Transport World Africa Sept/Oct 2015 by 3S Media

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Intraregional supply chain solutions from producer to consumer

Fleet Management

Supply Chain Logistics

Freight Forwarding

Diagnosing better health

Women in logistics stand together

Barriers to entry

MIX TELEMATICS

MiX Fleet Manager Essential

IN THE HOT SEAT

Jack van der Merwe, CEO, Gautrain Management Agency “Growth around the stations has been rapid.” P10

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Intraregional

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Intraregional supply chain solutions from producer to consumer

Freight Forw

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COVER STORY MiX Fleet Manager Essential – the affordable solution for monitoring drivers and vehicles

INSIDE

MIX TELE MATICS MiX Fleet Manager Es se

THIS ISSUE

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IN THE HOT SE AT

Jack van der

“Growth arou

Merwe, CEO , Gautrai ions has bee n Management Agency n rapi

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46 Septem ISSNber/Octo 1684-79 ber 462015 Mar/Apr Vol. 13 2013 No.Vol. 5 / 11 R50.00 No. 2incl. / R40.00 VAT incl.

REGULARS

2 4 8

Editor’s Comment Inwards and upwards FESARTA Building unions Regional News

IN THE

HOT SEAT

Jack van der Merwe CEO, Gautrain Management Agency (GMA) P10

COMMERCIAL VEHICLES Tipping the scales Making light work Into the heartland High profile Source of growth TRAILERS Sweeping changes FLEET MANAGEMENT Diagnosing better health Given the once over FUEL Green wave

13 14 17 18 21 22 23 24 26

FREIGHT FORWARDING

VAT

Barriers to entry

SUPPLY CHAIN LOGISTICS Women in logistics Building blocks CORRIDORS Taking initiative Sharing the road responsibly PORTS Judge dredge RAIL Short stop Mutual benefits LEGISLATION Get your Act together TRAINING A world of difference WAREHOUSING Don’t be upstaged AIR CARGO Framework for African connectivity

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TWA | Sept/Oct 2015

EDITOR'S COMMENT

Inwards and upwards

Editor at the drive-through

HINA BROKE with tradition this August, taking (two) steps in the same week to devalue the yuan relative to the US dollar. It’s the first time the Chinese currency has not tracked the greenback since 1994 – a change that has sent reverberations throughout the world’s financial markets. While Beijing’s intentions (labelled economic manipulation by some critics) have not been clearly defined, the reduction in manufacturing output has put the brakes on China’s freighttrain-like growth momentum. This shouldn’t really come as a surprise; in January, this year, we learned that China’s 7.4% annual growth rate for 2014 was its lowest in 25 years. By devaluing the yuan, China is trying to kick-start its spluttering export economy. As such, its exports have been made more price-competitive, albeit artificially. More importantly, the yuan devaluation has heaped pressure on the US and just about every currency in the world – including the volatile rand, which continues to lose ground to the resurgent dollar, euro, and pound. None of this is good news. Global commodity prices can expect to take a further knock in the wake of Beijing’s policy shift, which is also bad news for places like Australia and Canada – and almost all of Africa – as well as for the world’s mining and minerals sectors and downstream economies like rail and road commodity transportation. The impact of depressed commodity prices is already being felt close to home, which Barbara Mommen, CEO of the Maputo Corridor Logistics Initiative (MCLI), makes reference to on page XX. Reduced demand for oil and a glut of Brent crude should mean more relief at the pumps in the foreseeable future, although that won’t much help if there’s nothing to transport! Like many African states, South Africa has an intimate relationship with China, the consequences of which extend to many spheres – from locomotive supply to infrastructure spend and loans, tourism and politics, power generation and, soon, the make-up of our scholastic curricula. China is South Africa’s largest trading partner, although the accrued trade deficit indicates a lopsided relationship. It appears that we are very much at the mercy of the decisions China makes – just look at the Visas it prohibits us from issuing if you need convincing! For South Africa, and Africa, the message from all of the above should be clear: let’s look inwards, not east, to boost Africa’s trade and socioeconomic development.

Tristan Wiggill 2

TWA | Sept/Oct 2015

Publisher Elizabeth Shorten Associate publisher Nicholas McDiarmid Editor Tristan Wiggill • tristanw@3smedia.co.za Head of design Beren Bauermeister Designer Ramon Chinian Contributors Martin Bailey, Margaret Bango, Charles Dey, Mike Fitzmaurice, Elvin Harris, Dave Logan, Barbara Mommen, Paul Nordengen, Mike Schussler Chief sub-editor Tristan Snijders 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 Joshua Starkey • joshua@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

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FESARTA COMMENT

Building unions FESARTA has commenced with what it hopes will become a close working relationship with the International Road Transport Union (IRU) and the North Star Alliance.

HILE WE’RE excited about

working with the Geneva-based IRU, we’re not entirely sure how closer alignment and deeper collaboration with the union will be received by various transport associations in SADC, the East African Community, and COMESA.

On the other hand, we appreciate the IRU’s eagerness – and readiness – to get involved with us. The IRU has established transport systems worldwide and we feel that introducing their systems won’t require us to reinvent the wheel. The IRU is a world road transport organisation that 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. It is working with a range of stakeholders throughout Africa to explore the possibility of implementing Mike Fitzmaurice is the CEO of the the world’s only global Federation of East transit system, TIR, as and Southern African a transit solution for Road Transport African trade and transAssociations (FESARTA). port corridors. It has

TWA | Sept/Oct 2015

engaged, in particular, with Kenya, the East African Community, and the Northern, TransCaprivi, and Maputo corridors in Southern and East Africa. We believe FESARTA needs to align itself with a global player and the IRU fits the bill. The same could be said of the North Star Alliance, which is keen to roll out antiretrovirals on the North-South Corridor and seeks assistance from FESARTA in this regard. The previously used GPS North-South Corridor Monitoring System, pioneered by TradeMarkSA and others, is being recommissioned. Our intention is to replace it with an updated system, while adding several new features to further its capabilities. Ultimately, we want to create an easy-touse and affordable information-sharing platform for the transport and logistics industry in Africa. Using an Android platform, we plan to incorporate highly relevant corridor information, including wellness centres and truck stops, and to have this information on hand for drivers and transport operators. In the latter regard, the North Star Alliance is a powerful ally. It takes converted shipping containers, which it refers to as ’blue boxes’, to hard-to-reach people across Africa. These blue shipping containers house clinics,

Basic medical services are provided where they’re needed most

which deliver public health programmes to people with increased health risks, such as truck drivers and sex workers, and primary health care to communities with limited or no access to medical services. Through the IRU and FESARTA, we believe the continent will be better plugged in to the global economy and better placed to promote regional development and integration, especially along regional trade corridors. The IRU’s transit system is the only global intermodal trade facilitation tool that can underpin the growth of Africa’s rapidly developing deep water ports and national road networks. It is the ideal tool to support this development through stronger regional and global trade harmonisation and transport facilitation. This will likely usher in a new era of growth and prosperity and bring economic benefit to Africa and its international trading partners.

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COVER STORY

MIX TELEMATICS

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fleet management solution MiX Fleet Manager Essential is a simple, reliable, and affordable fleet management solution for monitoring drivers and vehicles.

F YOU THOUGHT fleet management was only for the ‘heavyweights’ of the fleet world, think again. MiX Fleet Manager Essential is the perfect solution for fleet managers and owners looking to boost efficiency with an indispensable set of features, including tracking, vehicle management, and driver behaviour monitoring.

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MiX Fleet Manager Essential offers peace of mind by knowing exactly where vehicles are and how they are being driven. By tracking mobile assets, in real time and historically, fleet operators are able to better utilise their assets, manage driver behaviour, and boost the performance of their fleet, ultimately saving money. Another major advantage is improved customer service. By being able to find the closest vehicle to a customer, the number of customer visits can be increased and estimated times of arrival improved. Distances travelled can also be monitored and reduced, while vehicle misuse can be detected and stopped. MiX Fleet Manager Essential is affordable and accessible to fleets of all types and sizes, making it the obvious and convenient choice. Many fleet managers need to monitor the locations and statuses of their

TWA | Sept/Oct 2015

vehicles and drivers, without wanting the complexity – and cost – of a premium, full fleet management system. MiX Fleet Manager Essential plugs this gap by offering fleet operators a simpler, more affordable tracking solution. The benefits of the MiX Fleet Manager Essential

solution include: • improved operational efficiency, with the integrated reporting suite delivering reports via e-mail • enables fleet operators to speed up arrival times at customer sites as well as provide customers with more accurate estimated times of arrival by using simple and easy-to-use functions, such as the ‘find nearest vehicle’ feature • fuel savings and improved safety due to driver behaviour modification, through real-time driver information and event notifications • thanks to the service and licencing reminder feature, assets are kept operational through the efficient management of maintenance schedules. This ensures fewer unnecessary costs and unexpected breakdowns • reduced risk and unauthorised vehicle usage. Knowing where mobile assets are and being notified about their operational statuses enables customers to reduce mileage, defend false accident claims and ensure

COVER STORY

THE BUILDING BLOCKS OF SUCCESS The brain behind MiX Fleet Manager Essential is its feature-rich software platform. Users - typically business owners or fleet managers - can log on and access activity timelines, insightful reports, notifications, an information hub, and more to: • t rack vehicles on a map in real time, or perform a replay •d efine and manage locations, stops, and zones •g et notifications (online and via email) for events relating to impacts, speeding and harsh braking, acceleration, and cornering • i dentify and manage drivers, licences, and certifications •m anage vehicles, odometer readings, licences, certifications, and services •g enerate movement, event, trip and utilisation reports.

that their vehicles are not being used outside of authorised hours • improved driver behaviour, with basic driver management, by configuring various event alerts including speeding, harsh acceleration, and harsh braking.

Affordable fleet management for everyone MiX Fleet Manager Essential enables fleet operators to track and trace the movement and behaviour of their vehicles and drivers from anywhere, at any time. Be it a fleet of trucks or a mixed fleet of cars, vans, and trucks, MiX Fleet Manager Essential is fleet management made easy.

Vehicles are fitted with a small on-board computer that captures and transmits vehicle and driver data. Users can then access this information online, via the solution’s web-based software platform. Some features are also available via MiX Fleet Manager Mobile, the solution’s free app for Android and iOS devices. Both web and mobile interfaces are easy to navigate and are compatible with multiple browsers and operating systems. So, data and reports are available 24/7 from any Internet-enabled computer as well as from smartphones and/or tablet devices. MiX Telematics' Software-as-a-Service (SaaS) model makes the MiX Fleet Manager Essential tracking solution cost-effective, flexible, and highly functional. Web and mobile accessibility makes tracking vehicles easy and convenient, while insightful data provides actionable intelligence on demand.

