sometimes transporters offering the cheapest rates end up costing more, due to the many hidden costs on route.

How are permanent structures and infrastructure dealt with?

What does this planning entail? It entails detailed

load transport easier and safer? Monitoring and

route surveys and discussions and bookings with traffic officials, should police escorts be required. Adequate briefing of drivers is needed to ensure a comprehensive understanding

management systems generate and maintain professional driving cultures. Management and drivers integrate these tools into every aspect of their working lives to maximise the safety benefits for everyone.

“Prioritise and adequately resource route planning.” Andrew Nicholson, MD, Barloworld Transport

of the route and the on-road risks associated with it. It all boils down to advanced planning before loading.

What technologies are making abnormal

What is the most costeffective way to transport abnormal loads within South Africa? Most

certainly by road, granted you select the correct partner who looks at the whole journey and ensures safe, efficient, and effective transport. Holdups and on-road issues can become hugely costly very

Planning, planning, and more planning. These obstacles are identified and highlighted as high-risk areas during pre-load route surveys. Drivers are briefed prior to being dispatched and these areas are clearly highlighted in such briefings. Once encountered en route, they are carefully scouted before further progress commences.

What steps are taken to limit damage to vehicles and road infrastructure? Planned job observations are conducted during the loading, lashing, and transporting processes. Technology is also used to ensure that we place the correct load on the correct vehicle configuration. In so doing, we ensure that all loads meet the legal requirements with regards to axle mass and load distribution.

fleet management

Roam with a

view

New SIM card technology is having a profound impact on vehicle monitoring, writes Tristan Wiggill.

significant problem for cross-border transporters and cargo owners exporting or importing goods into Africa is the limited visibility of their vehicles and loads. Exorbitant data-roaming costs mean many rely on satellite-based methods, which lack the immediacy and accuracy of GSM-based alternatives. “Service providers like Vodacom are pushing the use of prepaid data for cross-border roaming, which reduces data-roaming cost risks,” says Kees Snijders, managing director at Flickswitch. Previously, highly sophisticated methods had to be used to limit data-roaming costs, but this meant many SIM cards were not properly provisioned. “There are a host of different types of SIM cards on the market today, with clients able to dictate what functionality they want from their SIM cards.” While GSM technology is an improvement over satellite tracking, not all SADC countries are adequately covered. “Vodafone has a global data services platform with set pricing structures and data-roaming agreements in place. Costs can vary greatly in Africa – from R5 per megabyte of data to R370 per megabyte. Various telecommunications providers are used, but the degree of 3G penetration means that, sometimes, you’re lucky to get 2G connectivity,” he says.

Migration Vehicle monitoring has, over the years, moved from stolen vehicle recovery towards fleet telematics. “Technology has largely remained the same, but customer requirements have changed substantially.

Customers want to know where their assets are and how they are being used. It is no longer just about assets, but also about fuel-theft monitoring,” says Harry Smith, executive: Sales and Marketing at Skygistics. Because monitoring hardware has become commoditised, good-quality tech can be acquired easily. “There has been a move towards greater systems integration and more management data is being produced. Insurers are finding greater value as driver profiling is becoming more accurate and is no longer based on gender, age or driving experience. Systems are also becoming more cost-effective in terms of the telematics units themselves,” he adds. On-board video, with audio, is gaining in popularity as it adds two extra dimensions, with the insurance industry no longer having to rely on driver perception and memory. A carrot and stick approach is also resulting in improved driver behaviour. “Drivers on long-haul journeys cook, smoke and pick up passengers. But technology is being used to drive change within various organisations, by showing drivers that they are not as good as they think they are.” More management data is still required, though, because the tracking industry has reached a level of maturity. While features and functionalities are similar, the

difference lies in the number of management reports produced. “Telematics is becoming a business intelligence tool. Logistics service providers want to manage their operations from the cradle to the grave and have a single logistics view,” he says. While GSM growth in Africa is massive – second only to China – the continent still suffers from network coverage issues. The further north of South Africa one goes, the bigger the monitoring challenges become.

Under-utilised Enhanced integration between telematics systems and more operational planning tools are required to paint the entire telematics picture. But, some telematics suppliers are unaware of how widely these systems can be applied. There are major logistics service providers today using powerful telematics technologies in limited ways, says Charel Schickerling, MD, DPS South Africa. “There is definitely a need to educate the marketplace – to get the industry to understand the bigger picture, instead of just concentrating on singular aspects. Numerous telematics suppliers concentrate on single aspects and expect the industry to use the technology only in cases of emergency or during crisis management,” he says. “Today’s telematics systems are highly sophisticated, and can provide much more than we’ve seen up to now.”

“Driver profiling is becoming more accurate and is no longer based on gender, age or driving experience.”

TWA | Jan/Feb 2016

corridors

Africa’s main vein The North-South Corridor from Durban to Dar es Salaam in Tanzania is arguably Africa’s most important trade route of all, writes Tristan Wiggill.

ut, while the above statement may hold true, for South African companies, the North-South route is still too heavily skewed in favour of exports. Very simply, not enough containerised cargo is being moved in and out of the country along this route. “Most cargo transported by road to Tanzania is projectwork related and frequently includes things like engineered goods, mining equipment and chemicals. Most other consumer goods are imported by Tanzania directly from Asia, along long-established shipping routes,” confirms Dune Reddy, owner, Reddy Logistics.

Fits and starts There are multiple stop-off points for truckers along the 4 000 km plus road journey from Durban to Dar es Salaam, with drivers typically making use of the rest facilities

TWA | Jan/Feb 2016

above Additional one-stop border posts could eliminate border congestion figure 1 Tripartite North-South Corridor

provided in larger towns and cities for safety, infrastructure and fuel-quality reasons. Reddy says there is a big drive to improve the quality of truck stops, especially in Zambia. Hospitalities aside, the general rule of thumb is that the further north from South Africa one goes, the less developed

truck stop facilities become. Diesel quality is also seldom at the level available in South Africa, where 50 ppm diesel is regularly and widely available. Instead, diesel outside South Africa is predominantly of the 500 ppm variety and known to be dirtier than the South African equivalent. Paying for fuel with cash continues to present problems for drivers, who are already highly susceptible to criminal elements. Parking fees have to be paid wherever drivers choose to sleep and, while a level of cashless payments does exist, particularly

corridors

in Botswana, the fallibility of GSM connectivity in the region and the need to carry cash for border processing means that this vulnerable form of payment cannot be eliminated.

Alternatives Given the loads carried and distances travelled, rail offers the obvious alternative to road transport along the corridor. The efficiencies of rail simply outweigh the costs and speed of road haulage. It, therefore, comes as no surprise that governments are looking to move rail-friendly freight from road to rail along corridors like this. In early 2015, the value of rail projects across Africa was estimated at $495 billion – a significant investment in a continent where less than 15% of all freight is carried by rail and where urban centres have only just reached the required numbers to make mass intercity metro transport a viable possibility. However, switching to rail is a complex decision for cargo owners. While existing state-owned entities and other operators are in place, the planning and regulation of the various rail systems differs in vision, content and implementation. Yet, the biggest factor contributing to delays in cross-border rail movement is not related to customs, immigration or other border-related procedures, but instead the lack of coordination among national (monopolistic) rail systems in the region. Specifically, the problems relate to a lack of reciprocal access rights among national operators and a failure to coordinate operational planning. Locomotives from country A may not be allowed to operate on the network in country B because the operator of the network in country B cannot guarantee technical assistance to broken locomotives belonging to another operator. As a result, locomotives often stop at the border and hand over to another operator, leading to long interchange delays. An analysis on the North-South Corridor by Africa Infrastructure Country Diagnostic (AICD) in 2011 indicated that a rail journey of 3 000 km from Kolowezi (DRC, near the Zambian border) to Durban can take up to 38 days to complete, of which 29 days

are spent at the border due to delays – resulting in an effective speed of less than 4 km/h. Reducing border-related delays will have a huge impact on the viability of rail for regional traffic. Ports like Mombasa in Kenya and Dar es Salaam in Tanzania can only survive with the development of rail, and ports need rail to survive the current commodity crunch.

