Transport World Africa May/June 2013 by 3S Media

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Intraregional supply chain solutions from producer to consumer

ROAD

Africa Road Transport Forum feedback

RAIL

Intermodal transport has big benefits

FUSO CANTER

AIR

Africa grows as markets weaken

Celebrating 50 years of reliable service

IN THE HOT SEAT

Imperial Logisticsâ&#x20AC;&#x2122; Cobus Rossouw How integrated is your supply chain? P6 ISSN 1684-7946 ISSN May/Jun 2013 Vol.Mar/Apr 11 No. 2013 3 / R40.00 incl. VAT 1684-7946 Vol. 11 No. 2 / R40.00 incl. VAT

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Intraregional supply chain solutions from producer to consumer onsumee r

COVER STORY TOR RY Fuso Canter anter celebrates 50 years ars of reliable service rvice

INSIDE

P4 P 4

THIS ISSUE E REGULARS

Efficient transport policies for Africa

2 3 4 10

Editor’s word – Common ground FESARTA – Barney’s comment Cover story – Fuso Canter Regional news

Imperial Logistics’ Cobus Rossouw on an integrated supply chain system

IN THE

HOT P6 SEAT

FEATURE

SUPPLY CHAIN LOGISTICS Curbing fuel theft: trends and technology Ensuring your assets are adequately insured Why Transnet Freight Rail is the future Intermodal transport has big benefits Unleashing trade into Africa

ACSA wins airport cargo excellence award

Cashless travel through Africa Leveraging technology

COMMERCIAL VEHICLES 14 16 17 18

MBSA – In-house financing: the advantages MAN trucks carry chrome Hino – Trucking is in the blood Africa Road Transport Forum

Africa discusses pertinent transport issues

22 24

Trading without borders

26 34 38 40 44 48 49 50

AIR NEWS 52

Africa grows

14 16

AFRICA

ROAD TRANSPORT FORUM

2 0 1 3

Solutions for intrare gional trade

TWA | May/Jun 2013

ED’S WORD

Common ground T

HE REGIONAL Economic Communities Transport Coordination Committee meeting and Road Transport Forum brought key stakeholders together from across Africa to discuss pertinent issues affecting the road transport sector throughout our continent. Interesting to note was that the issues and problems transporters have are common throughout Africa – from slow border crossings to illegal roadblocks where drivers are expected to pay ‘bribes’ to officials across the various corridor routes. A concerted effort is being made to alleviate these non-tariff barriers affecting African transporters. One of the discussion points at the forum, which will be taken up at political levels, is to try and eradicate them once and for all. I wish FESARTA well in its endeavours of tackling this issue. In this issue we look at the Fuso Canter, which is celebrating 50 years of reliable motoring; we also look at the sterling work the Sub-Saharan Africa Transport Policy Programme (SSATP) is doing in Africa under the auspices of the World Bank to improve the transport infrastructure on the continent. In addition, I speak to companies who advise on saving fuel and also discuss insurance – especially for transporters moving across our borders. On the intermodal front, we discuss how road and rail can complement one another and we also look at how to unleash trade throughout Africa. As always, a varied read – enjoy!

Financial manager Andrew Lobban Administrator Tonya Hebenton Printers United Litho JHB • t +27 (0)11 402 0571 Publisher Elizabeth Shorten Editor Simon Foulds • simon@3smedia.co.za Head of design Frédérick Danton Senior designer Hayley Mendelow Designer Kirsty Galloway Contributors Barney Curtis, Dinesh Kumar Chief sub-editor Claire Nozaïc Sub-editor Patience Gumbo Production manager Antois-Leigh Botma Production coordinator Jacqueline Modise Distribution manager Nomsa Masina Distribution coordinator Asha Pursotham

TWA | May/Jun 2013

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ISSN 1684-7946 © Copyright. All rights reserved. All articles herein Transport World Africa are copyrightprotected and may not be reproduced either in whole or in part without the prior written permission of the publisher. The views of contributors do not necessarily reflect those of the publishers.

FESARTA COMMENT

by Barney Curtis, chief executive officer, FESARTA

Positive feedback from the Road Transport Forum

he 2013 Africa Road Transport Forum has come and gone, and from the responses of several delegates, it was a success. We believe this was mainly because we focused on solving only a small number of critical issues along our corridors – 15 to be exact. Even with only 15, spread over two days, the time available to address each one was very limited. As you read this edition of Transport World Africa, I am hoping that the outcomes from the forum will already be integrated into FESARTA’s database on nontariff barriers, and we will be drawing up an action plan to implement them. TradeMark SA (TMSA) has agreed to work with FESARTA to ensure maximum benefit is obtained from the forum outcomes, with Vonesai Hove from TMSA leading this process. TMSA has always been a strong supporter of FESARTA’s

Another factor contributing to the success of the forum was the support from the SubSaharan African Transport Policy Program efforts to solve problems along the corridors in East and Southern Africa. Its guidance and recommendations after the 2012 Truckers’ Forum went some way to creating the structure of the 2013 Forum. Another factor contributing to the success of the forum was the support from the Sub-Saharan African Transport Policy Program (SSATP). We arranged with the programme manager, JeanNoel Guillossou, and the regional integration leader, Olivier Hartmann, that SSATP’s Regional Economic Communities Transport Coordination Committee (RECTCC) meeting be held back-to-back with the forum, on the two days preceding the forum. It meant that most of the REC-TCC delegates would stay an extra two nights and attend the forum. This provided some good high-level input to the forum. We have had two positive offers for the way forward, viz: • SSATP has offered to again hold its REC-TCC meeting back-to-back with the forum • the African Development Bank (ADB) would like to

partner with FESARTA and 3S Media and support the 2014 event. These two offers show that the forum is already gaining significant credibility among major role players in African transport circles. Already, FESARTA and 3S Media are putting their heads together to make k the 2014 Forum more attractive to all road transport stakeholders in Africa.

Solutions for intrare gional trade

FEEDBACK FROM DELEGATES

FESARTA AGM Following on from the forum, FESARTA held its 2013 AGM, which was attended by several National Road Transport Association members from as far afield as Rwanda and Burundi. This meant that there was good input to the various topics under discussion. The new chairman for 2013/14 is Gavin Kelly, technical and operations manager at the South African Road Freight Association. The vice chairman is Brian Shone, chairman of Fedhaul, Zambia. I would like to thank the outgoing chairman, Paul Maiyo, chairman of the Kenya Transport Association, for his keen support and wisdom during his tenure. We are looking forward to a busy and successful 2013/14 year!

“The forum was certainly worthwhile. Well done. From the forum I realise that there is need for better synergies between FESARTA and FCFASA as we go forward.” Joseph Musariri, FCFASA “Thank you for inviting me to be part of the forum. You probably spent most of your time listening to and having to deal with perpetual negativity from cross-border transporters. I had two days of very constructive, directed and structural debate. It was conducted with the inclusion of pertinent and prominent role players who are pro-active in assisting with issues of cross-border transport. I would like to congratulate you on implementing and conducting an informative forum. It is pleasing to be part of a debate where all role players clearly have a common objective, that being the ease of flow of trade. Once again, thank you and well done to you and all your staff and other affiliated members.”Rob van der Westhuizen, Connected Carriers

Gavin Kelly, the new chairman of FESARTA, and Brian Shore, vice chairman

TWA | May/Jun 2013

COVER STORY FUSO CANTER

Celebrating 50 years 1978

1963

1968

Fuso Canter celebrates its 50th anniversary this year. The Canter is renowned worldwide as a reliable workhorse within the short-haul distribution market, and customers can expect the eighth generation model to be available in South Africa from February 2014.

ivisional manager, Freightliner, Western Star and Fuso sales and marketing, Godfrey Hani, says the eighth generation variant has been available in other markets since its official launch in 2010 hence the vehicles are well tested under different conditions, and it’s now time to bring them to South Africa. “Up until now we have not had a very urgent need to introduce the new model because of the popularity and reliability of the current variant in the country. Most of our customers require a rugged basic vehicle that is highly reliable and gets the job done with no fuss.” What sets the next generation Fuso apart from the current models, aside from the enhanced performance, driver comfort, cosmetic interior and exterior changes, is the automatic transmission drive train, which will be available for the first time in this range of vehicles. Hani explains: “The next generation will meet all the requirements the customer wants, from improved comfort levels, extended service interval levels, a new engine and, of course, the Duonic automatic gearbox with a double clutch transmission. The vehicle has a complete new look and feel about it, but still has the reliabilGodfrey Hani, divisional manager, ity factors our customers expect Freightliner, Western Star and Fuso from the Fuso.” sales and marketing

“Most of our customers require a rugged basic vehicle that is highly reliable and gets the job done with no fuss.”

TWA | May/Jun 2013

“Last year we took customers to Japan to test the new vehicles and they have been raving about it ever since.” The new generation Fuso will also provide the market place with 3.5 and 8.5 t GVM vehicles for the first time, enabling the manufacturer to expand into new short-haul markets. “We intend playing a bigger role within the South African delivery market and the new vehicles will allow us to cater for these markets. We are optimistic about the future because we have the right people, the right dealerships, the right technology and the highly reliable vehicles with a rich history spanning 50 years. “Our dealers sell vehicles on skill and technical knowhow. When selling a vehicle to a customer we need to know the exact application it will be used for so we can advise them on the best specified vehicle they need for a cost-effective solution. This enables the customer to obtain the best operating costs from their vehicle, ensuring a satisfied customer with a cost-effective reliable vehicle.” The Fuso Canter is also available in a hybrid configuration as well, but the next generation Fuso hybrid will only be launched in late 2014. “We will have a preview of the New Canter LIFT during the Johannesburg International Motor Show in October. The new diesel variant will be on our stand at this show in the build-up to its launch in February 2014.” The new Fuso Canter Hybrid won car of the year in Japan in 2013. “We are optimistic about the future as we strive for another 50 years of reliable service to the South African short-haul sector.”