Optimisation Optimising the use of mobile assets through vehicle tracking results in increased levels of efficiency and effectiveness. By tracking vehicles and monitoring driver behaviour, fleet managers are able to improve their customer service levels, eliminate unnecessary costs, and take greater control of their fleets. They’ll know precisely where vehicles are, or were,

better understand traffic violations, and gain insights into general vehicle utilisation. MiX Fleet Manager Essential has

the capacity to report basic, real-time information on current and historical vehicle locations and driver behaviour. MiX Insight Reports give the fleet manager access to various reports, allowing for trend analysis. Movement reports include: • daily movement report • location overview report • daily and weekly location visit report • movement overview report • summary movement report. Trip and utilisation reports include: • daily trip report • detailed trip report • monthly trip report • trip summary report • vehicle performance report.

Event reports include: • detailed event report • event overview report • event summary report. By establishing a connection to their vehicle and drivers, fleet managers know where their mobile assets are at all times and how they are being operated.

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MiX Fleet Manager Essential enables fleet operators to track and trace the movement and behaviour of their vehicles and drivers from anywhere, at any time

TWA | Sept/Oct 2015

REGIONAL NEWS

SOUTH AFRICA

Read more on www.transportworldafrica.co.za

Intelligence, in partnership with Onnyx Network Holdings. “We believe this development in Bloemfontein is a huge step towards achieving our vision, which is to be the leader in the provision of total landside services to the South African freight industry within the next five years,” says Onnyx CEO Jan Nair. Nair thanked Transnet Freight Rail for its guidance and support at the opening. “We recognise the importance of, and look forward to, the support of all our longstanding and new friends in the freight industry, in the successful pursuit of our goals and objectives,” he added.

Bloem gets container park A SHIPPING-LINE-contracted container park and bulk product packing and distribution centre has opened in Bloemfontein, Free State. The adjacent facilities are the result of agreements between the Bloemfontein Container Park and Logistics

SOUTH AFRICA

Manganese container terminal welcomed THE COEGA Development Corporation (CDC) has welcomed national cabinet’s decision to issue Transnet Port Terminals with a permanent operating licence for operating the manganese terminal at the Port of Ngqura. The operating licence will support the upgrading of the South African railway network from the Northern Cape to the Port of Ngqura, adjacent to the Coega IDZ. In the first R2.3 billion phase, a rail infrastructure development project will double sections and introduce new passing loops for 200 wagon trains through a railway line

TWA | Sept/Oct 2015

that runs from Coega to Cradock, De Aar, Kimberley, and finally Postmasburg. The existing manganese at the port of Port Elizabeth will be relocated to a new facility at the Coega IDZ. “The decision will strengthen Nelson Mandela Bay’s position as a prime location for investors – especially those with interests in mineral ores and processing plants beneficiating raw minerals for export and downstream manufacturing in the metro,” said Dr Ayanda Vilakazi, head: Marketing and Communications, CDC.

Covering 22 000 m2, the facilities are designed to make containerisation more costeffective and sustainable. At full capacity, the facilities will employ more than 50 staff. The bulk handling side of the facilities boasts a state-of-the-art irrigation system, piloted and developed by the University of the Free State. “This is the first time that this type of stockpile irrigation is being built on-site and the goal is to reduce dust and stock loss to zero,” explains Dirch Olsen, senior partner of all three entities. “The impact on the health and safety of employees and the surrounding environment is reduced to the absolute minimum. This is a clean and green site – the most environmentally friendly site of its kind in the country. “Until now, the focus has been on renting railway land and ‘ducking’ when markets go soft. This development is a statement of both faith and intent, and belief in the future of South Africa,” concludes Olsen.

“The manganese container terminal has been one of the fundamental drivers for developing the Port of Ngqura and the Coega IDZ. It will ensure bulk mineral storage and handling facilities at the Ngqura deep seawater port and the beneficiation of minerals in the IDZ,” he added. Dr Vilakazi said Coega and the Port of Ngqura projects were planned and designed as national strategic growth nodes, promoting economic growth and development in the Eastern Cape through manganese.

REGIONAL NEWS CONSTRUCTION OF A new railway bridge over the Umbeluzi River, in the Boane district of Mozambique, is scheduled to start soon. The country’s rail operator, CFM, says construction work will cost an estimated $14.7 million and has an implementation period of 15 months. The operator added that work was required in order to correct the bridge’s worn prestressing cables. The new railway bridge will be built at kilometre 37.7 of the Goba line, in the vicinity of the current bridge, which, when the Ressano Garcia railway came to a halt, was considered as an alternative route for the flow of goods from South Africa to Port Maputo and vice

SADC

Work begins on Mozambique railway bridge

SADC

and brownfield airport projects for sub-Saharan Africa – outside South Africa – have been identified this year, says Paul Runge, managing director of Africa Project Access. “In 2013, the larger airports in sub-Saharan Africa (those with over a million passengers per annum) handled approximately 56 million passengers. Although about half of this total was for South African airports, there has been a sharp rise in passenger and cargo handling at airports outside of South Africa,” he motivates.

Airport projects on the rise THE AFRICAN Development Bank (AfDB) estimates that the financial requirement to close Africa’s infrastructure deficit amounts to $93 billion, annually, until 2020. It says a large percentage of the shortfall relates to transport – mainly rail, roads, and ports – although Africa’s airports also require attention. “There has been a particularly strong increase in the flow of airport projects in the sub-Saharan region. Twenty-five greenfield

versa. That option, however, was discounted early on due to security issues. With an approximate length of 226 km between the Matsapha Industrial Park and Port Maputo, the Goba line has the capacity to receive trains with 50 wagons, travelling at speeds between 50 km/h and 60 km/h. Traditionally, the Goba line has been used as a route for sugar exported from Swaziland through Port Maputo, with amounts ranging between 200 000 tonnes and 240 000 tonnes per year.

According to the African Airlines Association, total global freight carried by African airlines has increased substantially and is nearing the one billion tonne mark. “This interesting development is multifocused and pertains to new planned international airports, the expansion and rehabilitation of existing airports, and a new focus on regional and provincial airports. Airports are being converted into commercial hubs, including retail outlets and hotels. The aerotropolis project connected to O.R. Tambo International Airport is a good example,” he says.

TWA | Sept/Oct 2015

HOT SEAT

Fast-tracking economic growth Gautrain Management Agency (GMA) CEO Jack van der Merwe discusses Gautrain’s economic impact with Tristan Wiggill.

GAUTRAIN

Rudrarup Maitra Head Sales - International Business Commercial Vehicles Tata Motors Limited

How does the GMA interpret KPMG’s Economic Impact Study (EIS) findings? JvdM When the idea of Gautrain was first tabled, it was founded on the premise that it would be a Blue IQ project. This is a longterm economic growth project that focuses on growing the economy of Gauteng to the benefit of the rest of the country. Supporting this goal, the extensive EIS report indicates that growth around the stations has been rapid. We've invested R27 billion and we've gotten back R47 billion already. This impressive return on investment justifies the government’s decision. Theoretically, we are looking for transit-oriented development. We plan to build 18 to 19 new stations. However, the fight is to get the stations closer to where people are living – the inverse of what happened during the initial public participation process. We are pleasantly surprised by the magnitude of the impact and how quickly it has happened. An average of 50% of the land was undeveloped within a two

TWA | Sept/Oct 2015

kilometre radius of the stations, rising to 75% at a five kilometre radius – so, there was opportunity to develop. While there have always been geometric requirements for stations, there are now economic requirements as well.

Which aspect(s) of the EIS findings are you happiest with? Initially, people were very scared of having a transport corridor so close – thinking that property values would decrease. This study has shown that there is no need to fear. We've found that, all over the world, people assimilate fixed rail into the fibre of their cities, which is now confirmed in South Africa.

What do the results mean for Gautrain, the GMA, and for provincial and national public transport projects in general? The results are positive. Heavy rail represents a massive investment, but this investment is justified as it has a greater capacity to transport people than alternative modes of transport. The report is encouraging as it

shows that we have examined the scenario and seen that it works.

Will the EIS results fasttrack rapid rail expansion projects in the province? Normally, these would suggest positive growth; however, South Africa, alongside the rest of the world, is in a financial bind. Thus, such projects are queued up for completion. Jabu Moleketi always said that governing means prioritising. We need to consider not only value for money, affordability, and risk transfer, but also economic benefit.

it, via Randburg, to Sandton and extend the existing line from the airport to Boksburg. We’re considering extending the current line from Park Station, underneath the city, to the M2. We've upgraded the demand model and will get the results soon. We are discussing this matter with the three metros and Mogale City. The corridor will have to be between the N14, past Diepsloot, and along the Western Bypass of Johannesburg. Another line is going to run somewhere inbetween there and continue past Pretoria East into Mamelodi.

How will services be expanded?

How will you convert dyed-in-the-wool car users?

We’ve developed an Integrated Transport Master Plan, which we call ITMP25. The area between Lanseria, Tshwane, O.R. Tambo, and Johannesburg houses 80 units per hectare. These numbers justify mass transit. Thus, the ITMP25 proposes a line from Mamelodi down to Naledi and to the west of Johannesburg. This is the line that we’re investigating now and we may link

Public transport is a carrot-and– stick situation, where neither works without the other. The stick, if one looks overseas, is congestion pricing. Another consideration is the capacity of the Ben Schoeman highway. We are running at 99% availability norms, and 98.5% punctuality norms. We predicted that, by 2020, 75% of passengers would be car owners leaving their cars

HOT SEAT

at home – five years later it’s at 77%. Public transport must be made the mode of choice.

Will similar rapid rail services emerge in other provinces? Dube TradePort wants to put in a light rail from King Shaka International to Durban. Cape Town could warrant one, as well. It’s an expensive investment and you have to have the numbers to justify it. As such, big metropolitan areas are likely candidates.

Is there a need for a rapid rail link between provinces? A new freight line from Durban to Johannesburg will be used to run sleeper trains. Longdistance passenger travel has developed such that trains are capable of travelling at 300 km/h, or more. However, to travel at 300 km/h, the geometric design has to be very strict and costs a fortune. To mirror the freight line would require building tunnels and bridges right through the Drakensberg and we simply don't have the volumes.

Do you view bus rapid transit (BRT) as competition? Public transport can only work if it's an integrated system, with synergy between modes. We have three BRTs in the area in which the train operates. People will take the BRT to the station, ride the train to Pretoria, and then use BRT there. One mode feeds off the other.

What is needed to ensure the continued popularity of rapid rail services? We run 6 500 trains per month; the challenge is to run them punctually, to maintain cleanliness, and to keep them safe and secure. Creating a safe and predictable environment is essential. Soft issues determine success – you can't spend a lot of money on infrastructure and then forget about the operations.

ticket and interoperability system. We will probably be there in about 18 months’ time. The idea is that you would be able to use a single ticket for Gautrain, Metrorail, the BRTs, and maybe even for taxis. Fare harmonisation is an issue, because it requires a back office and there has to be a body that cross-subsidises and handles the money. The DoT has created a transport commission as the first step in creating a transport authority for Gauteng.