Ports like Mombasa and Dar es Salaam can only survive with the development of rail Existing rail networks in Africa are, generally, in fairly poor condition and require upgrades to infrastructure (both track and signalling), stations and rolling stock, as well as road and rail network extensions in order to adequately service passenger and freight demands.

Money matters The North-South Corridor provides two distinct road routes to Lusaka, Zambia, from South Africa. One goes through Zimbabwe; the other runs through Botswana. The Zimbabwe route is shorter by around 150 km, but is often slower, due to inefficiencies at the infamous Beitbridge border crossing, where delays with documentation frequently last two or more days. A major limiting factor for the corridor is that the sub-Saharan African region

is beset with notoriously high transport costs compared to other major regions in the world. Population density is relatively low, and a substantial fraction of people reside far from the coast. Oceannavigable rivers, which provide transport to the interior of most other regions, are virtually non-existent and road networks are, on the whole, sparse and poorly maintained. Despite this, 85% of Africa’s internal transportation is still undertaken by road. Around $7 billion is invested in road construction and maintenance in sub-Saharan Africa every year and, while it may sound substantial, China, by contrast, with less than half Africa’s land mass, allocates $45 billion annually to road works, much of it going to extensive highway systems. Given its dependence on road infrastructure, Africa remains poorly served. Good paved roads, over any reasonable distance, remain a scarcity, with additional vehicle maintenance being a costly necessity.

Western ways Because the currency used in Zimbabwe is US dollar-based, fuel costs are higher on this route. Bribery and corruption by customs authorities is also more prevalent. Zimbabwe is a more mountainous route than the Botswanan alternative, with heavy commercial vehicles under more mechanical strain, to the detriment of

Natural elements can create additional transport challenges

TWA | Jan/Feb 2016

corridors

travelling speed and fuel consumption. At around eight to ten hours, the South Africa/ Botswana Groblersbrug border post is quicker to process documentation than the Beitbridge alternative. Botswana's roads are flatter than Zimbabwe’s and its fuel is cheaper – even cheaper than South Africa’s – despite the fact that it imports all of its fuel from its southern neighbour. Delays almost always occur at Kazungula, leaving Botswana for Zambia, as there is no bridge and, so, road transporters have to wait for a ferry to get across. Transporters often choose to overnight in Lusaka once in Zambia and then drive around 1 000 km to Tunduma, the border separating Zambia and Tanzania. Paperwork in Tanzania is handled in Dar es Salaam and not at the border post, as the country uses a single, centralised point for documentation. Documents are then sent back down to the Tanzanian border, which takes additional time (frequently between four and seven days). Like Zimbabwe, corruption in Tanzania is commonplace, with drivers regularly involved. Identified by their number plates, South African vehicles are frequently targeted by criminals. The thinking goes that South African transport and logistics companies carry more money on-board than their SADC and East African counterparts. A considerable frustration for South African transport and logistics companies is that transported loads are only carried the one way, with empty trucks returning to South Africa. It is difficult to return with a full load as South Africa imports very little from East Africa – volumes that could be

sent by air freight. Special cross-border permits also have to be issued, which are only valid for a single country of origin and single country of destination.

Usual suspects The implementation of one-stop border posts (OSBPs) is an attempt to address crippling border congestion problems on the route. By allowing each of two existing border posts to deal with traffic flowing in one direction only, it is possible to eliminate the “no man’s land” between border posts. Unfortunately, the development of OSBPs is minimal on the continent, with only Chirundu and Uganda’s Busia, Mirama Hills and Mutukula entry points functioning examples. A lot of corruption occurs at border posts and, once congestion begins to be eliminated and the possibility of corruption reduced, objections begin to surface. Things don’t seem to be getting better in Zimbabwe, with the Zimbabwe Revenue Authority’s (Zimra) roll-out of customs updates last year deemed “an absolute shambles” by the South African Association of Freight Forwarders (Saaff). Zimra had to withdraw the updates and reintroduce them after a lot of work had been done, but not before several weeks of delays. The Zimra manually-operated release desk, as a whole, is still a major headache for Saaff and, while the Shipping

and Forwarding Agents’ Association of Zimbabwe has liaised closely with Zimra, it’s still seen as a hive of corruption. From the South African side, the main issue pertains to gate processes. There are two fairly separate processes, with the service managers system quite a lot older than the inter-front system. All too often, though, glitches occur, with the two systems failing to “speak” to each other. This may well have monetary implications for clearing and forwarding agents, once the new Customs Control Act is promulgated and rolled out. Practically speaking, the big issue facing the North-South Corridor is the cost of intra-African trade. The mooted Free Trade Agreement is an exciting development, even though much cynicism exists in business circles about it. While seemingly insignificant on the surface, the 66 km, four-lane Pedicle Road linking Zambia’s Luapula Province to the copper belt, through the DRC, will assist business in the region tremendously. In fact, economic benefit has already been seen, but, unless it becomes a functioning OSBP, and unless the Congolese and Zambians work together, time is still going to be wasted at the border.

Identified by their number plates, South African vehicles are frequently targeted by criminals

Modernisation drive When it comes to remedying border delays, priority needs to be given to the entire corridor, not to sections of it. Challenges are not just operational – too few performance monitoring tools are available as well. That being said, efforts are under way to address the continent’s border problems. The South African Revenue Service (SARS), for example, plays an important role in intra-African trade facilitation. In 2000, it started to aggressively pursue Electronic Data Interchange (EDI), which laid the foundation for its customs modernisation drive. “Border security became more important in the wake of 9/11,” explains Beyers Theron, executive: Customs Modernisation Strategy and Design, SARS. “During that time, we started to get automated risk engines; we started to work with other government agencies to exchange Centres such as this help prevent the spread of disease through the innoculation of drivers

TWA | Jan/Feb 2016

corridors

data, specifically with the South African Reserve Bank, the dti and ITAC. “SARS started to see itself less as a gateway to trade facilitation and more as a player in the supply chain and it followed a risk management approach. The current programme of modernisation looks at integrated risk – that is, not just the customs portfolio. “We started to implement a lot of automation in our systems. As a world first, we introduced a handheld inspection reporting tool, on which we can, from a border post, engage with a customs centre, follow instructions and perform decisionmaking tasks. We’ve become more flexible to how things work in the customs world. Automation has occurred and a lot of paper has been taken out of the declaration process. “If traders are compliant when reaching the border, we can process them within a few minutes. If we are transparent and our requirements predictable, then it is far easier for trade to move through a border post,” he says.