COVER STORY

of reliable service 1987

1985 1993

2005

CANTER HISTORY 1963 T720 is launched 1968 T90 is launched 1978 Canter gets wide cab and 3 t models are added to line-up

1985 The vehicle undergoes full model change 1987 1.5 t truck is named Guts Canter FE and launched in North America 1993 New Canter II, III are launched 2005

The Canter TD

To come

The Canter Euro5 Duonic

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TWA | May/Jun 2013

HOT SEAT IMPERIAL LOGISTICS

How integrated is your supply chain?

Over the past decade, integrated supply chain management has been recognised as an essential driver for business success and increased competitive advantage. But are South African organisations doing more than paying lip service to adopting the best practices required for successful supply chain integration?

mperial Logistics’ chief integration officer, Cobus Rossouw, reports that a recent investigation into the current status of integrated supply chain management (ISCM) within South African organisations yielded some positive findings, but also highlighted areas where South African firms are falling short. The research was based on surveys conducted with 31 South African organisations operating within the retail and manufacturing sector.

Aligned for success Among the study’s key findings was the encouraging confirmation that South African organisations are aligning their supply chain strategies with the broader organisation strategy. Rossouw elaborates: “Almost 80% of the survey’s participants indicated that they mostly or always fully implement this best practice strategy. Retail organisations scored particularly high in this area, indicating this sector’s success in aligning their strategies.” Other good news coming out of the study is the finding that South African companies recognise the importance of being customer focused – and this is Cobus Rossouw, chief integration extending to their supply chains. officer, Imperial Logistics

“Almost 80% of the survey’s participants indicated that they mostly or always fully implement this best practice strategy.”

TWA | May/Jun 2013

HOT SEAT

“The investigation revealed that South African organisations across all sectors are designing and managing their supply chains to be customer focused – but there is a large variation in the implementation and success thereof. Customer focus is an essential driver for a successful supply chain and this is a positive indicator of supply chain best practices within South African organisations.”

A-plus for planning Planning, forecasting and replenishment strategies emerged as the backbone of South African supply chains.

African organisations are really impairing their supply chain capabilities.” Rossouw says that the second area of concern is supply chain collaboration, with the study revealing that South African organisations have yet to realise the benefits of collaborating with supply chain partners. It was found that the best practice strategy of aligned incentives ranked just 41st overall, and “never or sometimes” was how 46% of the participating organisations rated their collaboration with supply chain partners. He explains that aligned incentives and aligned roles are best practice strategies that

There is a gap between the knowledge of supply chain management and the successful implementation of supply chain collaboration strategies The investigation revealed that South African organisations place great importance on the implementation and successful management of supply chain coordination control methods in terms of planning, forecasting and replenishment. Top marks in this area go to the South African manufacturing sector, however, since role players in this sector were found to be making the most effective use of supply chain coordination control methods, Rossouw notes.

Mind the gap Rossouw notes that – according to the study – there are two areas in which South African organisations are being most hampered by the gap between their current ISCM status and prescribed best practices. The first is in information technology, where supply chains are being impaired by the lack of implementation of information best practices. “As a strategy, information best practices scored the lowest overall within South African organisations, which reveals that they are not generally held in high regard. Since many of the key frameworks available for ISCM rely heavily on the use of information best practices to monitor and successfully integrate a supply chain, South

work together within a successful supply chain management strategy, yet it was found that both strategies ranked in the lower quartiles of the study. “This indicates that there is a gap between the knowledge of supply chain management and the successful implementation of supply chain collaboration strategies within South African organisations.” Rossouw believes that many South African organisations remain groupings of functional excellence and have difficulty in aligning processes across the business system. “Change management is required to integrate the supply chain across all functions within organisations and between partner organisations in the value chain. Supply chain integration means that knowledge and experience can be applied beyond the field of supply chain management; it can be leveraged into the world of transforming entire organisations. This creates an opportunity for supply chain professionals to broaden their aspirations to fundamentally reposition the business environment in which they participate,” he concludes. Hear Cobus Rossouw discuss this topic further at the SAPICS annual conference. Visit www.sapics.org for more information.

TWA | May/Jun 2013

FEATURE ACSA

ACSA wins airport cargo OR Tambo International Airport, the busiest airport in Africa, processes almost 19 million passengers per annum â&#x20AC;&#x201C; well within the top 100 airports in the world by total passengers. Major expansion projects have increased the annual passenger handling capacity from 6.5 million in 1993 to 28 million.

he airport currently services 88 destinations with an average of 55 airlines. Twenty-six of these destinations account for over 80% of departing passenger traffic. OR Tambo was also named one of the top 30 airports at the 2013 Skytrax World Airport Awards. The awards are based on 12.1 million questionnaires completed by 108 different nationalities of airline customers Tebogo Mekgoe (left), during the nine-month survey period in 2012 OR Tambo International Airport general manager, and 2013, covering more than 395 airports receiving the 2013 worldwide. This established industry survey is African Airport of the completely independent and evaluates traveller Year Award for Airport Cargo Excellence from experiences across 39 different airport service Ram Menen, divisional and product key performance indicators â&#x20AC;&#x201C; senior vice president from check-in, arrivals, transfers and shopping Emirates Airline

TWA | May/Jun 2013

FEATURE

to security, immigration and departure at the gate. Airports Company South Africa’s (ACSA) OR Tambo International Airport was also recently presented with the 2013 African Airport of the Year Award for Airport Cargo Excellence. The award was attained following a STAT Trade Times online survey conducted globally over a month-long process by varied air cargo industry players, totalling 42 000 voting readers, and presented during the 2013 Air Cargo Africa exhibition. STAT Trade Times, an integrated international transport media entity specialising in the air cargo industry, has been organising Air Cargo Africa exhibitions and conferences around the world since 1986. The 2013 Air Cargo Africa was held at Emperors Palace in Ekurhuleni from 20 to 22 February 2013. On receiving the award, Tebogo Mekgoe, general manager of OR Tambo International Airport, said: “On behalf of the staff, partners and all role players who contribute daily to our operational efficiency at the cargo division, OR Tambo International Airport wishes to express gratitude to all who voted for us in the STAT Trade Times survey, leading to us receiving this distinguished accolade.” He added: “With a logistics platform that moves more

business. The ACSA strategy recognises the fact that every element of its operations – and every person, organisation and institution that touches ACSA and is touched by ACSA – plays a part in its success or failure. By drawing on the balanced scorecard methodology, and using this as a strategic implementation tool, ACSA has a strategy that is dynamic, adaptable, integrated and – most importantly – implementable. “An important development has been the introduction of a balanced scorecard management system. This multidimensional system enables us and our stakeholders to consider ACSA’s objectives, decisions and actions – and to assess our progress – in relation to four major determinants of business success: financial performance, customer satisfaction, business systems and human capital development. This approach enables ACSA to plan for a future filled with technological, global, economic and regulatory challenges. It enables us to use our assets, including brand, expertise and intellectual capital to the fullest,” he concluded. The cargo facilities at OR Tambo International Airport include a bonded warehouse, transit zone, domestic cargo only, free port/foreign trade zone, aircraft maintenance, mechanical handling, heated storage, a ir- c o n dit io n e d storage, refrigerated storage, deep freeze storage, mortuary, animal quarantine, fresh meat inspection, livestock handling, health officials, X-ray equipment, decompression chamber, security for valuables, fumigation equipment, dangerous goods, radioactive goods, very large/ heavy cargo, express/courier centre, freight agents’ building, refuelling, airline catering (air chefs) and aircraft maintenance.

excellence award than 317 000 tonnes of cargo in and out of all our airports, OR Tambo International Airport wishes to acknowledge the collaborative team effort by all ACSA airports in South Africa that have contributed to this proud achievement. Though we also emphasise that we have not even yet begun to scratch the surface in moving bulk air cargo across African regions, we appreciate that what distinguishes our productivity, making our performance special, are our superb levels of connectivity, accessibility and great location coupled with excellent air linkages supported by a world-class port network infrastructure in South Africa.” Mekgoe said that the business’ success as a commercial, world-class, globally competitive company is a model for successful privatisation. Airports Company South Africa’s strategy is to build an efficient and customer-focused business. It is through implementation of this strategy that ACSA focuses all its efforts, resources and new impetus on brand management to move closer to its vision of Tebogo Mekgoe, general manager, OR becoming a world-leading airport Tambo International Airport

“With a logistics platform that moves more than 317 000 tonnes of cargo in and out of all our airports, OR Tambo International Airport wishes to acknowledge the collaborative team effort by all ACSA airports.”