We're already at the airport and are negotiating extensions. We’ve been asked to supply a station on the eastern side of O.R. Tambo, which is part of the planning we're doing at the moment. The aerotropolis has time contours around it. The better the connectivity, the wider the circles are. Sandton is 15 minutes from the aerotropolis, by Gautrain.

What does the future of public transport look like in Gauteng?

Transport is about supply and demand. While I’d like Gautengers to not have to use their vehicles in peak periods, current supply is more than the demand for 18 hours of every day. I can see a reduction in car ownership but not a total move away from it.

What is in the ticketing and payment method pipeline?

Economies of scale mean we are fixed into BRT for public transport, and the recapitalised metro rail for heavy rail. We are trying to get an economic model for taxis. We're negotiating subsidised buses. We've announced that these are the modes that we're going to develop. However, making the modes greener will be challenging.

Our regulations and specifications have been developed by the Department of Transport (DoT). We are working towards a single

How will Gautrain be incorporated into the aerotropolis?

Will Gautengers ever be able to live completely car-free?

www.gautrain.co.za

TWA | Sept/Oct 2015

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Isuzu Motors sub-Saharan Africa (IMSA), created in January this year, is located in the same Johannesburg building as ITSA. “They have a specific focus on their territories because the dynamics are so different,” he says. “It’s good that we’re in the same building; we have different focuses and different territories, but Isuzu is looking at the continent of Africa by virtue of what the consumer needs in each territory. You can’t have one solution that covers all of it.” Uren explains that, while there are opportunities in Africa, timing, quantities and degrees of success are largely unknown. “If you’re ready, and have a business and a process that can be scaled up and down quite quickly, you can make use of those benefits.” ITSA supplies the odd truck to Kenya, a country Uren says will outsell South Africa this year. “We’ll do around 4 500 units, but Kenya will probably do at least 5 000; East Africa is flying. From an IMSA perspective, they have their

own source of products that are specific to those territories. The assembly operation in Kenya is quite significant and equal to the volumes we do here.” African markets are challenged by a lack of commonality, he says. “We are starting to provide common business solutions, used here, into those areas in terms of vehicle body, model, and specification. They want the same after-sales service, which, in Africa, has never really happened before.” “As ITSA, our roles and how we act and present as a company and how we interact with our suppliers and dealers has had to become commercially astute. This is business we’re talking about, not trucks. It’s an enterprising business model that needs thought. While there is a lot of doing, we Craig Uren, COO at Isuzu Truck need a lot more thinking South Africa around what we need to do. That’s what changes the value and that’s what moves the mind. Our enterprise is correctly scaled at this point in time and we’re looking at the graphs so that we can run with it on a scale basis.”

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COMMERCIAL VEHICLES

Making light work Three highly specialised Quon CW26 370 6x4 UD trucks, fitted with Fassi cranes, Socage aerial platforms, and Kinshoffer pole manipulators, are being used to erect and maintain electrical infrastructure in Cape Town.

The metro’s specifications called for a vehicle that could operate effectively on a variety of road conditions, including urban areas, dumping sites, and steep inclines

HESE ARE VERY unique and versatile units with which city workers can perform a range of tasks, all the while optimising resources and increasing the department’s efficiency,” says Lyndon Smith, fleet and tender manager at AAD Truck & Bus. “The aim of this all-in-one vehicle is to improve the turnaround time in the electrical pole-planting and relocations process. It can handle a bigger workload and a wider range of pole replacements, so the metro has an opportunity to investigate a reduction in its operating fleet,” explains Smith. “It will also minimise the impact on traffic congestion and reduce public risk on the city’s roads when pole replacement takes place.” The ‘first-of-their-kind’ vehicles were the result of a nine-month-long tender and consultative process, which included research and development by the AAD dealership and its suppliers. It required continuous input from the City of Cape Town Electricity Services technical support team in order to achieve the desired end result. “We spent a lot of time working through the specifications and solutions with the workers who will be operating these units. In the end, we believe that it is this attention to detail and the collective input by all parties involved that enables us to deliver these assets,” Smith adds. The crane has three extensions, with a lifting capacity of 1 075 kg, while the aerial platforms allow workers to be safely lifted to a height of 13.5 m to inspect, maintain,

TWA | Sept/Oct 2015

and repair streetlights. Due to the articulated platform’s small dimensions and weight, it can overcome different obstacles and perform complex movements. The pole manipulator can lift up to 600 kg and is the first in the country to be used in a three-in-one combination vehicle. “The rig can carry up to four 11 m streetlight poles. The biggest challenge was getting the combination of equipment in the correct position on the purpose-built body so as to work with the pole manipulator,” explains Smith. The high specification, inherent strength, and minimalist approach of the overall Quon package, proven through extensive testing, make them ideal workhorses. The range employs a high level of focused technical specification but remains safe and easy to operate and maintain. The units were specified with Allison 4440PR fully automatic gearboxes, with integrated PTO and retarder. This ensures ease of operation with an electronic shift control selector. A SafeStop multi-product interface central distribution board was also specified to offer a plug-in connection for up to eight customer-specified aftermarket products. UD Trucks’ Quon range utilises a 13-ℓitre, six-cylinder, turbointercooled in-line engine, which features an innovative unit injector that increases the maximum fuel injection pressure. This improves overall combustion efficiency and achieves low emission and weight-reduction efficiency, leading to improved fuel economy.

The range employs a high level of focused technical specification

MSS UD Q 06

Score with a UD Trust Basic service agreement

/ ars 3 ye000km 150 Take advantage of this limited time offer now. The Quon range has one key ambition: To deliver maximum transport efficiency. That is why with the sale of every new Quon, on top of the numerous best-in-class efficiency features and technologies, you now get a UD Trust Basic service agreement, at no extra cost. You are covered for a period of 3 years or 150 000km/3000Hrs, whichever comes first. Quon, moving you forward. Customer Care and 24-Hour Roadside assistance 0800 008 800 For product queries or to locate your nearest dealer, go to www.udtrucks.co.za Going the Extra Mile

Limited time offer valid from 14 July 2015 until stocks last. T&C apply, product in photograph is for illustration purposes only and is subject to stock availability.

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.

COMMERCIAL VEHICLES

Into the heartland Cargo 2 Congo coowner Ken Hall and Tristan Wiggill talk road transport into the heart of Africa. Can you elaborate on the type and scale of projects you’re involved in? KH We’ve been servicing the mines in the Democratic Republic of the Congo since 2006, as a preferred transporter. We have a fleet of 150 trucks running from South Africa dedicated to this project, and another 40 trucks that are based in Zambia, servicing the mines from there.

What security requirements are needed? We have had to place our own security at the different border posts, to assist the drivers while waiting to cross. All southbound trucks carrying copper or other high-risk goods have security travelling with them, and also travel in convoy.

How do you deal with road conditions? The road conditions have improved over the years; however, you have to create your own infrastructure – which we have done over the years. Our policy has been to buy new trucks rather than used trucks; our thinking behind this is that we would limit the chances of breakdowns. Breaking down across the border becomes a very expensive exercise.

How important is local knowledge and experience? It’s extremely important; we have travelled this route for many years. Our operational staff do route and road surveys twice a year and we have built our infrastructure around employing local people that have been in the industry for years.

What is the make-up of your fleet? We have a mixed fleet, comprising Freightliner, International, Volvo, and Scania vehicles. Our trailers are comprised of 65% superlinks, while 35% are 15 m triaxles. We also have a few step decks. Our Consol fleet, which runs to Zambia on a daily basis, has a number of taut liners, as well as 10-tonners for express loads.

Why use Scania trucks? Scania has given us great service over the years. The products are on par with, or even better than, the best on

the market and our drivers love them. All trucks are bought with maintenance agreements.

How important is satellite tracking? This is also extremely important – our trucks are monitored 24/7. We don’t allow driving between 18:30 and 05:00. Tracking enables us to see exactly where the trucks are and the drivers know that we are keeping an eye on them. We try to get all trucks into safe havens at night.

Why use ‘runners’ at border posts? There are long queues at the borders; the runners double up as security and collect the paperwork from the drivers to take it to the clearing agents. This enables our drivers to remain with their trucks.

How critical is pre-planning? Again, this is of great importance. One of the biggest problems is delays; so, all loads have

Ready for the long haul; reaching the DRC from Johannesburg can take anywhere between 8 and 14 days

their papers sent ahead to the borders as pre-alerts. Our border management team monitors the goings on at the borders and keeps us updated if there are any problems that might require a route change.

What’s happening at the facilities in Kitwe and Chingola? The warehousing is used as a distribution hub; the Consol cargo that goes into Zambia is offloaded in Chingola and then delivered in smaller trucks. This enables the big trucks to achieve better turnaround times. It also gives us the opportunity to check the cargo to ensure that it has travelled well. Our workshop is mainly for running repairs, tyre checks, and the servicing of the Zambian fleet. The depot is only 40 minutes from the DRC border.

TWA | July/Aug Sept/Oct 2015

COMMERCIAL VEHICLES

High profile Tristan Wiggill got a taste of ProfiDrive at Pretoria’s Gerotek vehicle testing facility.

RIGHT, CENTRE Harry Macebele (Oricol), Noel Mbiza (Vital Distribution), Jack Sehata (MAN driver trainer), and Nkonzo Saula (Tedcor)

ROFIDRIVE IS THE umbrella brand name that MAN Truck & Bus gives to its professional driving academy worldwide. It is touted as ‘driver training by professionals, for professionals’. “It’s very important to have a strong connection between man and machine,” says Dave van Graan, head: Truck Sales at MAN South Africa. “Through ProfiDrive, we want to showcase the industry proudly and demonstrate its value to the economy.” For training purposes, the company uses a fully laden interlink with a combination mass of 56 tonnes. The manufacturer also offers training services to bus operators and services the sub-equatorial Africa region from Johannesburg. Classroom sessions are provided for generic ProfiDrive training. “When we get asked to go and do specific driver training intervention for safety and economy in a fleet, we focus on the product of that particular fleet. It then becomes a more fleet-product-specific course for that target customer,” Van Graan explains. Drivers from a handful of transport companies had to complete a series of preventative maintenance checks, familiarising themselves with the rigs they’d be operating over the two-day event, before moving onto more physical evaluations. Van Graan was quick to point out the value of pre-trip inspections. “In certain operations in South Africa, we have what we call PBS (Performance-based Standards) units, which run at 65 tonnes combination mass. These are big machines. A very important part of the start of every journey is to do an upfront vehicle walk-around assessment.” This assessment was done under the watchful eye of industry veteran Dave Scott. It was followed by physical assessments, evaluated by truck industry legends Jim Campbell and Pierre Sanson, and performed on the nearby ride and handling track. “This event demonstrates our recognition of the hardworking drivers in the industry and raises awareness of our driver development programme,” explained Van Graan.Adventurer Riaan Manser is part of the ProfiDrive ambassadorial programme and will assist in rolling out what Van Graan describes as “a fun-filled, educational knowledge transfer programme” going forward. He will also be driving the company’s trucks through Africa as part of the ‘MAN kann’ campaign. “The idea is to provide a sample of what we are aiming to do in the future. Today, we want to tangibly demonstrate the learning experience and benefits – in practice – by giving everyone who participates in these two days some valuable takeaways. It’s about optimising

TWA | Sept/Oct 2015

man’s performance and behaviour with his machines, to get maximum productivity and efficiency out of our rigs, and to improve the image of the trucking industry in South Africa.”