Disruptive innovation Dar es Salaam cargo volumes are growing at 10% per annum, with intra-regional trade growing quickly and, therefore, providing a wealth of opportunities for transport and logistics service providers. But, the cost of transporting inbound and outbound containers is still prohibitively high; it costs almost $5 000 to transport a single container from the Dar port to Rwanda, for example. A lot of work is being done on the northern corridor out of Mombasa in Kenya, with noteworthy investment received. Numerous donor projects have been completed and the private sector continues to get involved. “We need to think about intra-regional trade within the East African Community, which has some of the best dynamics on the continent in terms of the countries trading with each other,” says Isaac Njoroge, fund manager, Logistics Innovations for Trade (LIFT) Fund. “The LIFT Fund is looking for disruptive innovation – a solution that is based

in Africa for Africans, which no one has thought about. We are looking at things like freight exchanges, and the use of ICT that allows that to happen. We need to develop things like pallet networks to allow small players to distribute cargo in sizes that make sense to them. We should use ICT in vehicle management, where we try to get virtual networks of SMME hauliers and transporters to work together and look at the different models that emerge from that. “We could, at a higher level, look at paperless systems to handle road tax, insurance and certificates of roadworthiness, which could reduce burdens, increase transparency and lift revenue collections for authorities. We’ve been talking about electronic bills of lading for a long time, which haven’t changed much from the 18th century. Electronic container locks could also be used, and are controlled by mobile phones, which allows containers to be traced. These are the types of technology disruptions we need,” he concludes. TWA | Jan/Feb 2016

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rail freight

On the

line

Mbeya train station, Tanzania

Tristan Wiggill learns how Transnet’s corridor strategy forms part of a bigger drive to get rail-friendly cargo back on to the train tracks.

he North-South Corridor is a containerised freight corridor, managed through cooperation between railway operators and administrators in South Africa, Zimbabwe and Zambia. These include Transnet Freight Rail (TFR), Grindrod Rail and Zambian Railways, with a joint operating centre (JOC) based in Bulawayo. The corridor is served by more than 80 locomotives and several thousand railway wagons capable of accommodating a variety of cargo types, including bulk, break bulk or bagged dry freight, liquids and fuels, containers and high-value mineral products. The continuing regional economic growth and pipeline of mining and related investments in the copper belt, combined with the regional governments’ policies to shift freight from road back to rail, has encouraged the operating partners to undertake significant investments in both rolling stock and infrastructure. Grindrod’s Zimbabwean subsidiary, Beitbridge Bulawayo Railways (BBR), was formed in 1997 in partnership with National Railways of Zimbabwe to manage the railway concession between Beitbridge and Bulawayo. The concession completes a missing link between the South African border at Musina and Bulawayo on the NorthSouth Corridor and saves significant travel distance compared to the original route via Botswana. The concession runs until 2029. Grindrod Rail has invested in six new locomotives on the Zimbabwe line in the last two years, with the track rehabilitation programme contributing to the reliability of the service. Together, TFR and Grindrod secured the first container trains

TWA | Jan/Feb 2016

from Zambia to Durban in 2015 and have run 13 trains to date. A record delivery took just six days from Kitwe, Zambia, to Durban, with a northbound and round-trip container service from Zambia to Durban now possible. According to Grindrod, rail freight customers using the corridor have four basic requirements: price, reliability, predictability and security.

Visibility One problem faced by South African rail operator TFR relates to the visibility of trains and cargo. “We run trains in South Africa to our borders, but our customers don’t

“A record delivery took just six days from Kitwe to Durban.” know what is happening beyond that,” says Nyameka Madikizela, executive manager: International Business, TFR. “We try to see how we can improve that so our customers have the same visibility that they enjoy in South Africa.” While TFR is looking to sign agreements with various operators, its customers want to get one service: “The team on the NorthSouth Corridor has been interesting in terms of the dynamics. The go-getters want to see change. The growth that we have experienced on the corridor is phenomenal. The Bulawayo facility is running, but there are a few things that we need to get right,” she concedes. The current framework looks at how TFR can make the necessary investments to

achieve the growth in the volumes that it anticipates. “The SADC region focused, for whatever reason, on road transport and then realised that it needed to relook at the strategy for road transport, after a lot of taxpayer money was spent,” she says. TFR moves less than 5% of the total 24 million tonnes of annual cargo in the region on rail, but has plans to change that. “We have a dynamic road-to-rail strategy that is being developed. TFR has looked at how it can operate with partners so that the planning and execution are done together through the JOC. We look at other strategic projects, like the Masterplan and the capital investment plan, because rail revival requires that everyone works together.” Private sector funding is required as the cross-border running of trains requires modern technology such as track-warrant systems and on-board computers.

The sky’s the limit In aviation, there are standard operating procedures and an operating philosophy that everyone understands, no matter the country. TFR and its partners are trying to achieve a similar operating philosophy and standardisation on the corridor, in a region where French, Portuguese and English are all native. Simply running trains, however, is not enough, with rolling stock depreciating quickly in the absence of network maintenance. “In Africa, we have a bad philosophy where we take colonised infrastructure, do nothing about it and then hope that it’s going to be okay for the next 100 years. We need to have a maintenance philosophy that talks to how we can sustain the

rail freight infrastructure we have. We are fortunate in that, when we got freedom (South Africa and Zimbabwe), we had the infrastructure; all we needed to do was to take it from there. Africa is the next attraction in terms of investments, but we need to organise ourselves better,” Madikizela laments.

Timing is everything Critical to the success of the corridor is the amount of time taken to deliver cargo from origin to port. “We had to agree with our partners on how long it would take to move a train from Zambia to Durban. We started with 28 days, but we’ve done it in 6. We are targeting between 8 and 10 days. As a result of that performance, we’ve received a lot of enquiries from shipping lines interested in moving cargo. Rail transport isn’t plagued by the same customs issues road transport is, because stakeholders work together to plan and execute the service together.” TFR’s Masterplan began in 2014 and, with the help of Nepad, much has been achieved. The plan is about moving and scoping the service from South Africa, largely to the ports of Durban, Richard’s Bay

and up to Zambia, including Zimbabwe, and all the way to Kolwezi in the DRC. TFR has identified areas and lines that are important. Some of the lines need to be studied to understand how they work, particularly in terms of the copper belt. Other branch lines have also been looked at. “We’ve scoped it as dry bulk, break bulk and liquid bulk. We’ve looked at several parts of it, as it’s not just about rail – it’s about the supply chain. The supply chain is pit to port and includes partnerships with road hauliers. We collaborate with road hauliers because the intermodal strategy is key, especially in the region, as we don’t have rail sidings. There aren’t as many lines as in South Africa either, so TFR has to consolidate for the trains to turn around quickly.” While TFR has invested in rolling stock, locomotives and wagons, many redundant wagons and locomotives are being deployed into the region. The key things are consolidation and channelling trains on a regular basis. Track inspection has been done, although work still has to be done on the BBR line

from Beitbridge to Vic Falls. In some parts of South Africa, trains can reach 80 km/h, but, in others areas, can fall to below 40 km/h. “We are trying to achieve 40 km/h in the entire region so that we can reduce turnaround time. There is a need to replace some sleepers as some of the partners have expressed environmental concerns,” she says.

Taking stock “When running trains in the region, you have to return to the basics; you have to run trains on a spreadsheet and make sure someone knows when they will arrive and return. “Phase 2 is about restoration, where the partners look at signalling and at tracking wagons before doing what is done overseas. The third phase requires more money, as TFR intends to grow its rail freight volumes sustainably. While rolling stock is to be refurbished and new stock bought, the key thing for the business to grow is to make the cash flow work. “Freight demand analysis is being undertaken and we know there are 24 million tonnes out there,” she concludes. TWA | Jan/Feb 2016

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ports

Chain reaction Durban port efficiency could be improved through telematics

Innovative technology is needed to help realise port efficiency in Durban, for the benefit of all in the logistics chain, reports Transport World Africa.

f the port of Durban were able to offer potential shipping lines, or other clients looking to use the port, some unbiased performance statistics – from both the water- and land-based sides – it would become a world leader. Harbour Carriers stalwart Kevin Martin suggests that a telematics system be developed to not only look inwards – that is, to what a driver is doing and the manner of diesel consumption – but outwards, to the macro operating environment. “We need measurements in key points – perhaps using satellite tracking – that are independent and immutable. We would all benefit from satellite tracking that monitors our operating environments and publishes that information publicly. We could then list the best and worst performers at a terminal on a month-by-month or week-by-week basis,” he says. “It would be of great benefit if we could list the best depots and warehouses. Once that information is freely available, cargo owners could make a choice, based on unbiased information. In this way, we would start to solve problems in the logistics chain, because we’d be holding everyone accountable to their performance. It is not only Transnet that delays the transporters, but also the

TWA | Jan/Feb 2016

warehouses, depots, clients, and clearing and forwarding agents. Lots of people add to the inefficiencies of a logistics chain and, so, we should not only hold Transnet to account,” he says.