TWA | May/Jun 2013

REGIONAL NEWS BOTSWANA-NAMIBIA

Railway deal between Botswana and Namibia shelved A 100 BILLION Namibian dollar (R100 billion) railway deal agreement between Namibia and Botswana has been postponed until further notice. The railway line, to be known as the Trans-Kalahari Railway, will be about 1 500 km long, running from landlocked Botswana’s Mmamabula coalfield to the port of Walvis Bay. Johny Smith, business development executive for the Walvis Bay Corridor Group, says such a railway line would open up many business opportunities for Namibia. According to Smith, the project will be owned by the government and although it was only in the beginning phase, could take up to five years to complete. Source: The Namibian

MOZAMBIQUE

Port concession awarded

EAST AFRICA

EALA E ALA passes passes one-stop one-stop b border order llaw aw

THE WAY IS being paved for the One-Stop Border Posts Bill 2012 to become a regional law following the adoption of the bill by the East African Legislative Assembly (EALA). It now needs to be approved by the East African Community (EAC) Heads of State before it becomes a law in the region. The object of the bill, initiated by the EAC Council of Ministers, is to provide for the establishment of one-stop border posts in the region in order to facilitate trade through the efficient movement of goods and people within the EAC. Under the arrangement, partner states shall implement one-stop border processing arrangements by establishing and designating control zones at the respective border posts. The bill also seeks to extend partner states’ national laws relating to border control officers – to allow them to move freely within the controlled zones in the performance of their duties by simply using their appropriate identity and not having to produce their passports. The bill makes provision for the application of border control laws and provides for institutional arrangements in the coordination and monitoring of the one-stop border posts. Common border posts designated in the EAC as one-stop border posts include the Taveta-Holili border and the Namanga border between Kenya and Tanzania, Busia and Malaba borders between Kenya and Tanzania, the Kanyaru-Akanyaru border between Burundi and Rwanda, and Lungalunga-Horohoro border between Kenya and Tanzania. Source: TradeMark SA

EAST AFRICA

Crossing the Northern Corridor border

THE CONCESSION for the construction of the deep water port of Techobanine, in the Matutuíne district of the Maputo Province, has been awarded by the Mozambican government. The project will cost an estimated US$7 billion (R63.44 billion) and will be funded by the Mozambican and Botswanan governments. The contractor was not identified when the announcement was made. The project is to build a deep water port for large draught ships, to complement the port of Maputo, as well as to build a railway line linking Techobanine to Botswana, via Chicualacuala and Zimbabwe. The port complex will have the capacity to process 100 Mt of cargo per year and may be a strategic regional reserve for fuel as well as an ideal facility for exporting a variety of minerals from Botswana, South Africa and Zimbabwe, among others.

AS PART OF ITS mandate in creating more efficient transport infrastructures in Africa, the Sub-Saharan Africa Transport Program (SSATP) regularly publishes informative reports for transporters, helping them operate more efficiently within Africa. One such report recently published is the ‘Border crossing monitoring along the Northern Corridor’ by Mike Fitzmaurice and Olivier Hartmann. Increased coordination is the objective of the one-stop border post (OSBP) approach, which is gaining momentum in several regions of Africa. The value-add of the SSATP in the East Africa OSBP programme is its extensive experience in performance monitoring and surveys, and notably its methodology for border-crossing surveys.

Source: TradeMark SA

SSATPWP96-border-crossing.pdf

TWA | May/Jun 2013

The report can be obtained online: www4.worldbank.org/afr/ssatp/Resources/

REGIONAL NEWS SUB-SAHARA

Improving sub-Saharan Africa railway

THOUGH RAILWAYS have played a key role throughout history in sub-Saharan Africa, the past 50 years have seen road transport expand rapidly in the region due to the aggressive development of the automobile industry. As a result, by 1990 most of the sub-Saharan railways were in virtual bankruptcy. To address the crisis, many governments looked at concessions as the solution and currently 70% of rail transport activities in the region (excluding South Africa) are privately managed. Since 1996, the World Bank has invested over US$1 billion (R9.97 billion) in this sector through grants and loans to support the efforts of governments and private operators. The Sub-Saharan Africa Transport Program (SSATP) has published a 91-page report titled: ‘Framework for improving railway sector performance in SubSaharan Africa’, which is available free online at: www4.worldbank.org/afr/ ssatp/Resources/SSATPWP94-Railway-Performance-Sub-Saharan-Africa

SUB-SAHARA

BCOCC website – live! THE BORDER CONTROL Coordinating Committee (BCOCC) website – www.saborders.gov.za – went live on 1 April 2013. The BCOCC is an affiliated structure of the Justice, Crime Prevention and Security Cluster that was mandated in 2005 to strategically manage the South African border environment. It consists of a number of government institutions working together, namely National Intelligence; the departments of Home Affairs,

Transport, Public Works, Agriculture, Health and Defence; South African Police Service (SAPS) and SARS. What will you find on this site? The site provides information about all the neighbouring countries, the ports of entry and even travellers’ info. Make sure you keep a shortcut of this site on your desktop!

SOUTH AFRICA

Transnet best placed to operate SA ports SOUTH AFRICA’S state-owned transport company, Transnet SOC, has defended its monopoly of the country’s eight ports, saying it makes no sense for private operators to enter the market. Transnet owns and operates all eight commercial ports and 16 cargo terminals across South Africa, including the biggest container terminal

at Durban and Africa’s largest coal port at Richards Bay. Income from ports and terminals accounted for 42% of Transnet’s profit during its last financial year, amounting to R15.3 billion and accounting for a third of the company’s total sales. Source: Bloomberg

TWA | May/Jun 2013

REGIONAL NEWS SOUTH AFRICA

Award for 21-year Containers-inthe-Community initiative SHIPPING LINE SAFMARINE received the South African Maritime Industry’s ‘Commitment to CSI’ Award for its pioneering Containersin-the-Community programme, which uses decommissioned shipping containers for community development purposes. The award recognises the efforts of those within the maritime sector who reach beyond their own structures to uplift, empower and skill fellow South African citizens. Safmarine South Africa’s Patricia Simons says: “This award goes to the many customers, Safmarine staff and AP MollerMaersk Group companies who have contributed time, money and energy to support our community

SOUTH AFRICA

A greener transport fleet in SA CONTINUING ITS ‘greening’ efforts, Engen Petroleum is purchasing nine new trucks that run on 50 ppm cleaner automotive diesel oil. Jeeva Chetty, national operations manager at Engen, says: “This follows the company’s purchase in 2012 of two new trucks that comply with the latest European emission requirements (Euro 4 and 5).” “It is a significant step forward for Engen’s sustainability efforts and our commitment is to eventually have only Euro 4 and 5 vehicles across our transport fleet of 220 trucks.” Besides running cleaner fuel, the trucks also sport exhaust gas recirculation and particulate filter technology, which translates into fuel consumption savings. They are also equipped with safety features such as driver airbags and pre-tension seat belts. The additional ‘green’ vehicles’ will be purchased in accordance with the company’s fleet replacement programme and roll-out of automotive diesel oil of 50 ppm nationally. Chetty adds: “The Engen Transport Department has monitored the performance of our first two vehicles and, given their excellent efficiency and sustainability, we are set to roll-out the programme further. It is exciting to see the business evolving and matching the demands of the market and the environmental challenges we are faced with.”

projects in their own and very meaningful way. “Not only have these partnerships allowed Top (from left) Maritime Industry award winners Patricia Simons, Safmarine (Commitment to CSI Award); Chris Magagula, Wabona Group (Maritime Newcomer Award) and Hanlie Gouws, Media 24 (Maritime Media Award)

Safmarine to deliv-

Above Talente Ngema, winner of the Maritime Student of the Year award, presented by SAMSA CEO Tsietsi Mokhele

the difference’,

er on its promise of being the ‘people making but together we have been able to

positively impact the lives of many communities.” For the past two decades, Safmarine has assisted community-based organisations that have identified shipping containers as a quick, sustainable solution to their infrastructural needs, by providing over 8 000 shipping containers for projects ranging from job creation to crèches, adult education centres and schools. In addition to its container projects, Safmarine has also been a supporter, for the past 18 years, of the Lawhill Maritime Centre in Simon’s Town, a facility that provides maritime education and skills to young South Africans while they are still at school. Talente Ngema, who matriculated from Lawhill in 2012 with seven distinctions, received the award for Maritime Student of the Year at the awards function on Saturday, while Captain Okke Grapouw, a former Safmariner of 23 years, was recognised as the Maritime Maestro for his lifelong contribution to the South African shipping industry.

TWA | May/Jun 2013

SOUTH AFRICA

Responsible Care commitment THREE MORE TRANSPORT companies – Freightmax, RB & Son Transport KZN and U-Wing Oil – have become signatories of the Chemical and Allied Industries’ Association Responsible Care initiative, thereby committing to implement the guiding principles of this voluntary initiative of the chemical industry. Louise Lindeque, Responsible Care manager of the Chemical and Allied Industries’ Association, says: “The safety, health, environmental and quality performance of logistical service providers that transport chemicals on behalf of the chemical sector has to be of a high standard to ensure that our products are transported safely. Responsible Care has to be extended along the logistics chain and it is therefore important that logistical service providers such as Freightmax, RB & Son Transport KZN and U-Wing Oil adopt and implement the Responsible Care guiding principles and codes of practice as these will add value to the company’s existing health, safety and environmental management systems.” The Responsible Care initiative is practised in 57 countries. In South Africa there are 144 signatories, which include chemical manufacturers, transporters of dangerous goods, spill response companies and waste management companies. Responsible Care is designed to have a measurable impact on safety, health and environmental performance.