IN SOUTH AFRICA, PROFIDRIVE IS COMPRISED OF THREE COURSES: The Basics Course, which outlines vehicle controls and warning light functions, and explains what various technologies do. The Economy Course, which focuses on fuel consumption and productivity. The Hill and Low Maintenance Course, which is a uniquely South African course that teaches drivers how to reduce wear and tear on items like brake pads and tyres.

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TWA | July/Aug 2015

COMMERCIAL VEHICLES

Source of growth CEO Yusheng Zhang outlines, to TWA, FAW South Africa’s growth strategy for Africa.

HE COMPANY’S NEWEST arrival, the 8.140 medium truck, places emphasis on providing appropriate solutions, at the right price, for the larger Southern Africa region. “It also forms part of our goal-driven strategy further north into Africa, beyond the SADC region,” he says. Assembling the vehicle in South Africa has certain benefits: “There are many advantages – the most important being time to market in the northern countries and, of course, for the SADC and AU, the added advantage comes from the import/export duty agreements,” he explains. “We remain circumspect about drastically changing our local production complexity by adding too many different models. It remains in our interest to keep our production plant simple, and to continue to maintain the highest levels of quality, rather than chase huge production diversity without adequate upskilling,” Zhang affirms. “We plan to support sales in almost all right-hand drive African countries. The left-hand drive countries may still import from China directly. However, our plan is to assemble left-hand drive vehicles in future, so that they, too, can get similar duty advantages.” African buyers can save on complete vehicle import duties, which range from 25% to 40%, and can get their vehicles within 30 days of order. Sourcing vehicles from China would normally take around three months. Besides South African-spec vehicles, the manufacturer also supplies modified vehicles into the continent. Earlier this year, it exported five truck tractor units to Kenya and a similar order is being processed for Tanzania. In 2014, the company’s Kenyan dealer sold about 650 units with the best seller being a 6x4 extra-heavy tractor, produced in China and brought in through South Africa. To date, the Kenyan dealer has purchased 45 units through FAW SA. While most of the units sold in 2014

in Tanzania were imported directly from China, the local dealer has started to import a small number of trucks from South Africa. Seven units have been dispatched from Coega, near Port Elizabeth, where the trucks are either assembled from complete knock-down packs or arrive as fully built-up units. While it continues to invest in its local after-sales operations, such as parts stockholding and training, the company has no plans, at present, to expand parts stockholding into Africa. This would require support in customer workshops and customer technical training, although FAW SA does give Africa dealers technical support, where needed. “It is much more efficient than sending their technicians to China to get trained or to wait for FAW China to come to Africa to sort out technical problems.” Feedback from dealers in Africa has been positive. “They are impressed with the quality of our workmanship and our attention to detail,” he says. “One of the reasons for our success has been successful partnerships with so many other world-class regions and organisations. We take our partnerships very seriously and we see our business relationship within Africa as one of the most important of these partnerships. We hope to significantly contribute to job creation and the general stimulation of the local and African economies.”

Major infrastructure projects have boosted tipper sales

www.faw.co.za

TWA | Sept/Oct 2015

TRAILERS

Sweeping changes Dr Paul Nordengen describes the shortcomings in car-carrier trailer design.

HE CHALLENGE WITH designing and operating trucks and trailers is that the objective is to maximise productivity. While truck OEMs, trailer manufacturers, and transport operators all want maximum productivity, there are safety and infrastructure protection constraints. These constraints are dealt with through prescriptive regulations. Authorities put these regulations in place to ensure that trucks and other vehicles are safe on the road, don't cause undue damage to infrastructure, and don't put drivers and other road users at risk. However, researchers and various people involved in transport have found that the prescriptive approach contains loopholes and weaknesses. So, there are vehicles on the road today that comply with prescriptive regulations but are not that safe on the road and/or cause damage to infrastructure.

Performance-based Standards

Dr Paul Nordengen is a principal researcher at the Council for Scientific and Industrial Research in South Africa.

The University of Michigan has done a lot of work in developing what's become the basis for Performance-based Standards (PBS), which attempts to develop a performance envelope that takes the constraints (mentioned above) into account. PBS vehicles may not necessarily comply with prescriptive regulations, but are checked against acceptable safety and infrastructure standards. The prescriptive approach is all about defining the size and mass of vehicles, whereas a PBS approach looks at how vehicles perform on the road. PBS also tries to define certain manoeuvres and then set appropriate limits. The prescriptive approach to managing the off-tracking of a vehicle is to limit the overall length and wheelbase, while the PBS approach is to limit the maximum swept path. There are 22 m vehicles in South Africa with a much higher swept path than 25 m or even 30 m long vehicles, because of the way they’ve been designed. Trailer manufacturers and OEMs involved in PBS are learning new things

TWA | Sept/Oct 2015

about design. We had a baseline vehicle that was operating under an abnormal load permit and, although it wasn't illegal, it failed three of the performance standard tests. A couple of years ago, the abnormal loads committee wanted to stop abnormal loads permits for car carriers, which have been running under permit for about 30 years. The reason they were initially allowed to operate under permit was purely from an economic point of view; there’d be fewer car carriers on the road if it were possible for them to carry more vehicles.

The new abnormal The committee wanted to stop the permits because vehicles are not indivisible loads. We went into a period of discussion and the new road map for car carriers was approved just over a year ago by the abnormal loads committee. We agreed that all car carriers wanting to operate over-height and -length must be RTMS certified and PBS compliant. We conducted a study and found that the rear overhangs of car carriers are very large. While the prescriptive regulation allows for up to a 70% rear overhang of the wheelbase, there's no absolute limit. Because of the nature of the load, you have car carriers in South Africa with rear overhangs of up to 7 m. Under a PBS regime, the maximum tail swing allowed is 300 mm. In South Africa, with different types of car carrier combinations, the rear overhang often varies between 5 m and 7 m. In Australia, they have similar regulations, but have an absolute limit of 3.7 m, which is limited by the percentage of the wheelbase. Their car carrier tail swings don't exceed 0.3 m; whereas, in South Africa, we have carriers with tail swings of up to 1.25 m – that's not very good for going through intersections or for manoeuvring at depots. New, longer, bigger car carriers, as of 1 April 2014, have to be PBS compliant, while permits were issued for older carriers up to 23 April 2015.

FLEET MANAGEMENT

Diagnosing better health Limited access to health facilities is the biggest factor impeding better health and wellness among drivers, learns Tristan Wiggill.

O ADDRESS THIS situation, Scania South Africa has embarked on a programme to meet the needs of workers and ensure there are safe drivers on the road. By going to the drivers, the company creates an opportunity for drivers to know their status and allow them to be appropriately managed. “Through Reality Wellness, we conduct educational drives; screen blood pressure, cholesterol and glucose levels; and perform HIV counselling and testing,” says Alexander Taftman, product and marketing director at Scania South Africa. Service stations along main highways have been used over the past four years, allowing the programme to reach numerous drivers along the way. Company visits have also been arranged to provide the service on– site, as many drivers spend the majority of their time on the road. Testing campaigns are usually planned during peak periods, including over Easter and during the festive season. “The aim is to encourage road safety during peak transport periods. It is all part of adding value to the industry by testing one driver at a time.” Healthy drivers are the key to safer roads. “You can drive the safest truck; but, if you are an unhealthy driver, you are a risk to the public. In order to invest in the industry, drivers need to be given opportunities to invest in their own health and create more awareness. Good drivers are difficult to find and replace. A win-win situation will result if we keep well-trained drivers in the industry and ensure that their skills are retained,” he says. Funding the initiative doesn’t deter the company. “The cost of not having a health and wellness programme, if you take accidents and the loss of lives and assets, far outweigh the capital investment needed

to operate these programmes,” he explains. Drivers are individually tested and, during the process, education is given to them about HIV and general health and wellness. When a driver is classified as high risk, he/she is immediately referred to a clinic for treatment. The follow-up process includes the close monitoring of high-risk cases to ensure that the necessary treatment programmes are administered. In some cases, companies receive statistical reports and risk profiling. In terms of logistics, a lot of preparation is needed. “A wellness initiative like ours is similar to a roadshow, in which vehicles, trailers, staff, and equipment are moved to a number of sites where wellness interventions take place. “We are pressed for time, as we engage the drivers while they are en route. To avoid unnecessary downtime, we work with a time frame of a maximum of 20 minutes per driver – about the same time that a driver would normally need for a lunch break.” Taftman has some advice for companies worried about productivity losses incurred from driver testing. “Health screenings can be planned well ahead of time, in order to minimise the impact on productivity. Evaluations can be timed to coincide with scheduled downtime, such as when a truck is brought in for a service,” he points out. Following the test, a comprehensive report is given to each driver and a summary/overview generated. This document reflects the number of drivers reached and includes risk profiling data. The reports are used to identify and develop future road safety initiatives.

“Drivers need to be given opportunities to invest in their own health.”

TWA | Sept/Oct 2015

FLEET MANAGEMENT

Given the once-over Tristan Wiggill learns that vehicle and workshop audits can save operators thousands of rands.

T A POINT IN his career, transport veteran Vic Oliver was contracted to independently audit the vehicles and workshops of a major bottling company with business interests in Angola, Malawi, Zambia, Mozambique, Lesotho, and Swaziland. Speaking at an Institute of Road Transport Engineer’s meeting in Johannesburg, he said that transport was not in the eyes of that company’s top management and so they didn't really know what was going on. “In some instances, no vehicle maintenance was being performed and, so, some of the vehicles were in a very bad state,” he reflected. Today, his audits are 100-point checks that are done on-site. They are neither Certificates of Fitness (CoF) nor roadworthy tests, as he doesn’t use brake roller testing equipment. They are essentially a means for managers to get independent insights into their businesses.