Results driven “There has been a lot of work done on the terminals in the port,” says Rosario Sarno, managing director, Mediterranean Shipping Company (MSC). “However, issues still remain, most of which relate to issues caused by the draft. When dredging is being done, Transnet Port Terminals has to close some berths. This

“We need independent and immutable telematics measurements in key points.” has created problems for us in the last three months.” Sarno says the Durban port’s draft is simply not adequate. “It is the shallowest of the eight commercial ports in the country. It’s quite extraordinary if you consider that Durban is the biggest and busiest port in South Africa and the most important to the country.” Although the port’s mouth has been widened, he says the entrance to the terminals is a problem. Trucks also queue

up outside the entrance to the port. “I feel for the road transport industry, because drivers get paid by the trip. Overall port productivity has improved, but it is not at the levels we desire. I believe more cranes need to be working the ships. Again, work is being done to address this and, compared with two years ago, the situation is much, much better. However, moving 150 boxes inside three days is a big challenge,” he says. Martin believes that land usage should become a criterion in the measurement of port efficiency. “Ten years ago, we were doing eight loads in a shift; today, we are doing one-and-a-half, maybe two, loads per shift. We spend billions of rands upgrading the port and we’ve gone from 1 500 gate moves a day at Pier 2 in Durban to 3 000 gate moves. But, in terms of road transport efficiency, we’ve gone back by about 75%. “If you consider the Port Regulator’s Report and compare land usage between ourselves and the port in Shanghai, we’ve got 180 hectares and they’ve got 302 hectares. “If we were to consider that proportionally, we would be capable of doing 17.7 million containers per annum, not 2.6 million and then tell everyone we’ve got no space. Investments aside, we need to find better ways of using the space we have,” he says.

ports

Slow and steady

Sea freighting non-time-sensitive goods to East Africa is the most cost-effective option available to South African cargo owners, writes Tristan Wiggill.

ike the Mediterranean Shipping Company (MSC), Danish shipping major Maersk Line transports cargo from the Durban port to the Dar es Salaam port on a weekly basis, with trips usually taking around 30 to 31 days to complete. Using modest, 1 800 TEU vessels, the spot cargo it ships north frequently includes construction materials, food aid and project cargo related to infrastructure developments. “Poor weather conditions can be a challenge along the route, and have the ability to impact port operations,” says Matthew Conroy, trade manager, Maersk Line Southern Africa. “It is, therefore, important that seafarers plan the best route and prepare for any conditions that are likely to be experienced en route and at the destination port,” he adds. “The container terminal in Dar es Salaam delivers around 30 berth moves an hour, which is much improved from the average hourly moves achieved in 2014. The port of Mombasa in neighbouring Kenya, meanwhile, delivers around 24 berth moves per hour. Smaller East African ports deliver substantially lower productivities than this,” he explains. Maersk Line does not provide a return leg to Durban on this sea route, instead offering transshipment services from the Middle East.

Port problems The Dar es Salaam port will soon be under threat from two new ports that are being built in close proximity. Bagamoyo, just 75 km up the Tanzanian coast will, once completed, be the largest port in East Africa, boasting double Dar’s con-

“Dar es Salaam is a leader in container handling productivity in sub-Saharan Africa.” tainer capacity. Kenya’s Lamu port, meanwhile, which forms part of the Lapsset Corridor Programme, will soon also become a transhipment hub for East and Southern Africa. As it is, the port in Dar es Salaam is hamstrung by its real-estate limitations; by global standards, the port is incredibly small. Two berths (13 and 14) have recently been added, but the port is still under considerable pressure to ease vessel congestion. A major limiting factor is that the port itself is not expandable and, so, important commodities like grain silos cannot be situated in the port area. In addition to Bagamoyo, large investments at the Djibouti port further north mean it is quickly becoming a transshipment hub for East Africa and the Middle East, and a gateway point to

the forthcoming transcontinental road to Dakar. Djibouti, with controlled access to the Red Sea and Indian Ocean, is already benefiting from the “new” Suez Canal, widened last year to accommodate two-way vessel traffic. Djibouti is also a cable landing point for Seacom, whose undersea cables enable Internet access on the continent. According to PWC’s ‘Africa Gearing Up’ report, Dar es Salaam’s performance indicators compare well to those of other Eastern and Southern African ports. It cites low container dwell time, low truckprocessing time, and high crane productivity. The report goes on to say that Dar es Salaam is a leader in sub-Saharan Africa in container handling productivity and ranks among the top in general cargo handling. However, the European Union (EU) reports that shipping costs at Dar es Salaam are among the highest in the world. Currently, the cost of using the port is 24% higher than other port facilities in subSaharan Africa, as it suffers from significant capacity constraints – caused by high traffic growth and poor backward linkages with inland transport networks – and congestion. Its demand-to-capacity ratio is the highest in Africa after Mombasa. Adding to the pressure, Dar es Salaam also accommodates transshipments that Mombasa cannot handle due to its own severe capacity constraints and operational inefficiencies. TWA | Jan/Feb 2016

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Meat and drink

Imperial has helped deliver water and animal feed to drought-stricken communities across South Africa.

upply chain and logistics leader Imperial Logistics has responded to South Africa’s worst drought in decades by putting its transport and distribution muscle into a drive to deliver water and animal feed to the country’s most desperate communities. To date, the organisation has transported around 350 000 litres of water to the drought-stricken towns of Senekal and Olifantshoek in the Northern Cape, and Verkeerdevlei in the Free State, while three loads of animal feed brought relief to farmers and their livestock in Ficksburg and around Bloemfontein. Working with the not-for-profit organisation, Water

TWA | Jan/Feb 2016

Shortage South Africa, Imperial group companies KWS Carriers and Tanker Services delivered water in food-grade tankers, as well as loads of bottled water. “The tankers were filled with water at Imperial’s Germiston wash-bay and then our eagerly awaited cargo was dispatched to the Free State, where it was dropped off at informal settlements, local churches, and primary and secondary schools,” reveals Cobus Rossouw, chief business development officer, Imperial Logistics. For farmers in Ficksburg and around Bloemfontein, drought relief from Imperial came in the form of loads of animal feed. This was delivered by Imperial Cargo, working with Freshgold SA. In another initiative, Imperial joined forces with radio station Jacaranda FM, to take water to drought-ravaged

areas in the North West province. Fifteen superlink trucks were pledged to the #Projectwaterdrop cause, to travel in convoy to the region, Rossouw reports. “We will continue to do whatever we can to help those hit hardest by the drought. Imperial’s group companies and our employees have committed themselves wholeheartedly to numerous drought relief initiatives – from deliveries of hundreds of thousands of litres in our tankers, to bottled water collection projects at our offices. Plans are also underway to deliver another 350 000 litres of water to the Free State over the next couple of weeks,” Rossouw concludes.

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ports

Harbouring data a bad idea Tristan Wiggill learns that port operators must identify and evaluate smarter solutions to improve their efficiencies and reduce waiting times.

s African imports and exports increase, so too do the demands for capacity and efficiency. “A new kind of IT is needed,” says Bridget Kelly, senior sales manager: TLL Division, T-Systems. “The culture of innovation today is going to require something different. It’s going to require that companies collaborate. It’s going to require that companies share data. It’s going to require more of what we see in social networking. It’s going to require innovation that breaks down the barriers between large companies. Hogging data does nothing for anybody. Sharing data bridges the gaps of growth and progress,” she says. Kelly believes a collaborative model is needed. “Individuals need to cooperate in an environment that benefits all the players. These models require participation. A true network model is needed in a network economy. Simply put: the more players that participate, the better. It is all about inclusivity, not exclusivity.” Ports are big business and are of national strategic importance. But, they have to compete with other ports in South Africa, as well as those in SADC. Increasing the level of port efficiency is, therefore, important. “In Africa, we need to lift our performance stats, our productivity and the way we compete because, currently, we are not able to compete with global players. We have to raise the efficiency of our port operations.”