REGIONAL NEWS SOUTH AFRICA

Aerotropolis to be created

A PLAN HAS BEEN proposed for the OR Tambo International Airport to become a terminal city with air, rail and road networks, which would aid in economic development. It is also envisaged to include a commercial component, hotel, conferences, exhibitions and a residential component. “OR Tambo International Airport is the busiest airport in Africa and the perfect location for the continent’s first aerotropolis,” says Ismail Vadi, the Gauteng MEC for Roads and Transport. “Work on the development of this aerotropolis, centred at OR Tambo International Airport, seeks to leverage public and private sector investment at the airport and surrounding areas. In supporting industrial development in this precinct, approval has been granted for the creation of an industrial development zone in the area surrounding the airport,” he said.

SOUTH AFRICA

Total invests R140 million TOTAL SOUTH AFRICA has announced that it will be investing more than R140 million over the next two years in upgrading its blending plant and expanding the storage capacity of its fuel depot, both located at Durban’s Island View Terminal (IVT) facility. The company’s decision to commit to this two-prong investment comes shortly after it signed a new 15-year lease with the Transnet National Port Authority. The company has had a presence at IVT since 1956, just two years after it started its operations in South Africa. Importantly, the supply of products from Total South Africa’s blending plant and fuel storage depot will not be interrupted while the upgrade and expansion takes place during 2013 and 2014. Neither of the facilities will be shut down and lubricant stock will be built up at a separate distribution facility outside of Durban to ensure that there are no product shortages. Christian des Closières, MD and CEO of Total South Africa, who is also executive vice president of Total Southern Africa and the current chairman of the South African Petroleum Industry Association (SAPIA), says: “We see this as a major vote of confidence in South Africa as well as in other countries in Southern Africa as some of the additional lubricants we will be blending will be exported to South African Development Community (SADC) countries, which we see as a growth market for our lubricants. “Our roots in South Africa go back to the Christian des Closières, mid-1950s and we are committed to growMD and CEO of Total ing our business in South Africa and SouthSouth Africa (left) and ern Africa through sustainably growing our Ndu Ndlovu, national key accounts manager infrastructure and distribution channels in – Liquid Bulk, National the fuel and lubricants markets.”

Jack van der Merwe, who successfully oversaw the development of the Gautrain project, has been appointed by Premier Nomvula Mokonyane to lead the development of the aerotropolis. Vadi said the City Deep/Kazerne Terminals and the planned TamboSprings Freight and Logistics Hub were to be the focal points for the movement of goods for the export market. He said Phase 1 of the City Deep/Kazerne Terminal expansion and roads upgrade was under way at the continent’s largest and busiest inland container terminal. “It involves the redesign and upgrading of the roads network in and around the City Deep Terminal and provides for better flow of freight traffic and linkages with the national highways,” he said, adding that the cost of the roadworks would amount to R122 million. Transnet has completed the first phase in the actual improvements of the terminal; it will be investing R900 million in upgrading the terminal. Vadi said detailed road design work, including feasibility studies and the development of a master plan, are under way for the Tambo-Springs Inland Port. He said the province will be making major investments in road infrastructure in the coming financial year and these include reconstruction and upgrading of the R55 (Voortreker Road) to a dual carriageway road between Olievenhoutbosch and Pretoria West, rehabilitation of the remaining section between Main Road and Maunde Street in Atteridgeville, reconstruction and upgrading of William Nicol Drive (K46) between Fourways and Diepsloot, as well as reconstruction and improvement of the remaining section of the Old Pretoria to Cullinan roads between the Chris Hani Flats and Cullinan, among others.

The upgrade to the blending facility, which will cost around R50 million, will focus on modernising filling lines, an on-site laboratory, and improving health and safety features and quality control measures. The expansion of the fuel storage depot, which will cost around R90 million, will lead to 26% of all fuel marketed by Total South Africa being stored on-site, compared to the current level of 17%. As a result of this expansion, there will be better integration into national infrastructure, such as the New Multi-Product Pipeline, and capacity for future growth will be catered for and enabled. Safety improvements will also be made. Significantly, the signing of a new lease with the Transnet National Port Authority plays a critical role in Total South Africa’s decision to invest heavily in its lubricant blending and fuel storage facilities.

Ports Authority

TWA | May/Jun 2013

COMMERCIAL VEHICLES MERCEDES-BENZ

In-house financing What are the advantages if fleet owners purchase their vehicles through an original equipment manufacturer’s (OEM) own finance house? Simon Foulds speaks to Mike Honiball, sales director at Mercedes-Benz Financial Services (MBFS), to find out.

HAT ARE the advantages of operators financing their trucks through the MBFS as opposed to other finance houses?

MH MBFS offers a wide variety of financial products with innovative options, such as seasonaland skip payments, to suit our customers’ revenue stream. These financial products include innovative leasing options, some potentially qualifying as offbalance sheet or residual values to keep the customer’s monthly cash outlay manageable. In addition, we ensure peace of mind to the customer with our extensive insurance offerings.

How does having in-house financing create an advantage for MBSA within the marketplace? The in-house finance company is part of the Mercedes-Benz value chain. Our staff has extensive knowledge of the transport industry and understands the needs of the customers. Our close-knit relationship with MBSA provides our customers with a one-stop shopping experience. We give the OEM finance departments a platform to talk to the industry.

How important is it for MBSA to offer in-house

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– the advantages finance? In-house financing is part of the value offering to our customers and is centrally controlled. The OEM is comfortable that the customer receives what is promised through the tailormade finance, maintenance and insurance offers. How much of a competitive advantage does it give an OEM in today’s business climate? The advan-

Companies using Mercedes-Benz vehicles include John Deere, Ngululu Bulk Carriers and Timber Logistics Services – showcasing the diverse applications where MBSA operates

tage is that the MBSA can control the process and can offer the client a complete value proposition without relying on a third party.

Does having the option of in-house financing attract potential customers who might be considering two

dealer network can apply for finance with MBFS.

How flexible is the inhouse finance department during tough economic times in assisting customers? MBFS only finances MBSA products and during the tough economic times we could not pull out of the commercial vehicle market. We had to become very innovative to survive the difficult times with our customers. By restructuring the finance agreements to match our client’s cash flows and working closely with clients to work out a suitable plan, we kept many clients in their vehicles to operate and earn an income.

“With our knowledge of the transport industry we can offer a tailor-made solution to our customers to match their cash flow and life expectancy of the vehicle” different truck manufacturers? We are trying to make it easier for our clients to operate their fleet by offering a one-stopshop service – by offering a complete value chain offer. Other manufacturers without this option might lose a client that does not want to run around and get all the products that an in-house company provides.

Can any operator apply for your in-house financing or is it only available to long-established customers and only becomes applicable when a certain number of trucks are purchased? Any operator that buys a vehicle via our franchise

How do you assist customers in structuring the best deal for them? With our knowledge of the transport industry we can offer a tailormade solution to our customers to match their cash flow and life expectancy of the vehicle.

What advice would you give to customers and potential customers who are in the market to purchase trucks – before they decide on their financing options? Customers must evaluate the total cost of ownership of a vehicle; we understand the business and will offer a package that suits the needs of our clients.

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COMMERCIAL VEHICLES MAN

MAN trucks carry Chrome In a landmark deal, the Reinhardt Transport Group, a long-haul trucking operator, has bought 140 MAN TGS 27.440 BBS 6x4 trucktractors from MAN Truck & Bus South Africa.

Derick Reinhardt, CEO at Reinhardt Transport Group and Bruce Dickson, MAN Truck & Bus South Africa’s truck division CEO, at the official handover of the MAN TGS 27.440 BBS 6x4 truck-tractors

HESE 140 trucks will service the Rustenburgbased Chrome Carriers division of the Reinhardt Transport Group (RTG). Graham Gaskell, deputy CEO at RTG, says: “Our Chrome Carriers fleet comprises 255 side-tipper interlink truck-trailer combinations transporting loads of between 33 and 34 t of chrome-related products from the Highveld to the ports of Richards Bay and Maputo.” This deal with MAN follows a stringent process of product analysis of several leading extra-heavy truck OEMs to determine which derivative would offer the lowest total cost of ownership while delivering optimum productivity. In 2012, Chrome Carriers introduced four MAN TGS 27.440 BBS units into its fleet on a trial basis. Derick Reinhardt, CEO at RTG, adds: “Our decision to purchase MAN vehicles was based upon the fact that each vehicle notched up over 200 000 km without a single technical issue being reported. This was supported by a number of other positive factors, including impressive fuel consumption figures, competitive pricing, driver comfort, comprehensive

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product support, and a warranty and maintenance structure that meets our fixed cost targets.” Bruce Dickson, CEO of MAN Truck & Bus South Africa’s truck division, says: “It is a privilege to be associated with such a high-profile fleet, and being able to enter the Chrome Carriers fleet with such resounding success gives all of us at MAN much to be proud of.” With a three-year/600 000 km fleet replacement cycle, Chrome Carriers has replaced 100 vehicles of its existing fleet and expanded it by more than 40 units following its deal with MAN. Dickson states: “MAN’s Driving Academy conducted a comprehensive ‘train the trainer’ programme with Chrome Carriers’ driver-trainers, ensuring every TGS driver in the fleet is fully conversant with all the safety and economy technologies on the vehicle. With the correct driving style, fuel savings of between 7 and 10% can be achieved and the environmental benefits from these savings extend to a carbon emissions reduction of 2.63 kg for every litre of fuel saved. This is an important factor for any fleet operator serving blue-chip clients.” According to Dickson, another factor that played a part in MAN securing this deal was the MAN Uptime Principle, which ensures fleet vehicles are serviced with minimum downtime. Dickson adds: “Our dealer representation in the Highveld mining belt, running along the route from Rustenburg through Gauteng and Mpumalanga to the coast, is covered by five MAN dealerships and our parts supply infrastructure along with our Mobile24 roadside assistance service ensures a customer’s truck does not stand for a minute longer than necessary. “The 440-horsepower TGS 27.440 BBS is designed for onand off-highway applications, displacing 2 100 Nm of torque from 1 000 to 1 400 rpm, enabling optimum tractive force at low engine speeds, making it ideal for applications such as mining where muddy conditions are prevalent. The truck-tractor has a driveline optimised for long-haul bulk transport and is equipped with MAN’s TipMatic automated manual transmission and BrakeMatic intarder, allowing for safe and economical operation on the open road.” Reinhardt concludes: “We are constantly expanding our horizons and our partnership with MAN has enabled us to significantly reduce our technical risk, fix our maintenance costs and positively influence our trade-in values. With the commitment from MAN to meet our service levels, I am confident our relationship with MAN will grow from strength to strength.”