Checks and balances

“Vehicles are normally bought in a particular month,” Oliver continues, “which could be during peak operating periods. All of a sudden, all the CoF's are due. So, we say to operators: ‘Why don't you stagger them, so as to Assets and liabilities keep the workshop busy in leaner times and have trucks “One of the first things we ask operators about is their available during peak periods?’” asset register, which is frequently non-existent. It is imporOliver says many companies keep their vehicle service tant for companies to develop policies that detail how notifications on a computer, but this needs to be regularly they handle and monitor breakdowns. “For auditing to be checked so as not to be forgotten about. “The secret beneficial, top management has is to get drivers more accusto support it. Likewise, the peotomed to audits and for them ple on the ground – in the workto know their vehicles’ servicAUDIT OBJECTIVES shops – have to buy into it. Often, ing requirements,” he adds. In there is resistance from the guys many cases, small things are Increase a company’s profit margins working in the depots, because costing operators large sums of Ensure vehicle fitness and track regular they don't want outsiders telling money. Oliver expands, “We put maintenance procedures Reduce accidents them how to run their businesses,” in a system that saved a major Reduce roadside breakdowns explains Oliver. Typically, drivers vehicle rental company, with Reduce the amount of rework will complain about a fault with a over 3 000 vehicles in its fleet, Improve operating standards truck. On hearing this, a techniR750 000 a year in batteries. cian may suggest that the truck be We found that anyone was able sent to the workshop, only for the manager to demand to jump-start their vehicles and that the batteries were to know where the truck is and, on finding out, retort being stolen or swapped for older ones.” with “drive now, fix it later”. “We also find that, when He suggests that battery management be designated to vehicles break down, the driver will phone the office but a single person. Water levels in batteries are also frequentcan't properly explain what's wrong. In some cases, a ly not maintained, although this problem is being reduced mechanic might be sent 200 km or 300 km to assist somewhat, through maintenance-free battery technolonly for someone else to have helped the driver in the ogy. But, the batteries in car carriers, for example, which interim. So, the driver could be 10 km down the road and are difficult to access due to lower deck heights, tend to difficult to find,” he says. be neglected.

TWA | Sept/Oct 2015

FLEET MANAGEMENT Home ground disadvantage Oliver believes that vehicle breakdowns have become a true barometer of maintenance. He says, “Many operators don't have a sufficient workshop to service their fleets. As a result, servicing takes place in the yard, where parts are vulnerable to dust ingress. There are no pits in the yards either, so technicians can't get underneath the trucks, where the real maintenance work gets done.” Oliver has some advice for companies looking to outsource their vehicle servicing requirements. “Check the company’s housekeeping; if the housekeeping is good, you probably don't have to check their bank balance,” he suggests.

Handouts Oliver’s workshop audits have ascertained that many technicians don't possess adequate hand tools. “No records are kept of the tools that are coming in and going out of the workshop; damaged trestles are being used; and waiting for replacement parts is a major problem. Workshops

are without welding bays, water is found in compressors, and service schedules are not being kept,” he decries. “Most companies audited don't measure their productivity. While they pay their mechanics by the hour, no-one is measuring the actual hours worked. If you measure productivity, you can manage the workshop far BALANCED ADVICE better. Start looking at the causes of low productivity and, likewise, Enhance communication flow between drivers, technicians, and management with efficiency.” Perform proper, detailed pre-trip inspections Some yards are tightly Educate drivers about the vehicles they drive packed with vehicles. Cultivate a preventative maintenance This causes a problem philosophy Motivate drivers to know when their vehicles for visiting car carriers, are due for servicing because they are not Place service reminders, in the form of easy to manoeuvre and stickers, in the cab so much time is wasted The ratio of planned to unplanned servicing work should be split 80/20 waiting for drivers to move trucks around. The dearth of youth entering workshops is another area of concern for Oliver, who says he is saddened to see so few youngsters entering the trade. "There is so much to learn and the industry is changing so fast. Unless you keep up to date, you get left behind. Already there is a very poor technical knowledge of trailers in the industry,” he concludes. TWA | Sept/Oct 2015

Registrations now open for the:

21-22 October 2015

The Fairway Hotel, Spa & Golf Resort, Randpark, Johannesburg

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Uptime Manager: Mercedes-Benz FleetBoard SA

Musa Ndlovu

National Secretary, National Bargaining Council For Road Freight and Logistic Industry

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Chief Executive Officer, Smart Fuel

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Head of Mercedes-Benz FleetBoard SA

Clinton Savage

Head of Mercedes-Benz Trucks

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FUEL

Green wave

The transport industry is going to have to think laterally, if it is to limit the impact of the coming Carbon Tax, says Mike Schussler.

OUTH AFRICA’S LOGISTICS costs, as a percentage of its GDP, currently stand at around 13%, 7% of which is derived from land transport. “That figure is going to be hit quite hard by the Carbon Tax,” says economist Schussler. “It’s going to make transport even more expensive and less competitive”. The looming Carbon Tax, delayed until 2016, is likely to become one of the big taxes government will collect and is unlikely to be ring-fenced. “As we’ve seen with e-tolling, they don't like ring-fencing taxes. Some taxes are ring-fenced, like fuel, TV licences, or the Road Accident Fund. But this Carbon Tax will not be ring-fenced – it will go into general state coffers. “A lot of money in the general state coffers goes to salaries. It doesn't go to help the environment; it's not going to build us better roads to get rid of traffic jams so that we can have fewer emissions in the transport sector. It's not going to fix robots. If we want the low hanging fruit, in our sector, we have to think differently. We should do certain things like implementing a green wave. (A green wave occurs when a series of traffic lights – usually three or more – are coordinated to allow continuous traffic flow over several intersections in one main direction.) In the 1940s, an engineer determined that, if you time traffic lights, the flow of traffic is improved. The

concept progressed from there – today there are programmes that you can buy off the shelf. “We could do it properly – the whole of Joburg. We could coordinate buses, trains, trams, anything we wanted, and get an optical flow of traffic. In many cases, that system reduces carbon emissions in transport by more than 20%. You’d spend far less implementing that and have a big impact on the transport side of carbon emissions.” The industry should also brace itself for slow price increases from the refineries, which are huge users of electricity. A lot of the carbon tax imposed on coal-fired electricity generation will be transferred to the transport sector in the form of increased fuel prices.“We sit in a country where regulations don't always make sense. The first thing we should do is carry out regulatory impact assessments of any regulation that comes out of any government department. If you're going to take the trucks off the roads for six hours each day, imagine the additional carbon you'd produce from having more trucks – and more congestion – on the roads? “If you look at the whole picture, we are not thinking everything through. Everything is compartmentalised in South Africa. In a cost-conscious environment, where we're going to be under severe pressure, adding taxes to the whole mix might kill the goose that lays the golden egg,” he concludes.

“If we want the low hanging fruit, in our sector, we have to think differently.”

Mike Schussler is a well-known economist, author, and keynote speaker.

TWA | Sept/Oct 2015

TWA TWA || July/Aug Mar/Apr 2015

FREIGHT FORWARDING

Barriers to entry W

Dave Logan is the CEO of the South African Association of Freight Forwarders.

HILE FREIGHT FORWARDING may seem fairly easy, it’s really a complex industry. One doesn't just launch a freight forwarding business overnight. For a start, you have to register with customs if you're going to do Customs Broking, which is a natural extension of freight forwarding; you need to sort out deferments with SARS; and you've got to put up guarantees, which, in some instances, can equate to 100% of the guarantees on VAT. General compliance with legislation is becoming increasingly difficult and there are a lot more government agencies performing cargo inspections. When the NRCS was a part of SABS, we didn't experience the container stops that we do now; imports only had to be compliant with SABS standards. The industry understands why the compliance is necessary, but the issue is that it takes a certain amount of time and adds costs to the supply chain. The country’s logistics costs, as a percentage of its GDP, are already high – at around 12.5%. If you provide marine insurance, you need to be either a financial services provider registered with the Financial Services Board (FSB) or become a juristic representative of your insurance broker, who must also be registered with the FSB. If you fail to do this, you can't provide marine insurance directly. The South African Insurance Association raised this issue with one of our members and we were thinking of changing our standard trading conditions. If you're not registered with the FSB as a financial service provider or you're not acting as a juristic representative via your insurance broker’s registration with the FSB, you could be subject to a fine of R10 million, 10 years imprisonment, or both. If someone approaches you and asks that you do their shipments all you can say is: "Do you want marine insurance?” You can't give advice as you could be held liable

TWA | Sept/Oct 2015

Few start-up companies are entering the freight forwarding industry in South Africa. Dave Logan explains why. - you've got to get your broker to do that. You also have to be very specific about the way your contracts are worded. There are a number of pitfalls in that area. Some tenderers demand to know if a freight forwarder is a member of a national association. At SAAFF, we have a code of ethical conduct, to which members must adhere. It's a way to ensure a standard of service is provided. A topical issue at the moment is the impending Customs Control Act, designed to stamp out illegal trade – one reason why SARS is making use of high-tech container scanners at the points of entry. The new R38 million scanner at the Cape Town port will likely be followed by similar systems at Beit Bridge. It is a positive development, as illegal trade is a massive issue in South Africa – with the fiscus losing around R5 billion from illegal cigarettes last year alone. While the original Customs Act was promulgated in 1964, and has been amended over the years, the operative word in the new Act is control – that's what SARS wants more of. This explains why there are a lot of reporting requirements in the new Act, particularly when it comes to the movement of containers. The Act will impact everyone operating in the supply chain, so companies will need to adhere to the detailed reporting requirements being set out. It is a complex piece of legislation, which SARS has been writing for more than five years now. Being an electronic process, it will need to be adequately policed. Access into and out of the country for goods and people is also being made ever tougher through initiatives like the Border Management Agency (BMA). We’ve already got a number of agencies – Port Health, the National Regulator of Compulsory Specifications, the SAPS Border Police, and the Customs Border Control Unit, which might oneday form part of the BMA. There have also been some proposals on taxing exports but, if that comes in, it will do more damage than anything else.

SUPPLY CHAIN LOGISTICS

Lady leveraging Women need a collective voice, especially in the supply chain, logistics, and transport sectors, maintains Margaret Bango.

OMEN IN LOGISTICS and Transport (WiLAT) was founded in 2010 to encourage, empower, and support professional women in the logistics and transport industries. WiLAT SA, meanwhile, was formed in 2013, with the intention to become a catalyst for local female empowerment in the sector. We understood that we needed to introduce women to the industry and encourage, motivate, and support their growth. Ultimately, we believe this will create the leading professionals that the country so desperately needs. While empowering women has always been close to my heart, it was while listening to Aisha Ali-Ibrahim, global convener of WiLAT and chairperson of WiLAT Nigeria, speak during the Women Advancement Conference in 2013 that inspired me to create something similar in our country. My only condition was that the group would not be aligned to any minister or government department, in the interest of autonomy, which would allow us to create a proper vehicle to empower women.