It is a known fact that port operators spend a large amount of time waiting – be it outside the port, within the port or when leaving the port. This leads to significant congestion, which negatively impacts the port city, its residents and people trying to do business. Lack of visibility means it’s almost impossible for operators to increase their efficiency, due to their dependence on external variables. “Being unable to access data means one cannot improve one’s service,” continues Kelly. “It is not only internal processes that deter-

“Hogging data does nothing for anybody.” mine how good you are – you have to work with external processes in order to improve.” This can be done using a single platform, into which parties feed their data through various applications. In this way, shipping agents, for example, are able to turn around their customer requests faster and more effectively, and increase the productivity of their businesses. At the moment, trucks arrive at ports and then wait for days until they can be accommodated, often because relevant data has not been available to everybody. One of the biggest benefits of port IT visibility is felt within trucking operations, achieved by providing freight operators with better and more regular

information. This leads to a better allocation and use of expensive assets. Versatile platforms are able to collect machine-to-machine statistics and provide high-level analytics. For example, temperatures within temperature-sensitive cargo can be monitored through applications, which then communicate with a central platform. Geo-fencing is used to provide specific information to any users in a specific location. It is a demarcated wireless area that is receptive to IP devices that can supply information to an operator in control of that area. Broadcast notifications could be given to warn of delays, with operators able to take appropriate action. “At a macro level, the data could be aggregated and then used to establish the efficacy or efficiency of one port compared to another, allowing comparative analysis to be done. Manufacturers can decide which port to use based on port efficiency. This is often the case when determining the location of vehicle manufacturing plants,” Kelly says. Terminal operators are heavily dependent on data received from a range of sources. “A single platform can disseminate data from multiple sources, creating an integrated platform for all stakeholders, from the port authority to trucking companies. Better IT can make them more effective and allows a port authority to measure them against service level agreements,” she concludes. TWA | Jan/Feb 2016

freight forwarding

Heading East E

Two new ports in Tanzania and Kenya will shift the balance of trade in Africa away from South Africa, says Tristan Wiggill.

ast Africa is an import destination, with Kenya and Tanzania both being gateways into the East African Community (EAC). Huge infrastructure developments are currently under way, with both countries preparing new ports to meet rising trade volumes. There are several mines to the west of Tanzania and much economic activity surrounds these areas. Kenya is receiving significant funding for infrastructure projects and while terrorism is an ongoing threat, it is not slowing investment.

are both hampered by congestion caused by their capacity constraints. With effective clearing agents, each is able to function at an acceptable level. Delays are not so bad as to be limiting and each is well-equipped in terms of operational infrastructure,” he says. Landlocked Uganda plays a critically important role in the EAC region, acting as a gateway into the DRC. “In the past, there was only one route into the DRC for traders but, today, there are several options,” Pietersen notes.

Vibrant

Rough diamond

“Nairobi is vibrant,” says Basil Pietersen, owner, Multimodal Logistics Solutions. “The freight forwarding industry in the region is well supported by the government and both the industry and country understand their respective roles in trade facilitation. Customs and duties organisations are also supported and enjoy a good relationship with the Minister of Finance and other key trade facilitators.” Many restrictions on freight forwarders have also been removed. “Four or five years ago, freight forwarding was a governmental thing, it was not a private-sector function,” Pietersen explains. “The existing ports in Dar es Salaam and Mombasa are fairly efficient, if not world leading, but

According to Pietersen, the real gem in East Africa is Ethiopia, which, he says, is booming at the moment. It is a view shared by the World Bank. “If you’re lucky enough to visit Addis Ababa, you’ll see that it is essentially one enormous crane-site. A number of UN agencies have moved in and Chinese organisations are rapidly constructing new roads and bridges. The mining industry is really taking off and there is a huge drive to generate power. Ethiopia is a populous country, home to over 90 million people. There are opportunities for South African companies to export mining equipment and related supplies.” The “new” Suez Canal now accommodates two-way traffic, which is of

TWA | Jan/Feb 2016

major benefit to countries like Ethiopia and Djibouti. Freight forwarders would likely decide to move goods to Ethiopia from South Africa by seagoing vessel as it is easy and convenient. Landlocked countries, like Zambia, usually opt, instead, for road transport to deliver goods to East African countries like Kenya, Tanzania or Ethiopia. Transporting cargo 1 777 nautical miles from Durban to Dar es Salaam is cheaper by sea. That being the case, choosing a transport mode depends on the load transported, the size of the cargo owner’s budget and the time sensitivities involved. By ship, goods exported from Durban could reasonably take around 30 days in sailing time to arrive, not including delays at the port. A truck should take anything from 8 to 14 days, depending on border delays. While the perception persists that the East Coast of Africa is under siege from Somali pirates, this is no longer a true reflection of the situation. Piracy still exists in the region, but it is less of an issue than was once the case. Acts of piracy have, to an extent, migrated across the continent to the West Coast of Africa, where armed pirates from the Delta region occasionally interfere with cargo vessels.

Coast to coast Mark Thompson, regional director: Gauteng, SDV South Africa, says

widespread coverage of the continent is key for logistics companies. “We have an office in every country in Africa except Somalia, where we are represented by a freight forwarding agent. We serve all corridors in Africa, which we call clusters, and deal with all modes of transport,” he says. Much of the road transport that SDV facilitates pertains to abnormal loads and mining projects. Its warehouses are all bonded and it can provide a door-to-door facilitation process. “We provide a financial haven so customers don’t have to pay immediately.” With border delays being the single biggest challenge, the company tries to speed up the process through representation at each border crossing. Ultimately though, Africa’s borders are controlled by various customs authorities, with the one-stop border post (OSBP) concept, a la Chirundu, not yet implemented throughout the continent. The Beitbridge border post between South Africa and Zimbabwe is often cited as the worst border post of all on the North-South Corridor due to traffic volumes and the frequency of ensuing delays. “While it can be slow, especially during the peak travel periods, we have noticed a year-onyear improvement. This can be attributed, in part, to the electronic data interchange (EDI) that SARS is involved with,” Thompson remarks. Rail freight services on the North-South Corridor are a form of optimisation for commodities, with the licensing of control to Grindrod presenting a fantastic opportunity for companies like SDV. “We have a rail siding in Chingali to facilitate bulk moves and we provide warehouse supplychain capability into the DRC. Thompson says another challenging border post is the one into the DRC, as there is no singlewindow concept employed. While SARS is busy with a number of trade facilitation efforts in the region, all agreements have to be aligned, with this process of harmonisation taking considerable time. “We are in a position to consolidate right through to removal in transit and removal in bond,” he adds.

“Acts of piracy have, to an extent, migrated across the continent.”