COMMERCIAL VEHICLES HINO

Trucking is in the blood Dr Casper Kruger has a passion not only for his brand, but more importantly for ensuring customers driving Hino trucks keep on moving efficiently.

BUOYANT KRUGER says he is optimistic about the year as Hino continues working closely with customers. “Our focus this year is to go beyond simply selling our vehicles to customers and get involved with our customers’ business, enabling them to optimise their vehicles more efficiently in their day-to-day operations. “We know how the Hinos we sell can be operated to ensure running costs are kept to a minimum and from this point of view we can get to know and understand how our customers can best serve their customers through using our vehicles.”

Hand in hand “This is not only from a sales perspective, but because we also want to understand how our customers’ drivers drive their vehicles. This way we can ensure their driver operates the vehicle more efficiently. Not only do we get to understand a customer’s business, we also get to know the drivers driving the vehicles we sell. We will also offer training to drivers so they can drive the vehicles efficiently, thus ensuring wear and tear along with fuel consumption is not a runaway expense. “At the same time we will also provide the necessary training to customer’s workshop staff if they prefer to service their own vehicles, including sending technical bulletins. Most OEMs and their dealer networks prefer the vehicles be serviced by the approved manufacturer entities, but the reality of the business landscape is that many customers service their own vehicles. We would rather assist a customer in maintaining the vehicles properly so the vehicles are efficient as it fits in with our philosophy of providing total support to a customer using Hino vehicles in their business. We are busy rolling this concept out through the Hino dealerships as they are the ones that will ensure the success of this business philosophy.” Kruger adds that Hino representatives asked one of their customers with a large fleet a number of questions regarding driver behaviour, which resulted in the customer checking their drivers’ eyesight, diets and nutrition along with what they drank and so forth to stay alert. “We then brought in experts to do presentations to the drivers and the fleet managers educating them on the importance of having regular eye tests, along

with the right diets and rest breaks so they could stay alert at all times behind the wheel, ensuring the company becomes more productive through its drivers’ health being maintained. The driver plays a significant role in the success of every transport operator and by focusing on this key element of an operation, companies realise we are working towards a winwin situation for everyone involved in the business.”

Dr Casper Kruger, vice president, Hino South Africa

Growth Kruger says Hino trucks have seen a strong showing this year, largely due to the overall growth in the medium heavy sector. “Last year, we also introduced service maintenance plans as an optional extra and our team is educating customers on its benefits. The plan is especially beneficial if you operate a national fleet as your maintenance costs can be predefined; irrespective where in the country your Hino gets serviced, you pay the same price. “The brand has grown year-on-year within the market place and this year we are on track to sell 4 000 vehicles. During the first quarter we sold 1 046 units. The next quarter is going to be hard work and it is going to be a real challenge during the rest of the year, but I am optimistic we will meet our targets while at the same time going the extra mile to ensure our customers operate the Hino more efficiently so their businesses can also grow.”

Hino trucks have seen a strong showing this year due to the overall growth in the medium heavy sector

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COMMERCIAL VEHICLES FEEDBACK

AFRICA

ROAD TRANSPORT FORUM

2 0 1 3

Solutions for intrare gional trade This yearâ&#x20AC;&#x2122;s Africa Road Transport Forum was a resounding success, attracting key role players within the transport sectors from throughout Africa.

HE CONFERENCE WAS not just about listening to a series of industry experts discuss issues close to their heart, it also gave delegates a chance to participate in active debates, engage with colleagues, share experiences and discover that transport issues across the continent are similar and how each region is tackling these issues. The forum demonstrated that through working together and sharing experiences, African transporters can find solutions and together can strive towards creating a better transport industry. Granted, many issues affecting the movement of freight across the continent have been around for many years. However, delegates at this forum found they are not alone and that by working together a difference can be made in ensuring the road transport industry can grow as a key economic instigator in growing the overall economic stability of the continent. Problems affecting the movement of road freight across Africa will not disappear overnight, but the platform has now

18 18

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been set for constructive discussions among role players who have the willpower to create positive changes within the African transport sector for the benefit of the whole continent. Issues such as non-tariff barriers can be dealt with as they occur and action can be taken by the transport industry as a whole through the correct channels – taking the issues to a political level where solutions can be created. What strengthened this forum was the attendance of delegates who had attended the SSATP REC-TCC meeting, which was held in South Africa for the first time just prior to the forum. A report back on this session and an overview of the SSATP can be found on page 24.

More focused While welcoming delegates to the forum, Barney Curtis, CEO of FESARTA, said: “The important thing we are going to be doing is working together to come up with the best actionable and implementable solutions, and those words are going to be coming through quite strongly during this event. “What we have done over the years is look to government and regional authorities to sort out our problems and then moan if they do not; those days are over. They will help us, they will facilitate what we do, but do not expect them to sort out the problems. That is why we are hosting this Africa Road Transport Forum. “We are taking the initiative to say this is what must happen and then we will get the support of the RECs, SADC, Comesa and EAC to push through recommendations as being part of the solution. Last year, we had the Truckers’ Forum and we came up with useable and doable solutions, but they were generalised. Last year was the first time we hosted such an event aimed at making a difference for transport operators in Southern and Eastern Africa and it was a learning curve for us. We came up with a many outcomes on how to sort out transport issues affecting the region, but very few of those solutions were actionable or implementable. Some progress has been made on those issues from last year and we have learnt from what we did at the Truckers’ Forum. We are taking this concept forward into the Road Management Forum and I believe that now we are going to focus and come up with actionable and implementable solutions that we will be able to take forward

into the industry to make a positive contribution within the transport sector. “We have had a number of successes following on from last year’s forum, including Mozambique now allowing trucks with a 56 t GCM into the country, the US$200 (R1 807.48) charge on Kenyan transporters by Tanzania authorities has been removed, hijackings in the Teit Corridor have been reduced, municipal levies are no longer charged by Matola in Mozambique and the 40 km/h restriction on trucks in the Democratic Republic of the Congo is no longer in force. These are some of the things that have happened since Barney Curtis, CEO, FESARTA last year’s Truckers’ Forum, which we can consider to be a success; this bodes well for all of us moving forward for this year’s Africa Road Transport Forum.” According to Curtis, there are two important regional processes in place: the regional harmonisation project and the non-tariff barrier system. Regarding the regional harmonisation project, FESARTA is working on this in conjunction with the RECs, SADC, Comesa and the EAC. This includes road-user charges, thirdparty insurance, vehicle standards, dangerous goods, market access and custom bonds. These management issues are being dealt at a regional level with national governments because it is they that legislate, following recommendations from the relevant transport sector role players. The non-tariff barrier system is dealt with at national government levels and exists as a result of obstacles that transporters believe are detriment to the road transport freight industry at a regional level and which need to be removed via legislation, especially if the removal of a non-tariff barrier has been agreed upon at a regional level. FESARTA works closely with the SADC-Comesa-EAC Tripartite in solving these non-tariff barriers along the relevant corridors. The main difference and change from the 2012 Truckers’ Forum and the Road Transport Forum is that 15

“Now we are going to focus and come up with actionable and implementable solutions.”

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FROM TOP Lovemore Bingandadi, corridor advisor at the SADC Secretariat (From the left) Lovemore Bingandadi, Tomomi Tokuori (Japan International Cooperation Agency), Tapio Naula (Principal Transport Economist, African Development Bank) and Stefan Atchia (Principal Transport policy Specialist, African Development Bank) at the forum Delegates at the forum

non-tariff barriers were discussed at the latter to find suggestions and clarity for possible solutions, with attendees giving suggestions on how these could be solved or who should be approached within the various regions in order to have them solved. Curtis says: “We are doing this for a specific reason because we want delegates to be part of the implementable and actionable solutions. We, as key stakeholders in the African transport sector, have to take action and make sure the environment we work in changes for the improvement of our industry.”