Rough diamonds It was obvious that women needed to be trained and acquire practical working experience before they could be incorporated into the industry. That’s where we come in. We provide information and skills facilitation on a pro bono basis. We want women to know that they can be owners of companies in the sector and we make them aware of the opportunities that exist. Membership affiliation facilitates membership benefits, which are used to either organise or attend local and international conferences. A lot of the women we help have experience in running a business and they understand that doing so is a challenge. But, many of them are in a growth trap – getting by, but not excelling. We tell them they can do better, provided they’re properly informed and are in a position to make better decisions. We provide information and encourage them to diversify. Having signed a memorandum of collaboration with the women chamber of the National African Federated Chamber of Commerce and Industry, we are able to reach women nationally. It’s important that we have coordinators in each and every province. While the country has a very good Sector Education Training Authority, we believe we need a complementary programme – one that encourages entrepreneurship. We've got to come up with a system that complements what the government is doing. We cannot say, with certainty, that we will create a job or a position for women that are part of our group. Opportunities in the industry are hard to come by and

we really need the heavyweights in the industry to take a stand, mentor women, and create opportunities for them. We need our graduates to be incubated – possibly by receiving small contracts or subcontracts – to get practical work experience. Most companies we've approached are concerned with the amount of work experience these women have.

Walk the talk WiLAT SA is in talks with the Transport Education Training Authority and the Institute of Logistics and Supply Chain Management. Together, we’re developing a programme for newcomers to the industry, which provides a broad perspective, so that participants can decide in what area they’d like to specialise. Once their training is completed, proper enterprise development can start and they’ll be able to decide what mode of transport to pursue. We are trying to harness people's passion into viable businesses. Simultaneously, we’re trying to remove the assumption, by women, that this is an industry only for men. It’s an understandable assumption if you consider that only 1 out of every 100 companies in this field is run by women. That statistic will change. A lot of men in the transport industry started out as truck owner/drivers. Power-assisted steering and automatic transmissions are making truck driving more appealing to women. We tell women who are worried about the gender bias not to focus on the established industries, but rather to look at the upcoming ones. We encourage them to educate themselves by researching, reading, and attending events and conferences, where possible.

Margaret Bango is the chairperson and founder of Women in Logistics and Transport South Africa.

TWA | Sept/Oct 2015

SUPPLY CHAIN LOGISTICS

Building blocks The rejuvenation of the Chartered Institute of Logistics and Transport of South Africa (CILTSA) is well underway, writes Elvin Harris.

ILTSA, WHEN IT originally started, was one of

a handful of individuals working in the transport and logistics industry. It is not a chapter, but a branch of the Chartered Institute of Logistics and Transport (CILT) International, which is already over 100 years old. CILT started with the idea of creating a profes-

sional body that would make a difference and set new standards in logistics and transport training, education, and research. The institute formulated a set of programmes, which it mainly took to people working in the industry. Years down the line, CILTSA became an extension of that. Our association to CILT was forged through the trade links the UK has with Commonwealth nations. CILTSA is the South African branch (covering South Africa, Swaziland, PEA ADVERT( Print-Ready).pdf

TWA | Sept/Oct 2015

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Namibia, Botswana, and Lesotho), offering CILT’s tried and tested training programmes in transport and logistics. Recently, there has been a change to incorporate more elements of the supply chain beyond logistics. It is evolving as society and the industry evolve. However, the underpinnings remain in transport and training. Professionalism and scientific research in the field of transport have also been substantial parts and key objectives that the charter originally commenced with.

Branching out Our role in South Africa, as a local branch, is to take that quality training and make it available to the industry. It has become a sort of cradle-to-grave system that caters to school leavers, as well as to those already employed in

SUPPLY CHAIN LOGISTICS the industry. It can be taken to fellowship level. New training material and techniques are always made available, so as to keep it fresh. While CILTSA launched in 2003, it hasn’t done too well in recent years, in terms of corporate membership numbers. For some or other reason, we lost a bit of ground and other players in the space got ahead. So, we are at the point where we need to re-establish our position in the marketplace. The training offerings are still of a high quality and it’s a global system. The modules and courses are the same worldwide, so it is possible to be a practitioner anywhere around the world with that same qualification. There is definitely scope for CILTSA training programmes and we are now working to bring those products to market and deliver value to our members. One of the key issues is research and development, and subsequent information and knowledge sharing. We are looking at hosting a range of conferences and seminars, which will become cutting-edge information sharing platforms. We need to grow and get to the point where we can host quality, well-attended events with local and internationally renowned speakers. If you offer a quality service or a quality product of interest to your target market, it will be supported. Our job is to bring that quality and service back to our members. There is some training already taking place through SAPICS and a number of universities. In some respects, we will be competing with what’s already out there in the marketplace, but in other respects, we’re not necessarily competing because we look at the unique leg – namely transport – as our core. We have plans to add to the logistics and supply-chain spheres later on; more associated supply-chain elements will be added, should there be appetite for that. But, first, we want to host quality events with good speakers and relevant topics.

Leverage Starting slowly, on a small scale and prioritising quality, is key. CILTSA needs to leverage and tap into its vast international network of experts. It also has a role to play in Africa, as there are a number of CILT branches on the continent. In fact, the new president of CILT International, Paul Brooks, is very keen on regional cooperation between CILT territories (territories have 1 000+ members) and CILT branches. Our mission, in South Africa, is to work our way to becoming a territory, which will give us the chance to take a leadership role on the continent, with the support and cooperation of other branches in the region. But we won’t simply wait for that to happen (our numbers to increase to a 1000); as we host events and as things happen regionally and nationally, we will exploit every opportunity to collaborate and work with other branches on the continent. There are about 20 countries in Africa that have CILT branches. Every year, we have a CILT Africa Forum, which meets in alternating African countries (the 2015 event was held in Tanzania). This is the first time since 2003 that we have training providers that can offer our programmes. The industry had been very critical of the fact that we didn’t offer life-long learning and professional development programmes locally. But we can now go

to industry and say we’ve got globally recognised programmes on offer through partnership, with our select group of training providers. What many people don’t realise is that basis for what is in the bulk of the UJ curriculum on transport and logistics, for example, originates out of the CILTSA curriculum from years ago.

Baby steps The first year will be about putting the necessary building blocks in place: working with the right people, and getting the right ideas and agreements in place. Next year, or 18 months from now, these can be implemented. For us, it’s about quality over quantity. If we get things right with select service providers and institutions, graduates will enter the workforce and be competent enough to get the job done. As we do our research, we might identify more training providers that we’d like to get involved with and then we’ll engage with them. We’ll screen selected training providers and ensure they have the right infrastructure, the right expertise, and the right faculties. Actually, there’s a two-step validation process for vetting would-be training providers. We do the initial vetting and site Our role is to take that quality inspections, and conduct training and make it available interviews with the management team and so on. to the industry CILT International then performs a more thorough screening process. We’ll consider the years of operation, the level of experience of individual faculties, financial stability, and reputation, among other factors. We don’t have our own direct mechanism for making training available. We need others to deliver the training under licence and/or agreement. It’s possible that, over time, we’ll build up a faculty and offer it as CILTSA but, at this stage, we’d prefer to leverage capabilities that already exist in other institutions.

Carpe diem A few months ago, CILTSA board member John Maluleke, together with representatives from SASTALC, went to a students’ career-day event in Polokwane where he told students about the transport and logistics industries and the career paths available to them. We will attend more of these events to attract students. We realise that we need to talk to high schools and make sure that we reach the grade 10, 11, and 12 learners. We want to start in the critical hubs of the country – Gauteng and the inland provinces. At CILTSA, we’re calling it a rebuilding phase and are setting up the platforms and embedding certain things that need to be done now. This will set us up for the expected growth. We’re also keenly aware that we need to establish the right partnerships and ensure that we provide value to our existing members.

Elvin Harris is the president of the Chartered Institute of Logistics and Transport of South Africa.

TWA | Sept/Oct 2015

CORRIDORS

Taking initiative Depressed commodity prices mean bad news for transport corridors in Africa, explains Barbara Mommen.

ERTAIN

COMMODITIES have simply stopped moving, as if someone switched off the taps. There is a lot of spare capacity at the moment, which is a risk. How does a corridor

institution like ours mitigate that? We’re as much at the mercy of international minerals prices as anybody else. What we can do is create opportunities for information sharing – to understand better where markets are, and where they are likely to go. One of our key restrictions is not having an in-house research engine that can extrapolate data and look at possible trends. That is a very expensive tool, which speaks to our biggest challenge – resources – despite an enormous mandate. The Maputo Corridor Logistics Initiative’s (MCLI) focus is to facilitate engagement between the public and private sector to increase efficiencies, reduce costs, and improve the trading environment.

Data mining

Barbara Mommen is the CEO of the Maputo Corridor Logistics Initiative.

We can lobby and create awareness within the organisation’s that are responsible for the costs to point out how they are impacting on competitiveness. We can try and get studies done that will look at the long-term impact, should certain supply chains be lost. The key principles in logistics are reliability, predictability and efficiency – ensuring that your costs are not exorbitant. Five days or so before they implemented the charges at KM4, we were still not sure what they’d be. We knew they were going to be a flat rate, but we didn’t know what that rate would be. One of our key roles is to try and create more transparent communication among our stakeholders. People with less information become increasingly suspicious and we believe that having some information is better than having none. What’s key is that MCLI has credibility, because of its ability to bring stakeholders together. I do not know of another organisation that does this on the scale that we do, in terms of the region we serve. We get people from

TWA | Sept/Oct 2015

three country’s talking about the same things. There is enormous power in that, but it goes beyond just the credibility of the organisation – we need to be able to have something genuine to sell, like a corridor that functions efficiently.

Balancing act In order for a corridor to function efficiently, you’ve got to work together with partners. Because government doesn’t always understand our business principles, it doesn’t have the same level of urgency about things, nor do they have the same understanding. In the same breath, the private sector is often accused of not being compliant and trying to find every way possible to avoid being compliant. It’s a tightrope between what you know needs to be said and not antagonising the people you need to work with. In that sense, ours is a difficult, but critical role. We coordinate and integrate so that when, we’ve got a home affairs issue affecting the speed with which a truck driver crosses the border, we can deal with it in an integrated way. Our role is to inform, communicate, and facilitate, and many of the issues needing to be addressed begin with a discussion, in writing, with the relevant authorities. We’re strict about the cooperation aspect because we feel we’ve made more friends by taking that approach than being a lobby organisation that’s constantly on their case. We are starting to look at taking on projects that have corridor relevance around data collection, facilitating engagement, logistics, supply chain, and shipping and ports. We’ve pitched with European and African partners about the EU Horizon 20/20 project, which, if we do get it, will be fantastic for our data collection capacity and for delivering what the research and innovation project wants us to do. Our new strategy is to make sure that every aspect of what we do collects data of some type. We need to get a more sophisticated method in place and are moving in that direction.