Status update With current infrastructure developments in Tanzania and Kenya under way, South Africa’s gateway status into the continent is becoming ever more threatened. The much spoken-about dugout port in Durban, at the site of the old Durban International Airport, is an ace up the country’s sleeve. But, a recent announcement by Transnet National Ports Authority (TNPA) suggests that its development is to be delayed, not fast-tracked. TNPA is of the view that South African ports currently offer enough capacity. While this may be so, South Africa faces strengthening competition and would do well to look further than its own coastline when considering threats to its status in African trade. TWA | Jan/Feb 2016

air freight

here is simply no faster way to import South African goods into East African destinations like Dar es Salaam than by aeroplane, and this is becoming the preferred method of South African retailers operating abroad. There was a time when South African Airways (SAA) flew dedicated cargo planes into East Africa – i.e. to Dar es Salaam – but it decided to terminate this service several years ago due to insufficient demand. You would need to fill a plane with 80% of passengers or 80% with cargo, most of the time, for it to become a viable route. Currently, passenger flights are being used to carry cargo in the bellies of these aeroplanes, via O.R. Tambo in Johannesburg. Rwandair flies to Dar es Salaam via Kigali and Kilimanjaro, while struggling Kenya Airways flies to Kilimanjaro. Ethiopian Airlines has just recommenced thrice weekly flights directly to King Shaka International Airport from Addis Ababa and is making use of the Dube Tradeport. One might assume that only perishable/ time-sensitive goods are being air freighted from South Africa to East Africa, due

to the costs involved, but the reality is that various types of freight are being flown. Machinery, foodstuffs, car spares, clothing and some pharmaceutical products are flown from South Africa to Dar es Salaam. In recent times, the clothing industry has seen increased export volumes to East African destinations as South African companies Mr Price and Woolworths’ retail stores gan traction in places like Uganda. Zanzibar remains a popular tourist destination for South Africans, with the hotel industry requiring catering equipment from South African suppliers. Mango Airlines flies directly to touristy Zanzibar, as does fastjet, albeit with a 30-minute stopover in Dar es Salaam on the way. SAA flies twice daily to East Africa, while Kenya Airways, Fastjet and Rwandair fly once daily from South Africa. Imports from East Africa are infrequent, but may comprise limited quantities of fresh produce from time to time. “A major problem for airlines on this route is the abundance of spare capacity, especially on the return leg to South Africa,” explains Vincent Banda, CEO of BidAir Cargo. “This situation renders the use of dedicated freighter aircraft

Freight

without delay Large South African retailers in East Africa are looking to the air freight industry for a rapid transport solution, writes Tristan Wiggill.

TWA | Jan/Feb 2016

air freight

unnecessary, which is exactly what is required to develop the South Africa-East Africa air freight industry.” The general state of the world economy means that fewer people are traveling and, so, passenger numbers in aircraft continue to decrease. There are also many interruptions in aviation services in Africa, and duties and clearance procedures are both costly (as much as $1 000 can be imposed on cargo owners for a single item weighing a few kilograms) and, by global standards, is quite inefficient. Richard Bodin, chief commercial officer, Fastjet, whose commercial planes take off in Johannesburg and land in Tanzania daily, says passenger traffic on the route is increasing. There has also been an upturn in freight volume, although not in the traditional bulk freight sense. “We designed a product for informal traders, not the traditional freight customer, to get their goods to wholesale markets from Harare. By decoupling ticket prices, we allow traders to carry 80 kg of goods at a cost of $18. This has proven to be popular as the journey from Harare to Dar es Salaam by bus can take three-and-a-half days, if you’re lucky, and does not take into account border delays.” The Johannesburg-Tanzania route is used to freight mining machinery, equipment and supplies, and small quantities of fresh produce and flowers as well as goods that are not readily available in Tanzania. Low-cost pan-African carriers, like Fastjet, are not as heavily impacted by the economic downturn as normal carriers, who are forced to reduce their ticket prices in an attempt to stop the bleeding. Bodin says the pan-African carrier is pushing against numerous barriers in its quest to link more countries on the continent. It has set up new bases in Zimbabwe and Zambia and is getting the necessary aircraft in place. “There is a lot of bureaucracy and protectionism in the aviation industry in Africa and authorities deny granting permission

to operate, even to those airlines that meet all regulatory and safety requirements. We want to democratise air travel and show how Tanzania has benefited by opening its doors to trade. Private companies are expressing more interest in the services we offer and there is a growing recognition that intra-regional trade in Africa is a fundamental requirement.”

Freshly grounded

exported. It’s really there to provide a growing platform for people that cut flowers, berries and herbs and other lowweight, high-value products that have limited shelf lives and need to be transported quickly to preserve shelf life and quality. As an exporter, transport cost is reduced because it is possible to harvest in the

“Dedicated freighters are required to develop the South Africa-East Africa air freight industry.”

Over the next five years, Dube Tradeport will focus its attentions on covering sub-Saharan Africa. The facility currently offers flights to Harare and Lusaka, but wishes to expand this. It offers alternatives to South African companies active in the rest of Africa. With so many of the countries in the region landlocked, moving goods by road means border post delays and deteriorating road infrastructure, which adds to supply chain costs. Dube Tradeport is a place to generate, process and transport cargo and give access to international markets. Many of the major freight forwarders in Durban who are involved in the air freight business are housed at Dube Tradeport, including the likes of Kuhne Nagel, and Bidvest Panalpina, among others. A bridge has been incorporated to deal with high volumes of cargo and there is a drive to get as many companies as possible to be located there. The intention is to look at high-value, low-weight products as it’s different to the port environment where bulky goods like sugar and citrus are imported and

morning and get the products onto an Emirates flight that leaves in the afternoon, meaning shelf life is extended and the cold chain is unbroken. There is a lot of value-adding involved in that centre. The cargo terminal has four aircraft stands; there’s a freighter that’s based there that just carries cargo. Dube Tradeport is working hard to attract dedicated cargo carriers. The idea of the tradeport is to offer a platform to companies that are involved in processing, value-adding and distribution of products. Agricultural goods are received from all over the province and beyond. The tradeport is involved in staging where certain products, like bananas, are kept and ripened in its facilities. In so doing, it ensures rapid response to the market.

TWA | Jan/Feb 2016

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warehousing

Prime position

Cargo owners using the Durban port can score big if they choose their warehousing partner wisely, discovers Transport World Africa.

here are numerous advantages to using a customs-controlled or bonded warehouse in the Durban port, as goods can be cleared at the warehouse directly, which speeds up the import/export process. Bonded facilities are also more cost-effective. As a short- to medium-term solution, current legislation in South Africa dictates that goods remain in bonded warehouses for no longer than two years. Greystone Enterprises operates a storage facility inside the Durban port and has five others spread throughout the country. “Our export business has been quiet for the last nine to ten months, due to depressed commodity prices and lower demand, especially of steel from our largest export destination, China,” indicates warehouse manager Jeff Stone. “Import volumes have also been lower than usual, although the demand has been more constant,” he says. His company primarily imports animal feed, which it supplies to pet food companies like Epol. Stone’s Durban facility, like those of his competitors’, operates 24/7, which creates as much additional work as additional labour costs. Warehouses in the Durban port are given just three days to collect and stack their cargo. Failure to do so results in fines, demurrage fees or the short-shipping of loads. As frequently reported, congestion is a significant

problem in the port of Durban, and is particularly evident on the access road leading into the port. As is the case in the ports of Port Elizabeth and Ngqura, high winds cause regular disruptions. Wind speeds over 80 km/h stop the multimillion-rand ZPMC cranes from working. When this happens, Transnet Port Terminals (TPT) has to make allowances and adjust ship loading dates. Despite the congestion in the port, it is still advantageous to have a warehouse inside the port, due to the proximity to the action. Being so close means a reduced need for transportation; the most costly leg in any logistics operation. “Most clients are cargo owners, manufacturers and producers but, as a warehouse and storage facility, we also interact with freight forwarders and freight brokers,” clarifies Stone. Given the proximity advantages, there is tremendous competition in the port in terms of warehousing space. Companies with the lowest overhead costs frequently emerge as preferred partners, simply due to their ability to lower storage costs, which is the leading consideration for most cargo owners. Although South Africa’s port efficiency is in line with African ports on average, it is far below other main ports around the world, with the Durban port performing poorly in several categories. The