Transport infrastructure vision Lovemore Bingandadi, corridor advisor at the SADC Secretariat, delivered the keynote address, outlining SADC’s transport infrastructure vision. Because 80% of all freight is moved via road in the region, it is a key element to the growth and development of Southern Africa and this shows the key role played by the road transport facilities. To achieve its transport vision, SADC has mapped out

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a four-stage scenario of the move from economic cooperation towards full economic integration. Stage one is the harmonisation of national policies and modes of transport within the SADC region so the whole region has the same standards, for example vehicle dimensions and relevant transport policies. Stage two is the coordination of national policies with common rules relevant to the transport industry for all member states. The move to the future entails signing lateral road transport agreements for a single road transport market. This follows on from the bilateral road transport agreements already signed between member states. Stage three will comprise joint initiatives between regional decision-makers and the implementation within the member state national resources. There are a number of challenges facing SADC before this stage can happen due to the various economic and political barriers. For stage three to become a reality, member states would have to surrender the power of their roads to a central authority like SADC. Stage four is where SADC sees initiatives pursued independently of nations. It is this vision that SADC hopes to attain through time. Because it is, in essence, about integrating harmonisation, SADC will pursue a programme towards integrating the infrastructure within the region. The operation within the transport sector includes the following: • the systemisation and implementation of transport protocols • the implementation of national labour relations, which must conform to international and regional guidance. SADC is fortunate that its member states recognise it is not the business of government to provide transport services and that it remains in the hands of the private sector. At the same time, governments also acknowledge that for the industry to be efficient and effective it needs to remain in the hands of the private sector. Furthermore, SADC will establish regional regulatory oversight bodies to create a healthy economic competition environment, ensuring conformity among the member states’ transport standards and technical bodies. What is the role of the transport industry in all of this? Through its protocols and governance systems, SADC designates association organisations as key partners in the development and implementation of development implementations and programmes. SADC promotes a public-private approach in addressing the development challenges – in particular in the transport sector through the transport protocol – and fully recognises the role of industry associations, of which FESARTA is one of the consultative partners. SADC also ensures that the industry associations participate in all relevant technical meetings where senior transport officials coming from SADC member states meet to craft policies and advise ministers on the development and implementation of regional transport programmes, projects and activities. In addition, the SADC participates in various other institutions such as the corridor management committees and other task forces that are set up from time to time to solve emerging problems and challenges. The African Road Transport Forum is important in providing SADC with guidance within the regional transport challenges. To view the various presentations from the Africa Road Transport Forum go to www.transportworldafrica.co.za, click on the events tab and then the Africa Road Transport Forum link.

COMMERCIAL VEHICLES ACTION TO BE TAKEN ON NON-TARIFF BARRIERS (NTBS) SESSION

1 Load limits, overloading control and dimensions

2 Reduction of delays and costs at borders

3 Excessive and arbitrary charges, levies and taxes

4 Self-regulation

5 Unacceptable level of road safety

PROBLEM

CURRENT STATUS

1 Kenya restricts vehicle combinations, more specifically the 6-axle articulated vehicle, to 48 t and weighs by axles.

1 Lobbying to happen? Reinstate this NTB into the system so it can be on the agenda to be discussed at the EAC NTB Forum in June, to keep it alive. FESARTA to follow up and be the custodian and report back to all present.

2 Mozambique restricts an articulated vehicle carrying general cargo to 18 m length. It restricts an articulated vehicle carrying ISO shipping containers to 16.5 m length, and articulated vehicles exceeding this length limit must apply for a special permit and be accompanied by a police escort.

2 FESARTA needs to work with transporters themselves to find instances of this problem. Find specifics and deal with them.

3 Botswana – Authorities are enforcing outdated dimensional limits, i.e. 2.5 m width and 4.1 m height. These are not in accordance with SADC recommendations of 2.6 m and 4.3 m. Transporters are not able to reduce the width and heights of their vehicles.

3 Recommend that when SADC members meet on 21 May they discuss this NTB. FESARTA will work with SADC in this regard. In the meantime, Modise Koofhethile from Gabcon will approach the Botswana authorities to obtain a letter stating that until the SADC meeting, Botswana authorities will not enforce this NTB.

1 Zambia – Drivers can spend a total of 90 days per year in Zambia. A driver was denied entry after the 90 days allowed had expired within a period of 12 months.

1 Resolved

2 Zimbabwe – The old bridge at Beitbridge cannot be opened to traffic because of an existing agreement between the government of Zimbabwe and a private sector company. It is accepted that it is an old bridge and that it may not be safe for many heavy trucks using it at one time. However, there is a railway line over it and there does not seem to be any refusal to allow trains to use it.

2 FESARTA to source the study. FESARTA is to also hold discussions with the Border Control Operational Coordinating Committee and Zimbabwe Revenue Authority (ZIMRA) to establish what the next step should be in taking the issue of Beitbridge to a higher political level.

3 Zimbabwe – ZIMRA does not allow imported vehicles for transit to drive on the roads to their destinations.

3 FESARTA to investigate.

4 Mozambique – There are too many stops when entering Mozambique from South Africa. The first at 7 km from the border, the second at the South African border, the third 4 km after the Mozambique border and the fourth at Frigo in Maputo.

4 FESARTA to follow up with customs in Mozambique and will also look at the possibility of moving Frigo to the 4 km mark.

1 DRC/Zambia – Very high toll fees to go through the Zambian and DRC borders at Kasumbalesa.

1 FESARTA to approach the DRC authorities to highlight the situation in order to solve it.

2 Zambia – The Environmental Council of Zambia is requiring foreign transporters carrying dangerous goods into Zambia to purchase a licence at a cost of around US$750.

2 Fuel companies should follow up on this with the relevant authorities in Zambia. A consignor, i.e. South Africa-based oil companies exporting fuel, to take tanker permits up with relevant Zambia authorities.

3 South Africa – In 2011, the Cross-Border Road Transport Agency raised its cross-border road transport permits by up to 600%.

3 The RFA has taken the issue to court.

4 The Zimbabwe road traffic authorities are enforcing vehicle equipment regulations that pertain only to their own country and are not harmonised with other countries.

4 FESARTA to follow up and look at the bilateral agreements with the law enforcement agencies in Zimbabwe. Letters received from the various governments confirming bilateral agreements between the various countries relating to transport issues be made available on the FESARTA website in the official languages of the relevant countries so transport operators can print them out and give to their drivers travelling through the regions.

5 Zambia/Botswana – Municipalities levy charges for trucks to pass through them. Transporters are being charged a motor vehicle fee by Chililabombwe, Kapiri Mposhi, Chirundu and Siavonga municipal councils in Zambia. Furthermore, Chobe municipality in Botswana is doing the same.

5 Brian Shone from the Federation of Zambian Road Hauliers will follow up on this with the relevant authorities in Zambia. Modise Koofhethile from Gabcon in Botswana will do the same in Botswana. Both will keep Barney Curtis in the loop.

6 The Zimbabwean Ministry of Transport and Infrastructure is levying a toll of US$30 per trip for the crossing of the Victoria Falls bridge.

6 Mandate FESARTA to take up this issue and facilitate a meeting with the various departments of transport to discuss these transport matters.

1. Low level of adherence to regulations and poor relationships with authorities.

1 FESARTA to take up this issue and facilitate a meeting with the various departments of transport to discuss these transport matters.

1 South Africa – The managing director of Cross Country Containers in Zimbabwe has reported that there had been four incidences of hijacking of his vehicles in the Gauteng area.

1 FESARTA to work with the RFA in tackling hijacking.

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COMMERCIAL VEHICLES SSATP

Efficient transport policies Simon Foulds looks at the history of the SSTAP, charting its growth from a subSaharan African focus to where it now looks at the whole continent.

N 1987, the Sub-Saharan Africa Transport Program (SSATP) was established as a transport policy development forum in Africa. To this day, it brings together diverse stakeholders, while developing networks of specialists including researchers, operators, and consultants in land transport-related fields in Africa. Having expanded its region to incorporate the rest of the continent, the organisation has changed its name to the Africa Transport Policy Program (but is still referred to as the SSATP). Today it is an international partnership comprising 38 African countries incorporating regional economic communities, institutions such as the African Union Commission and UN agencies, along with public and private sector organisations and international development agencies and organisations. All members are united in

Members are united in their efforts to assist African countries to promote sustainable transport for economic growth Olivier Hartmann, senior trade facilitation specialist, World Bank, and Gavin Kelly (speaking), RFA technical director

their efforts to assist African countries to strengthen their policies and strategies to promote sustainable transport for economic growth, and ending poverty. The organisation has structured its operations into various phases. It is currently operating in its second phase (2009 to 2013). The programme has focused on three strategic themes: • promoting comprehensive pro-poor and pro-growth transport sector strategies • promoting sustainable institutional and financial arrangements for road infrastructure and rural and urban transport services • improving transit along selected international corridors. Financial contributions to this phase have come from: the African Development Bank, the European Commission, the Islamic Development Bank, along with Austria, France, Norway, Sweden and the United Kingdom. All funds were deposited into a trust fund administered by the World Bank. The programme’s third phase starts in 2014 and will end in 2018. The strategic goals in the next phase are to increase ownership of the SSATP by key stakeholders, anchor the programme in Africa, adopt a more demand-driven approach, address emerging issues in the transport sector and connect with other initiatives on the continent. During this phase the programme will be structured around three clusters: • integration, connectivity and cohesion • urban transport and mobility • road safety. A fourth cluster will focus on emerging issues such as green growth and sustainable transport, governance, policy performance, as well as inclusive and multi-sectoral approaches for greater development impact.