Road Safety

CORRIDORS

be alert

Sharing the road responsibly The Maputo Development Corridor is designed to stimulate trade, through competent infrastructure and the opening up of South African markets to Mozambican producers.

RANS AFRICAN CONCESSIONS (TRAC), a found-

ing member of the Maputo Corridor Logistics Initiative, is responsible for 570 km of road between Solomon Mahlangu off-ramp in Tshwane, Gauteng, and Port Maputo in Mozambique. Both Johannesburg and Ekurhuleni join the corridor via the N12, which also connects to the N4 highway near eMalahleni. At the Mozambican border, the N4 becomes the EN4, which connects directly to Port Maputo.

For importers and exporters alike, the N4 is a fast, safe, and efficient road to PortÂ Maputo

TRAC has managed the N4 Toll Route since 1997, when it signed a 30-year concession contract with both governments, who were represented by their national roads agencies, Sanral and ANE. It was South Africaâ&#x20AC;&#x2122;s first toll road concession and is still the only one that operates across borders. Overloaded vehicles are a major challenge when it comes to keeping roads like the N4 safe. Overloading causes damage to the road surface, which affects the safety of other vehicles. To deal with the issue, nine Load Control Centres are positioned along the route; seven of which are in South Africa and two of which are in Mozambique. In addition, eleven vehicle lay-bys are operated on behalf of Sanral. TRACAssist, an emergency roadside support and accident response service, is available 24/7 to all road users. The TRACAssist team is manned by a 24-hour helpdesk based in Mbombela, which facilitates communication between the TRACAssist teams dispatched along the route. This includes emergency services, law enforcement authorities, road users, and other stakeholders. Maintenance teams, meanwhile, seal cracks, repair fences, and fill potholes. Additional duties include the upgrading of signage and road markings, grass cutting, and guard rail maintenance. TWA | Sept/Oct 2015

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Judge dredge

PORTS

Before the civil war in Mozambique, 40% of South Africa’s exports left the country via Maputo. Tristan Wiggill weighs up Port Maputo’s current attractiveness to South African companies.

T THE MOMENT, chrome and to a lesser

extent coal are the biggest export commodities leaving Port Maputo. Magnetite, chrome, and coal are being moved by rail and road, while general cargo remains the domain of road transporters.

Port Maputo is becoming an increasingly attractive SADC port for outbound cargo

The Grindrod car terminal is functioning quite effectively, despite great challenges. BMW, Nissan, and Toyota export vehicles from Maputo, while the terminal receives Mahindra’s, Renault’s, and Ford’s products. Terminal operator, Grindrod, performs a lot of transhipment of vehicles up and down the South African coast. Höegh Autoliners is an investor in the car terminal, which has created additional synergies. There’s a good mix between inward and outward cargo at the car terminal, which is contrary to the overall balance of trade between South Africa and Mozambique (still skewed heavily in South Africa’s favour). The different levels of economic activity make it quite difficult to balance the trade out. One would have to create an enabling environment in order to encourage more inward transit. Being a private sector concession, there is greater leeway to negotiate rates and services at the port. The port offers lots of benefits for exporters; its proximity to India and the Far East means you can cut between one and three days sailing time compared to Durban, depending on the shipping line. Strategically, the port is very well placed. Whether South African companies prefer Maputo or Durban depends on the commodity being shipped and its final destination. Financial viability is the big issue. Transporting by rail means higher margins, although Transnet’s freight rail rates on the Maputo Corridor are higher than Richards Bay and Durban. While a complex set of dynamics inform the tariffs paid, the private sector concession means that rates and services can be negotiated. CFM transports limited amounts of container cargo at the port, including some magnetite and minimal coal and chrome. The Matola coal terminal, because of the depressed coal price, has huge excess capacity at the moment. The three rail partners (TFR, CFM, and Swazi Railways) work very closely together at an operational level, but there’s a huge disconnect once you get past the Joint Operating Centre (JOC), as the stateowned enterprises do not always understand how business gets done. Processing has improved at the South Africa/Mozambique border, due to the Electronic Data Interchange (EDI) process that is working well with SARS. The single window has removed a whole range of paper

trails, so a single document containing information now gets fed to the departments that need it before manifests are cleared. Trucks are cleared in anywhere between 25 and 40 minutes, which, for an African border post, is very, very efficient. Turnaround time is what creates competitiveness and what drives costs down. Port Maputo’s costs are high, however, because of its capacity issues. The Maputo Port Development Company has had to invest enormously in dredging and they’ve got to recoup that investment. The success of the port is very much dependent on which commodities can work efficiently and cost effectively. While there is no blanket, the port is definitely focusing largely on bulk and vehicles at the moment. But, they’ve got to continuously dredge, which is expensive. Many clearing and forwarding agents say the choice between the Maputo and Durban ports comes down to rands and cents. There are benefits at Maputo such as the lack of congestion and its improving efficiency rating. The port’s investment in human capacity and port equipment is going to stand them in good stead. But those are turnarounds that take time.

TWA | Sept/Oct 2015

For sustainable energy.

RAIL

Short stop For Gauteng companies, access to international markets via Port Maputo is both shorter and technically easier than the South African alternatives. Tristan Wiggill finds out if distance is a big enough drawcard.

HILE THE SHORTER distance makes Maputo an attractive option to South African traders, the port is also of great strategic importance to Transnet Freight Rail (TFR), Swaziland Railways (SR), and Mozambique Railways & Ports (CFM), as it offers a relatively short distance to sea when compared to the South African ports of Richards Bay and Durban.

Joint effort

Goba-Maputo line SR uses this line, which is relatively good on both sides of the countries, allowing trains to run at speeds of up to 60 km/h. On the Swaziland side, the line was upgraded in 2004 from Matsapha all the way to Mlawula. Wooden sleepers were replaced with concrete and, so, 40 wagons can now be hauled with a vacuum train. The capacity for wagons on the line rises to 50 when using an airbraked train. Current idle capacity (unused slots) is a high 75%. This line can be used as a relief line for the Ressano Garcia line during train disruptions or congestions. It can also limit bottlenecks and idle times, while allowing cargo owners and manufacturers to move goods affordably via Swaziland, all the way to Maputo.

“Grander intermodal connectivity is critical for the railways.”

The Joint Operating Centre (JOC), made up of TFR, SR, CFM, and the Maputo Port Development Company, integrates and coordinates traffic flows into Maputo harbour and its terminals. It also coordinates traffic flows from Mozambique and international cargo from Swaziland and South Africa. The JOC’s management structure is made up of the four organisations’ CEOs, who make investment decisions in infrastructure, rolling stock, and human resource capacities. A tactical committee, made up of the operations managers of the four organisations, implements decisions taken by the executive committee. These decisions usually relate to volumes targeted, turnaround times of wagons, the availability of rolling stock, meeting customer requirements, targeted volumes, and meeting customer orders. The JOC Maputo Centre involves three main corridors, with traffic that has to be coordinated effectively: Ressano Garcia, Maputo to Goba, and Chicualacuala to Maputo. All three converge at Machava station, where bottlenecks have to be avoided.

Future prospects SR is looking at an opportunity to increase its traffic to the Maputo port. TFR, in South Africa, and the city of Maputo stand to benefit from the proposed new 146 km North West line (Swaziland Rail Link), which is anticipated to be fully operational in 2021. It will link Swaziland with Gauteng, Mpumalanga, Richards Bay, and Maputo. Not only will it provide more traffic to Maputo, it will shorten distances and reduce costs. There are opportunities to create express trains that carry high-valued goods, and regional distribution hubs could be developed; however, a greater harmonisation of railway systems is needed.

CFM has made a series of investments aimed at increasing trade volumes

TWA | Sept/Oct 2015

RAIL

Mutual benefits

Nyameka Madikizela is the executive manager: International Business at Transnet.

HE MAPUTO CORRIDOR’S Joint Operating Centre (JOC) has been operational since May 2013 and houses representatives from Transnet, Caminhos de Ferro de Moçambique (CFM), the Maputo Port Development Corporation (MPDC), and Swaziland Railway (SR). The private sector is also involved, with Grindrod having an operator’s table. More private sector participation is expected as growth in the port’s terminals increases. These operators prioritise integrating the planning and execution of cargo train operations between South Africa, Mozambique, and Swaziland. Mozambique has taken advantage of its location, boosting regional trade and making it a credible route for South African exports. The operators, through the JOC, prioritise the solving of logistics bottlenecks in the flow of cargo. The idea is to make the route so competitive that exporters and importers view it as a viable, economical transport route. The JOC has already achieved significant efficiency gains, which include a massive reduction of 24% in dwell time in Komatipoort and an unprecedented 57% reduction at Port Maputo. Right now, we are averaging an operational cycle (turnaround time) of 65 to 70 hours from origin to destination and back to origin, and the network between the three countries

can handle 75 wagon trains – 70 trains are run each week. The JOC has managed to align and integrate investment plans, maintenance standards, safety procedures, operational philosophies, and skills development across the corridor. The outcome of these alignments has seen a level of standardisation in the operating procedures, maintenance work, and safety standards between the three countries. This includes the activation of an integrated train plan, which allows all operators to work together and adhere to a scheduled train across country, rail, and port facilities throughout the Maputo Corridor. A joint investment plan exists across three corridors, which has allowed the JOC to have one vision, informed by studies conducted by the JOC’s signatory operators and documented in a memorandum of agreement signed in 2012. The investment plan is used to discuss the joint rehabilitation work necessary for the expected growth in volumes. We are starting to see the steady growth stabilise and hope to see an upward trend in volumes. The rail network has sufficient capacity for the anticipated growth in volumes, and the investment plans will be constantly reviewed and updated as markets change. The port authority’s plans to invest in the depth of the draft for bigger vessels will be a game changer for the corridor.

TWA | Sept/Oct 2015

‘‘Efﬁciency Re-deﬁned”

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Tel +268 2404 2486

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www.swazirail.co.sz

LEGISLATION

Get your Act together The South African Revenue Service (SARS) is to replace the current Customs and Excise Act with the Customs Control Act, Customs Duty Act, and Excise Duty Act. Multinational law firm Norton Rose Fulbright explains.