The port authority is freeing up space by using pyramid-style container stacking

average turnaround time per TEU handled in Durban is 1.7 days per 1 000 TEUs, which is three times higher than large ports such as Long Beach, Hong Kong SAR, New York and Antwerp. Crane performance has remained relatively constant at around 20 moves per hour per crane, which is well below international standards of 35 to 40 moves per crane per hour. Truck turnaround time is targeted to be around 35 minutes, while evidence underlines that it is usually above 60 minutes at the Durban Container Terminal. In addition, because very few of the containers moving through Durban are transported by train (around 15%), it causes substantial congestion around the port area. This is amplified by constraints on land availability for container stacking, congestion at the port gate and terminal inefficiencies that have led to increased ship waiting times. According to the World Bank’s ‘Supporting Export Competitiveness through Port and Rail Network Reforms’ policy research working paper, the solution to the congestion does not rely solely with the ports authorities. Practices of the private sector, including lack of coordination and inefficient dispatch practices, contribute to congestion in and around the port. TWA | Jan/Feb 2016

“Ensuring Supply Chain Integrity by Collaboration, Innovation and Standardization”

Join the Premier Meeting Place for Supply Chain Leaders in Africa... In today’s ever more connected and demanding world, your operations have to be not only watertight and responsive, but able to adapt to increasing complexity and future challenges. How can you ensure you stay ahead of the game? Taking place on Thursday 3rd and Friday 4th March 2016 in Midrand, Johannesburg, the annual Afri-Logistics & Supply Chain Convention provides breakthrough content from the Africa’s leading supply chain practitioners. The Afri-Logistics & Supply Chain Convention will present an expert line-up of senior practitioners hand picked based on their first-hand experience of the key topics important to you.

Local & International Expert Speakers

Honourable Lydia S Chikunga Deputy Minister of Transport Department of Transport, South Africa

Mmadiboka Chokoe Executive Manager of Enterprise and Supplier Development (ESD Transnet SOC Ltd, South Africa

Dawid Janse van Rensburg Managing Director CargoSolutions A Division of Cargo Carriers Ltd South Africa

Joe Couto Senior Vice President and General Manager HighJump Inc (Accellos), North America

Lebogang Letsoalo Vice President Supply Chain Management Sasol South Africa

André Coetzee Managing Director CIPS Africa South Africa

Advocate Helen Venter Director Brasika Consulting South Africa

David King Senior Supply Chain Analyst Gain Group South Africa

Shermandra Singh Business Development Director Dovetail Business Solutions South Africa

Henry Varges EMEA SCM Solution Hub Manager Africa Presales Manager | Cloud and Line of Business Applications SAP, South Africa

Johny M Smith Chief Executive Officer Walvis Bay Corridor Group Namibia

Lillian Karuri-Magero Head of Sourcing for Corporate & Investment Bank Barclays South Africa

Jabulile Buthelezi Public Relations & Communications Specialist, Professional Writer, Afri-Logistics Convention Chair JB Comms, South Africa

Mike Johnston Founding Member of the Southern African Roundtable of the Council of Supply Chain Management Professionals (CSCMP

Dr Ernest Kadembo Senior Lecturer - Department of Strategy and Marketing University of Huddersfield United Kingdom

The next two days are for you to immerse yourself in actionable ideas that will advance your supply chain knowledge and strategy. The convention will allow you to explore topics in procurement, S&OP, distribution, logistics, operations management, risk management, strategy and collaboration. Meet and Network with Southern Africa’s Leading • Chiefs, Heads VP’s and Regional Supply Chain Officers • Supply Chain Strategy and Innovation Executives • Port authorities, Infrastructure Development Executives • Demand and Supply Planning Executives • Sales and Operations Planning Executives • Sourcing and Procurement Executives • SME’s, SMME’s and Enterprise Development Executives • Distribution and Logistics Executives • Freight Shipping and Forwarding Executives • Supply Chain IT Executives • Inventory and Warehouse Management Executives

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supply chain logistics

Experts to flock together The annual Afri-Logistics & Supply Chain Convention 2016 is coming to Johannesburg in March this year.

rganisers

say it is the largest conference of its kind on the continent and will include speakers of the highest calibre. They include Shermandra Singh, business development director, Dovetail Business Solutions, and Joe Couto, senior vice-president and general manager: Accellos, HighJump.

Taking place over two days, delegates will have the opportunity to exchange ideas in the hope that this will enhance or even revolutionise the transport/logistics industry. This is according to Freeman Mpofu, head: business development and commercial partnerships, Informa Business Conferences.

Couto has been instrumental in the development, deployment, marketing and sales of advanced information systems for the third-party logistics (3PL) industry. He is the strategic advisor for the company’s global 3PL product, which is used by over 100 3PL providers at over 500 facilities in 12 countries. Singh has a background that encompasses IT and e-commerce. He has, this year, been appointed vice-chairperson of the Faculty of Supply Chain Management at the Tshwane University of Technology. The logistics conference is a pan-African platform that brings together leaders of supply chain operations and logistics management professionals, as well as ministers of transport – in a bid to maximise productivity, streamline efficiency and gain a competitive edge in the sector.

High-flying software solutions Dovetail Business Solutions is a Southern African software provider for transportation, courier, distribution and warehouse management companies, and was recognised as a Top 100 Technology Company by the Department of Science and Technology in 2015. The software it provides focuses on streamlining and increasing productivity, while reducing operational costs in the logistics and warehouse management sectors. The company either provides customisable software solutions or ones that can be integrated with existing internal and endclient systems. Established in 1994, the company claims to have a client base of over 10 000 users who reportedly use

its products daily. Its software solutions enable companies to boost productivity, reduce costs, increase productivity and maximise operational efficiencies. Dovetail’s mantra, “Get it right, first time”, is impressed upon staff members who, by focusing on business first and technology second, have an in-depth knowledge of each sector they supply. The company’s staff are equally proud of the business’s 22-year track record in implementing transport and warehouse-optimising software. Best of breed software solutions and mutually exclusive B2B opportunities have been a key factor in its success. While the company’s primary target market has historically been Southern Africa, it has also started expansion into East Africa. Apart from supplying its own software solutions, the company sells and supports other industry-leading software applications – such as the 3PL WMS solution, Accellos – to provide a comprehensive compliment of logistics software to the industry as a whole.

This is one of the largest conferences of its kind on the continent

TWA | Jan/Feb 2016

Materials Handling

Stacking up More than the sum of their parts, Transport World Africa considers the value of pallets in the supply chain.

hile major retail groups like Spar and Pick ‘n Pay are arguably the biggest users of pallets in South Africa, there are also a number of smaller companies that rent pallets to serve the transport and storage contracts they have secured. This means that both new and used pallets are sold and rented, with the overwhelming majority being made from wood. Wood pallets are typically assembled from pine because it is a strong, weather resistant material that can be easily sourced. “The bigger factories tend to throw pallets away, without paying much attention to recycling,” says Juanita Schultz, manager, Quality Pallets. “There are numerous companies that drive around collecting these discarded units and refurbishing them, where necessary. “Refurbished pallets are more popular than new ones as they are a more costeffective freight carrying solution. These are also favoured by cross-border operators, but seldom come back from their journeys into the continent,” she says. More expensive plastic pallets are not nearly as popular, but are used by a number of industries, such as farming and those related to transporting or storing fresh produce and/or meat. “Plastic pallets are scarcer because people tend to recycle the plastic to make other items rather than make more pallets. Wooden pallets are generally easier to access and easier to pick up and carry. Some have four sides for ultimate user-friendliness,” she explains.