Achievements to date Because the Africa Transport Policy Program is structured around the policy development cycle,

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for Africa programme activities focus on knowledge creation, knowledge dissemination, advocacy, application and support to policy implementation. Over the years, the programme has achieved the following results: • enabled transport to contribute to poverty reduction strategies • improved efficiency of road sector management • created mainstream sustainable transport and climate change preparedness into transport policies

• improved transport sector governance • promoted regional integration • advocated road safety. • sharing information. The core activity of the SSATP is knowledge production, information sharing and dissemination of good practices in the transport sector. On average, the programme produces four publications per year. These publications document the work undertaken by the SSATP in collaboration with member countries, highlighting good practices across the continent.

MEMBERS

All documents are available for download through the SSATP website – www.ssatp.org.

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Email your details to subs@3smedia.co.za to receive a copy of Transport World Africa every alternate month.

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To receive your digital copy of Tran nsport World Africa every alternate month go to www.3smags.co.za

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COMMERCIAL VEHICLES SSATP

Africa discusses pertinent It is estimated that 80% of all freight travelling through Africa is moved by trucks. So without the roads, the trucks cannot deliver freight, and without goods and commodities being delivered by trucks, Africa would not survive.

Olivier Hartmann, senior trade facilitation specialist, World Bank

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O ENSURE AFRICAN trucks keep moving, the Regional Economic Communities Transport Coordination Committee (REC-TCC) meets twice a year and met in Johannesburg during April. This was the first time the committee has met in South Africa. Hosted by FESARTA and held prior to the Africa Road Transport Forum, the meeting had representations from corridor authorities, regional economic communities, African institutions including the African Development Bank, international development partners, regional organisations and national institutions like the Department of Trade and Industry and the Road Freight Association. The REC-TTC is a sub-committee of the Sub-Saharan Africa Transport Policy Program (SSATP).

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During the two-day event, the following issues were presented and discussed: • transport observatories • the status of the implementation of the SSATP corridor programme • the SSATP development plans • joint border posts. The corridor programme, which is part of the SSATP’s second developmental plan, is an ambitious project because

The Borderless Alliance has set up information centres at six borders, which provide pertinent information pertaining to the country being visited of the sheer size of the area being covered and the fact that data being obtained at the source is not necessarily accurate or reliable. Pilot transport observatories were established within West, East and Southern Africa, and these are funded by the World Bank (in Dar es Salaam), SSATP (in West Africa),

Joint and one-stop border posts The second day of the conference discussed the SSATP’s third development plan launching in 2014, which will tackle the issues of one-stop and joint border posts throughout Africa. In West Africa, the term used by the industry sector is joint border posts as opposed to one-stop border posts in Southern and Eastern Africa. There are currently three joint border posts being developed in West Africa at the borders between Nigeria and Benin, Ghana and Togo, and between Niger and Benin. Funding for these projects is being supplied by the European Union. Other similar posts are being planned on the Abidjan-Lagos corridor. The Borderless Alliance, a private sector organisation in West Africa, has made considerable progress in solving problems along the corridors and has set up border information centres at six borders, which provide drivers with pertinent information pertaining to the country they are visiting, thus ensuring they understand the rules and laws of the country they are about to enter. During the meeting, it was also mentioned that manuals are being drafted by members of the REC-TCC that elaborate on the programmes being drawn up to facilitate the transition of borders into one-stop or joint borders. It was also suggested that the role of the private sector in making corridor operation better should also be considered; this still has to be investigated further by members of the REC-TCC. Plans are afoot to again host the REC-TCC meeting just prior to the Road Transport Forum in 2014, therefore once again attracting key transport stakeholders from around the continent to sit and discuss pertinent transport issues on the African continent that affect everyone doing business within the transport sector.

Justin Bayili, MD, Borderless Alliance

transport issues TradeMark South Africa (along the North-South Corridor) and by TradeMark East Africa (along the Northern and Central corridors). It came to light during discussion that there were several challenges with the proposed observatories. The most significant was sourcing accurate data. The perception of what was possible was very different to what was actually experienced. Some data was only captured manually by authorities and so was not suitable for the observatories. Furthermore, data was not always captured accurately and efficiently. The data sourced from interviews was not always the same as that logged by the authorities. Dwell time for ships at anchorage was sourced, though it was not significant for container ships. It was decided at this meeting that the SSATP prolong its support for the transport corridors. One positive suggestion from TradeMark South Africa was that data be obtained from transport companies via their vehicle tracking systems. TradeMark South Africa was obtaining its data along the North-South Corridor through this method and had found it to be the most efficient and sustainable method of sourcing reliable data, though it was restricted to transit times.

TWA | May/Jun 2013

SUPPLY CHAIN LOGISTICS FUEL EFFICIENCY

Curbing fuel theft Trends and technology Fuel is the biggest operating cost for any fleet. With the price of diesel increasing more often than it decreases, how do operators ensure the theft of this commodity is kept to a minimum? By Simon Foulds

OW DO FLEET operators monitor their fuel stocks or what equipment should transporters install to make theft of diesel as difficult as possible? Hein Crocker from Dreamwork Technologies, Henco Schoeman from Qualitone Software Solutions, Jonathan Moyle from Centerco, Peter Stubbe, MD of Diesel Guard and Rordon Cowley from Digicell give their insight into some of the best ways to prevent fuel theft. All five agree the cost of fuel is a significant expense for every transport company, which is why they have products to either monitor or help curb the theft of fuel. They believe that the spin-off effect of fuel theft can have a disastrous impact on a transporterâ&#x20AC;&#x2122;s business, because when fuel is stolen it adds to the overall cost, and higher input costs mean profits are lower or a company has to

TWA | May/Jun 2013

SUPPLY CHAIN LOGISTICS

a variety of clients, different fleet compositions, vehicle makes and models with various applications, including heavy-, light- and medium commercial vehicles. ” He adds that fuel theft, in both retail and bulk, is understated in South Africa. “It is a huge problem with millions of rand obtained fraudulently on retail forecourts due to fleet card fraud, fuel theft and driver abuse. “Our conservative estimate is that between 8 and 14% of all fuel bills are fraudulent, specifically those who use fleet cards. Unfortunately, the electronic fuel systems available on the market have their own problems and abuse on these is rife. One area that we have found to be neglected among many fleet operators is at their home base fuel management systems. The entire stock process, from stock replenishment, transactional issues and tank adjustments to daily dips and daily reconciliations, are not always managed effectively, which results in substantial losses to fleet operators.” Crocker adds that most fleet operators manage on an average consumption basis. According to him, this is very dangerous as fuel theft or abuses are easily concealed in averages. “We follow a transaction by transaction management process where fraud, theft and abuse are detected and proof obtained within 72 hours of the transaction. ”

Different Solutions

raise the costs to its client. A higher quote could mean loss of business, which could eventually lead to a company cutting back on overall operations or even, in an extreme case, closing its business.

Fuel theft understated Crocker says: “Our company specialises in outsourced fuel management, where we manage every single fuel transaction on behalf of our clients. We currently manage in excess of 14 000 vehicles daily. We use a system that we developed, called Fuel Manager, which identifies fraud, theft and abuse with a 90% accuracy rate. We look after

Schoeman adds: “There are different solutions to combatting fuel theft, but they all have shortcomings. Some fuel tracking systems measure the average fuel consumption of a vehicle and then draw up a report indicating that fuel has been stolen from a particular vehicle. This is usually taken from data over a period of time. However, we believe knowing that fuel has been stolen is not enough, and most owners only find out days or weeks after the incident has happened. We offer what we believe is a real-time solution called FuelCop, which alerts manHein Crocker, Dreamwork Technologies agement via SMS

“The entire stock process, from stock replenishment, transactional issues and tank adjustments to daily dips and daily reconciliations, are not always managed effectively, which results in substantial losses to fleet operators.” TWA | May/Jun 2013

SUPPLY CHAIN LOGISTICS

and they can then track the location of the vehicle and take immediate action.” For example, if you have a truck travelling between Pretoria and Nelspruit on a daily basis that is authorised to fill up at one particular filling station halfway, and does so at approximately the same time every day, then should the driver open the fuel tank anywhere else at an unexpected time, the fleet manager or owner of the truck is notified immediately. This system is also linked to Google Maps, so the fleet manager or owner can immediately locate the vehicle’s whereabouts at the time of the incident. He adds: “You would be horrified to know that many companies, espeHenco Schoeman, technical director at Qualitone cially the smaller Software Solutions

“You would be horrified to know that many companies, especially the smaller operators, do not know how much money they are losing due to fuel theft.”

operators, do not know how much money they are losing due to fuel theft. Having the right systems in place may incur some costs, but the rewards are significant. Monitoring fuel theft needs to be done proactively and the perpetrators must be aware that they can be caught out. It is only when you are able to collect hard evidence that can be used in a disciplinary hearing against perpetrators that fuel theft can really be curbed.” Qualitone Software Solutions is a specialist in Internet application development; FuelCop is the company’s fuel protection system.

Poor fuel management Moyle says: “The danger of having poor fuel management will lead to an extreme loss of revenue. Because perpetrators steal small quantities at a time – 10 to 15 ℓ – it makes it difficult to monitor, especially when drivers claim the extra fuel usage is due to them revving hard or long idle times while the engine is running.” 