OUTH AFRICA’S CURRENT customs legislation consists of a law that is over 50 years old. Since 1964, it has been added to and amended, but has now become a cumbersome and unwieldy instrument that is difficult for traders and fiscal authorities to use. The most significant development is that a new Customs Act and a Customs Control Act have been drafted, debated, and circulated for comment. The acts have been approved by Parliament but will probably only come into effect in 2016. The laws are designed to recognise the significant changes that have occurred in logistics in the last 30 years and, in particular, to recognise the rise in containerisation. The new laws will fight a rising tide of customs fraud, with much higher penalties, and include a refusal to allow the importing of goods to inland ports, unless full details are declared at the first place of entry. The monitoring and enforcement bodies consist of the International Trade Administration Commission (ITAC) and SARS. The major risk exposure present in trade compliance lies in the fact that existing customs legislation applies heavy penalties to a whole range of entities involved in import and export – including the importer, the owner, the freight forwarder, the clearing agent, and the transporter. If any one of those entities is involved in fraudulent activity, all of them can be punished by SARS for non-compliance with customs legislation. Fraud remains a problem, particularly on imports from China, and our firm has dealt with numerous cases where, although reputable global auditors have

produced quantity and quality certificates, the contents of the imported containers are not what was ordered and paid for. The only way to avoid fraud of this nature is to rely on established trading partners with whom an importer has a relationship and against whom recourse can be taken in the event of fraud. Customs compliance essentially needs two things. The first is having an education and training programme for staff that ensures all members of staff dealing with customs issues properly understand the obligations under the customs regulations and understand the nuances of the company’s trade. If this means employing outside consultants to run training programmes, it is money well worth investing. The second is ensuring a proper and strong relationship with the relevant SARS teams dealing with that sector of the economy. This will ensure that any minor infringements can be dealt with quickly, and any potential problems identified in advance and disposed of before they result in non-compliance.

“Rely on established trading partners with whom an importer has a relationship and against whom recourse can be taken.”

New laws being passed by government will take into account the rise in containerisation

TWA | Sept/Oct 2015

TRAINING

A world of difference

Internationally recognised transport and logistics qualifications will help put a lid on South Africa’s rising logistics costs, explains Charles Dey.

N SOUTH AFRICA, we’ve grappled with getting those courses launched, because the Chartered Institute of Logistics and Transport South Africa (CILTSA) did not have the capacity to offer these programmes, nor was there a critical mass for training providers to make this a viable opportunity. Recently, however, we have partnered with people who are highly competent and accredited, nationally and internationally, to provide courses in the supply chain management space. At the beginning of the year, CILTSA decided to link up with a small number of high-quality organisations that are interested in becoming accredited as education and training providers and allowing them to deliver these courses in terms of the CILT criteria. We’ve successfully accredited Commerce Edge and are currently in the process of accrediting three other training providers to get these programmes launched.

Barriers A possible barrier to acceptance of the courses is the fact that they are not necessarily funded by the transport SETA, because they are related to an international qualification and not a locally registered one. We are looking into the possibility of aligning the international qualifications to locally registered qualifications, and we’ll

TWA | Sept/Oct 2015

hopefully do this with the cooperation of those providers who partner with us to provide these courses. One of the more exciting developments, in this regard, is the fact that there is an institute of higher learning – a private university – which is busy incorporating the CILT curriculum into its Bachelor of Management Science degree, using a CILT-accredited provider as its ‘logistics and transport faculty’. By taking all the courses in this degree, as well as the CILT element of it, you get a bachelor’s degree and, by writing a board exam, international professional recognition. We need to realise that South Africa spends somewhere between 11% and 12% of its GDP on logistics and transport. If we could reduce that by even a few per cent, through increased competence on behalf of the practitioners, we would be saving this country billions and making it a lot more competitive in international markets. The potential for improving the operational efficiency of the entire Southern African transport infrastructure is significant, if we implement as much CILT-directed training in association with other CILT branches in the region and in the rest of Africa. In my experience, a CILT qualification teaches you to think strategically and analytically – a key deliverable of that course, which is also occupationally directed. In

TRAINING other words, it’s not academic. You can tell that the course content has been written by senior practitioners – people who have been there and done that – and not people with a more academic approach to the subject; it’s very practical. Until now, it’s been very much an academic approach, with a number of universities offering very good courses on logistics and transport, but the people who emerge from them are not necessarily able to apply what they’ve learnt at the university in day-to-day decision-making and operations. It’s also been more a question of ’monkey see, monkey do‘, than a question of formal training. While CILT training is not better than anything else, per se, it addresses a specific niche in the supply chain. If you take, for instance, the Chartered Institute of Procurement and Supply (CIPS), it will address procurement, purchasing, sourcing, and similar aspects extremely well but CIPS does not address logistics and transport to sufficient depths for a logistics and transport practitioner. The CILT courses are recognised and applied by a number of different countries. All CILT content has benefited from the input of many different experiences throughout the world, with CILT branches communicating with one another and exchanging ideas over a wide field. CILT is, in a sense, unique, in that other institutions tend to have their examinations set by the mother body and marked and assessed by them; whereas under the CILT model, the local providers are the setters of the assessments in that country. For example, Commerce Edge, which has been accredited by CILT, will set exams in South Africa for South African conditions. The standard is maintained because those are moderated by the mother body, but they are applicable more to South African conditions than, perhaps, an international examination would be. There will be a

number of providers to choose from in the near future, which will enable learners in different areas to access the training. While there is no doubt in my mind that the competitiveness of the industry – the way it is managed – will be improved through the training, I wouldn’t know whether having the training will necessarily create a job for anyone.

Grading A certificate, diploma, and advanced diploma are offered and pitched at roughly South African NQF level 5 to 7 candidates – the equivalent of a university degree. The entry requirement is a matric certificate with maths and languages. Geography would be an advantage, but is not essential. The course could be completed in three years, but I would imagine that someone in a working environment would probably complete it in four to five years. Courses are usually a combination of e-learning and contact/content training (blended learning). The advanced diploma consists of a research assignment. Many of the assessments are work-based; in other words, it’s a question of producing the work – the evidence that you’ve done the work in the workplace – rather than theoretical exams based on your knowledge of the material. That is a fairly universal trend in all training – to make it more practical. In South Africa, currently, 85% of people who go to university won’t get a job, whereas 85% of people who complete learnerships, which are like apprenticeships, will get a job. The industry today requires that more decisions be made at lower levels – often out of the competence scope of those employed. CILT South Africa has a major role to play in educating industry bodies about structured pathways.

“The potential for improving the operation of the entire Southern African transport infrastructure is significant.”

Charles Dey is an international supply chain and logistics management training consultant.

TWA | Sept/Oct 2015

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WAREHOUSING

Don’t be upstaged Warehouses need sufficient staging that matches their receiving and dispatching requirements, as well as the picking system involved, says Martin Bailey.

UT SIMPLY, IF you can pick faster, you’ll

need less staging. Putting in automation may not necessarily be the answer. You don't want to end up with wonderful technology, but not have enough staging. So, how do you solve the problem of insufficient staging? One way is to make sure there is always a truck parked in your dispatch door. You drop your trailer and pre-load the trucks.

There are operations with no staging at all. Stock is picked from rolltainers and placed straight into the back of the trucks – usually at night – and it all works like a dream. Anything is possible, if you have your act together. There are examples where 10 or so trucks park, get washed out, and at six o'clock in the evening they start picking. The shift arrives and staff pick in reverse drop sequence by truck. They take the 10 trucks away and park another 10 and pick into those, loading about 40 trucks in total. They close the doors and then, during the day, the same doors are used for receiving. The other option is to direct load. At the Walmart warehouse I went to, they have one door per store and they throw stuff straight into the back of the trucks. Trucks are parked overnight at the store and empty ones are brought back. At one of the doors, they’d put goods straight into the back of the truck without pallets. It’s a very storeunfriendly, warehouse-friendly process. A conveyor would load the back of a truck, meaning fewer human touches, which reduces human handling and error. Still, staging

can be a real mess. You can put in these highly automated systems for sortation and accuracy, but still rely on an outbound process where you have to manually audit every order. The error rate, then, is about three times as high as in the pick system. Many South African operations are a lot smaller than Walmart, particularly in some of the outlying regions. This means they usually have to have a mix of technologies and that can also create additional complexity.

Loading optimally with the route Loading needs to be linked to your staging and it’s important to integrate it with transport. It's no use picking if you don't integrate it with the trucks. Get the right truck, with the right unit load, and perform the right checking – or hopefully, no checking at all. Choose properly designed trucks that have been well thought out. For example, pickers should be able to walk inside the truck, from the front to the back, without having to get out when unloading. Glass windows can be installed behind the seats so that drivers can see where they're going more easily. The trucks you receive should really have proper access doors, too. Avoid barn-type doors, which require an unobstructed swing clearance to open and close. Instead, a roll-up door can be easily accessed from the side, which offers improved load access. In this case, shutters bail up above the door aperture, eliminating the need for internal roof mounted rails.

Martin Bailey is the chairman of Industrial Logistic Systems.

Trucks designed to be loaded and unloaded from the side are a major benefit

TWA | Sept/Oct 2015

AIR CARGO

Framework for African connectivity The International Air Transport Association (IATA) has called for governments, safety regulators, and industry to take action to drive aviation connectivity and infrastructure development in Africa for the economic and social development of the continent. Tony Tyler, director general and CEO, IATA

FRICA IS SET TO be one of the fastest-growing aviation regions over the next 20 years, with annual expansion averaging nearly 5%. This opens up incredible economic opportunities for Africa. But, aviation faces considerable challenges and, for its potential to be realised, correct policies must be developed. Smarter regulation, and a focus on delivering the safety and connectivity commitments of the African Union, will be crucial to establishing Africa as a global aviation powerhouse,” says Tony Tyler, IATA’s director general and CEO. Key challenges needing to be addressed include: Safety - Safety must always be our

first priority. Africa experienced zero jet hull losses in 2014, an excellent result. The all-aircraft accident rate, however, remains considerably higher than the global average. The Abuja Declaration commitments by African governments must be followed up with action to increase compliance with International Civil Aviation Organisation

(ICAO) standards. IATA is moving forward with assistance for airlines that are eligible for the IATA Operational Safety Audit (IOSA). For airlines ineligible for IOSA, a new IATA Standard Safety Assessment (ISSA) has been developed. Smarter Regulation - African nations have an opportunity to enact smarter regulation to enable better aviation connectivity. Implementation of the Yamoussoukro Decision will open up air routes within the continent and provide opportunities for more than 5 million additional passengers a year. Those African governments yet to ratify the Montreal Convention 99 and Montreal Protocol 14 treaties, on global standard airline liability and the treatment of unruly passengers, respectively, should do so without delay. Infrastructure - The provision of appropriate infrastruc-

ture, offering the right capacity at the right price, is essential for the growth of sustainable air services across Africa. ICAO has very clear guidelines on infrastructure funding and Africa has an opportunity to be a leader in this field by developing its infrastructure in close consultation with the industry. Environment - The industry is committed to meeting its

carbon emissions targets. In particular, the goal of carbonneutral growth from 2020 is of utmost priority. The negotiations for a global market-based measure to tackle carbon emissions from aircraft are entering a crucial phase, ahead of the 2016 ICAO Assembly. It is vital that African governments support a workable solution, in order for a measure to be in place in time for the industry’s 2020 goal of carbonneutral growth.

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