TWA | Jan/Feb 2016

Steel pallets are extremely rare and are used in the largest of factories. They are used in special orders and where the weight to be carried is significant (five tonnes or more). “Euro or CEN pallets used to be very popular in South Africa and were once readily supplied from Europe and Brazil. However, shipping these pallets back and forth across the world was not costeffective and so their use has dropped off significantly,” she tells us. While pallet sizes vary, the most popular size is still the 1 m x 1.2 m fourway pallet. Since these are open on all four sides, they are easy to pick and transport with a forklift. These pallets can be used in any industry, while their twoway counterparts are used primarily in the cement, tile and brick industries because their design is structurally stronger and more suited to the task.

If treated properly, pallets can last for decades, but this is seldom the case. One reason for this is that forklift drivers have little care or sympathy for the pallets they pick up. They are not seen as valuable business assets and are frequently thrown around and dropped along the supply chain. South African exports have slowed dramatically over the last few years, he says, and the pallet industry, as a whole, is becoming more regulated. “In 2001, there was a global organisation that checked for pests in the timber that was used to make wooden pallets. That organisation’s influence dropped off for several years and, as a result, insects were getting into the timber and were then being exported around the world. At the same time, the quality of timber used changed.” Recently, however, the Department of Agriculture has become more involved, with the industry now having to use heattreated timber. Sawmills are being made to cut wood that has no fault lines and, so, standards in the industry are being raised, making it more difficult for fly-by-night operations to compete.

“If treated properly, pallets can last for decades, but this is seldom the case.”

Night flying There are many fly-by-night companies in the pallet industry,” says Richard Behm, operations manager, Palbin. “These businesses come and go frequently, as they provide pallets at unsustainable cost.”

Materials Handling

Reading between the lines Despite the presence of more sophisticated technologies, barcoding use is still widespread in the industrial, retail and warehousing space in South Africa. By Tristan Wiggill

arcoding is still perceived to be an effective means of providing track and trace capabilities, while eliminating human error in product identification and labelling,” says Sheldon Vermaak, solutions specialist, Cradle Technologies. Yet, while the barcoding ecosystem and technology that enables its use in the country is long-established, there are still a number of, especially medium-sized, businesses that have not yet adopted this simplistic, effective form of product identification. This means there is ample room for suppliers, be they in the hardware or software space. Most barcode reading equipment used in South Africa today is supplied by North American companies, meaning that local pricing has come under significant pressure over the last two years. Even so, barcoding and its related equipment are still more cost-effective than fancier alternatives like radio frequency identification (RFID) technology. “While RFID was envisioned to replace barcoding 10 years ago, this is still not the case today, primarily because RFID technology is still too impractical, too costly and would have to be fitted at manufacturing level to really work,” says Aslam Peerbacus, senior channel account manager, Zebra Technologies. “The South African labelling market is not yet mature enough for RFID. Yes, we have noticed a slight shift towards RFID requests in 2015, with more interest expressed by our resellers, but this is not significant enough to change the usage landscape. There has been far greater adoption of handheld barcode scanners

and readers and this will continue in the short term,” he adds. Most companies wanting to identify products have a set budget and have made a 10- to 15-year investment; so they stick to normal barcoding. “RFID is currently better suited to the retail environment, where it is used to prevent stock theft. At the moment, the split between RFID and barcoding is about 90/10 in favour of barcoding. “The bigger battle at the moment is happening in the mobile OS space and the advent of the Internet of things (IoT). Competition is fierce between Android and Windows platforms,” he says. Peerbacus says many companies are looking at their IoT strategies, which are likely to develop significantly in the next two years or so. “Most companies are adopting the BYOD (bring your own device) philosophy, with added printing technologies. Industry is developing

solutions that have the ability to receive and handle data from multiple sources.” Barcoding has evolved from simple 1D scanning to 2D technology. The latter is advantageous in that it can read barcodes that have been torn. These scanners can also interpret 1D barcodes, while 1D systems are confined to reading 1D barcodes only. The 2D barcode scanners can also be used to identify the information on driver’s licences, whereas 1D systems cannot. While the majority of local companies have moved towards 2D scanning technology, it does require a fairly substantial investment, and careful consideration is required. Printed barcoding has found its place in a number of industries. It is trustworthy, reusable and recyclable, simplistic and can be produced at very low cost. Tagging and tracking higher-value items can be done through electronic barcoding, if so required, and so barcoding, in general, has a long lifespan ahead of it.

“While RFID was envisioned to replace barcoding 10 years ago, this is still not the case today.”

TWA | Jan/Feb 2016

air cargo

Africa's aviation recipe

Africa needs safe, efficient and affordable air transport links to make the most of its people and resources. It is no easy task, says IATA’s Tony Tyler.

he all-accident rate in Africa last year was 11.18 for every million flights, far higher than the global average of 1.92. As at October last year, only 17 out of 54 African states complied with 60% or more International Civil Aviation Organization (ICAO) standards and recommended practices. National civil aviation authorities need to be given greater resources and operational independence and, where necessary, must rely on regional pooling initiatives across the continent to promote safety. With government commitment, the adoption of global best practices, and the continued vigilance and excellence of Africa’s aviation professionals, there’s no reason why Africa cannot match the levels of safety enjoyed in other regions of the world. Two important pieces of regulation African states need to adopt without delay are the Montreal Convention 1999 (MC99) and the Montreal Protocol 2014 (MP14). MC99 establishes a standard approach to airline liability, delivering benefits to all stakeholders without creating a regulatory burden. It provides better protection and compensation to passengers, and provides the legal framework for digital invoicing, meaning faster shipments for timesensitive goods. Together with initiatives already undertaken by airlines to prevent

and manage unruly passengers, MP14 will act as a deterrent, giving states the legal powers they need to take action. Unfortunately, implementation of the Yamoussoukro Decision (YD) has been slow, and the benefits have not been fully realised. The logic for opening Africa’s skies is inescapable, and it is very encouraging to see the states of the African Union commit themselves to implementing YD by 2017. African states are urged to accede to and implement the World Trade Organization’s Trade Facilitation Agreement (TFA), which offers enormous potential to reduce transport costs by expediting air cargo through smart borders, for which the TFA sets down clear and practical provisions to establish. Unfortunately, African airlines do not have a strong profitability record because the cost of doing business in Africa is too high. Fuel costs, for example, average around 20% more than elsewhere in the world. Jet fuel taxes, passenger taxes, solidarity taxes, tourism taxes, fiscal stamp taxes, value-added taxes, sales taxes, and transportation taxes all add up to a costly burden on the continent’s airlines. Investment is needed to create the right airport and air navigation facilities to ensure the expected growth in passenger numbers and that aircraft movements can

More than 300 participants attended the 47th General Assembly of the African Airlines Association

be accommodated. But investments must be considered wisely and decided on in close consultation with airlines. In Africa, cross-subsidising and prefunding, which are forbidden and strongly discouraged under ICAO rules, are all too prevalent. Even where much-needed investment is being put in, we have concerns on the levels of expenditure. Airlines have a right to be consulted in detail when you consider the spending of a billion dollars in Ndjamena, three billion dollars in Addis Ababa, and three-quarters of a billion dollars in Dakar. Some states are getting it right; although its airport development charge remains too high, Senegal moved to reduce airport and passenger taxes earlier this year. Over-investment will cripple the industry with a cost burden that will weigh down air connectivity. If African governments were to take the lead in genuinely consulting the users of the infrastructure before it gets funded, built or operated, they would soon find themselves with the right mix of facilities, growing lockstep with demand, providing the right level of world-class quality, and at the right price to maximise growth. The author

Tony Tyler is the director general and CEO of IATA.

Index to advertisers Afri-Logistics Supply Convention 36

Globaltrack OFC

Sapics 2016 23

Airlink Cargo 13

Imperial 28

Scania IFC

BPW Axles

MAN 12

Shell 5

Cape Logistics 2016 30

MasterRubber 34

TyreExpo 16

Digicore OBC

MiX Telematics IBC

Volvo Used Trucks 3

TWA | Jan/Feb 2016

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