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SUPPLY CHAIN LOGISTICS

R3 billion per year Annual loss to companies through diesel theft Peter Stubbe says: “According to the e-Natis numbers for 2010 there were 324 303 trucks registered. Let’s assume that half of the fleets are subjected to diesel theft, that will be 162 151 trucks. It is assumed that on average between 20 to 50 litres of diesel per truck per week is stolen. (There are no proven numbers available). If we take an average of 35 litres of diesel as stolen from each truck weekly and if there are 45 working weeks per annum then we work on the following formula: 45 x 35 = 1 575 litres of diesel per truck per annum is stolen. 1 575 x R 11.50 (average diesel price per litre) R 18 112.50 per truck per annum. R 18 112.50 x 162 151 = R2.9 billion loss to companies through diesel theft.”

Centerco’s products are fitted and fixed into the filler neck of the tank, thus stopping perpetrators from putting pipes into fuel tanks to siphon diesel. “It is our opinion that fitting a fixed anti-siphoning device in the tank will stop the so-called quick theft of diesel. It also sends a message to the drivers that management is monitoring their fuel usage. You will never fully prevent theft of fuel, because if they really want to steal it they will. But if drivers know fuel consumption is being constantly monitored, then that should cut down on largescale fuel theft of small amounts.”

“If drivers know fuel consumption is being constantly monitored, then that should cut down on large-scale fuel theft of small amounts.” Jonathan Moyle, sales executive, Centerco

On the increase

Stubbe states: “With the ever-increasing fuel prices, it is a given that fuel and diesel theft is very much on the increase, costing the industry millions. Thieves have become very ingenious in their methods and most anti-siphoning devices cannot do the job as advertised because most of them still allow vast amounts of diesel to be siphoned freely! Electronic monitoring devices like e-fuelling are a good admin tool, but nothing else. These devices cannot prevent diesel theft at all.” “Major Southern African fleet owners and operators make use of the products to combat diesel theft effectively and a number of OEMs have Peter Stubbe, MD, Diesel Guard

“Disorganised companies are losing millions of rand to diesel theft and other shortcomings, and are most likely not even aware of it.” 30

TWA | May/Jun 2013

approved the Diesel Guard components to be installed into their trucks, not affecting any warranty issues.” Elaborating on the dangers of poor management systems, Stubbe states: “Disorganised companies are losing millions of rand to diesel theft and other shortcomings, and are most likely not even aware of it. It is, in most cases, ignorance and a ‘we know it all’ attitude. It is all good and well to have a satellite tracking system installed or a sophisticated Electronic System monitoring every movement of a vehicle, but who has the capacity to monitor a fleet of 200 plus trucks 24/7? A number of transport businesses went under in recent months due to ignoring basic checks and balances to monitor performances within their business. “To effectively protect their liquid assets operators need to install not only a first-class anti-siphon device to the tanks, but also take care of other weak spots in a fuel system, namely the breather valves, sender units and fuel lines, which need protection by installing covers and nonremovable drain plugs, etc. “It is important to check the on-board systems regularly and check the fuel quantity indicator for accuracy by taking dip stick readings to double check functionality of the system or to see if somebody has tampered with it. “Thorough administrative rules and regulations, including departure checklists, should be in place. Wet stock management can be problematic if not properly controlled and monitored by using video surveillance and recordings, including returning fuel amounts and fuel dispensed. But the main problem is to have competent staff in place to execute the entire monitoring chain of events and processes.” Stubbe concludes: “My advice to transport operators is that they should start listening seriously to specialists who have the knowledge and competence to provide advice on

You can trust us to deliver.

SUPPLY CHAIN LOGISTICS

how to combat diesel theft in a professional manner. They should take the time and listen carefully to what is said and see what products are available on the market that provide all-round protection. Insist on physically holding the products in your hand, and find out why one unit has double the price tag over another one. There is a reason. But the biggest problem at company level is ignorance.”

“Fuel often constitutes a greater cost than all the other expenses combined, so a slight increase may result in negative profit very quickly.”

Strained economy

Cowley adds that there are a number of factors influencing the continued rise in fuel theft. “Probably the Rordon Cowley, Digicell highest driving factor is the strained economy, which can push some individuals to subsidise their incomes through theft; those without, out of desperation, are finding crime to be a solution. While many assume that fuel is directly stolen through siphoning or draining from vehicle tanks, the reality is that BELOW One of a much higher volume of fuel is fraudulently acquired and the options from then sold for cash. Diesel Guard “Digicell has developed a system called Digit Vehicle for transport Tracking, which does live monitoring of the level of fuel operators in curbing fuel theft in a tank, irrespective of whether the vehicle is moving or

TWA | May/Jun 2013

parked. This system combines with the fleet-management software, allowing managers to know all fuel events such as when fuel is added or removed, how much and where the event occurred. The system also automatically calculates the consumption for any period, as well as the current fuel in the entire fleet. The inventory control of the highest cost commodity is critical to the efficient running of any transport business.” Regarding poor fuel management practices, Cowley adds: “With the number of transporters available and the slower growth in demand, the margins are becoming slimmer as companies reduce their prices to win business. This reduced profit and the ever-increasing costs, such as fuel, maintenance, insurance, rent, wages and general overheads, mean that a narrow gap between profit and loss is highly volatile. Fuel often constitutes a greater cost than all the other expenses combined, so a slight increase may result in negative profit very quickly.” Cowley believes there is a common misconception in the industry that electronic means are the best way to prevent a loss or improve a process. “While this type of technology might be a convenient means to an end, it is important to realise that it is just a tool to allow improved management. The management of a problem is reliant on operators creating an attitude of discipline and making sure that a manual fallback solution exists. In this way, the electronic method will be a tool to the solution, not the only solution. If there is no discipline, rules and practices in place, all the electronic information will have no purpose.”

Weâ&#x20AC;&#x2122;re in it for the long haul.

SUPPLY CHAIN LOGISTICS

INSURANCE

Ensuring your assets are adequately insured Simon Foulds speaks to Steve Cornelius at Indwe Risk Services, and Wayne Rautenbach at Regent Commercial Vehicles, asking them why transporters should be insured and what the pitfalls are – especially when trucks leave South Africa’s borders to deliver freight.

hat are the pitfalls of not having adequate insurance for transport operators in Africa?

SC Insurance is just one way of transferring the risk of a financial loss. In the event of an unforeseen accident, an insurer will indemnify the transporter through the payment of an agreed amount or the replacement of the damaged item. To ensure that adequate protection is in place,

“Transporters are unlikely to be awarded any cargo contracts if they do not have adequate cargo insurance cover in place.” Wayne Rautenbach, national manager, Regent Commercial Vehicles the transporter must first identify all possible loss-creating scenarios and then correctly estimate the financial impact of the loss. If there is a gap in the required cover, or the limits or sums insured are insufficient, then the transporter will put strain on the operational ability of the business by having to find other funds to replace or repair the damaged or lost goods.

TWA | May/Jun 2013

If the loss or damage is to a client’s goods, and the transporter is inadequately insured, this may impair the transporter’s relationship with the client. There could also be civil and criminal costs if the losses are due to negligence of the transporter. These costs can be provided for in most insurance policies. WR The fleet owner will be held liable for any loss or damage to the cargo while the cargo is in their care and custody, unless otherwise contracted. An uninsured loss has the potential to financially devastate a transporter; it could even cause his business to close down.

How critical is insurance for transporters moving freight out of South Africa’s borders? WR Transporters are unlikely to be awarded any cargo contracts, even on an ad-hoc basis, if they do not have adequate cargo insurance cover in place. SC If transporters are moving goods cross border on behalf of consignors, then there will be contractual and statutory requirements in terms of insurance cover. The transporter will be contractually obliged to insure the

goods that are being transported as the consignor will make this a condition of carriage. This would cover the transporter for all eventualities giving rise to a loss, including the mechanical breakdown of refrigerated trailers and trucks. Peripheral costs related to accidents must also be adequately covered, including clean-up costs, repatriation of the vehicle to the South African border and, where applicable, hazardous goods spillage protection. Statutory requirements may require the transporter to purchase third-party liability insurance from local sources.

What insurance advice would you give transporters who move road freight through Africa? SC The best advice that I could give a transporter doing cross-border business is the following: • ensure the fleet is roadworthy at all times • check that the territorial limits on the policy cover all the routes • ensure your sum insured limits are adequate • try and manage the driver’s driving hours and regular stops • get satellite tracking installed on your trucks. 

SUPPLY CHAIN LOGISTICS

R157.7 billion is how much accidents cost the South African economy between March 2010 and April 2011, according to the AA WR You need to ensure that your policy is extended to include cover in the geographical area in which you will be required to operate. Also ensure that the basis of valuation of your policy will cover the delivered cost of the cargo at final destination as this will be the amount ultimately claimed from you. Ensure that your policy provides cover in respect of the specific commodities that you will be transporting. Many policies exclude, for instance, copper loads from the Zambian and DRC cop-

â&#x20AC;&#x153;The transporter must make sure that the cover given to him extends to the geographic areas that he is travelling through.â&#x20AC;? Steve Cornelius, head of specialist risk: automotive and transportation, Indwe Risk Services per belts due to the very high risk of theft and hijackings. Should you operate refrigerated/temperature controlled vehicles, ensure that your policy cover is extended to cover cargo losses stemming from breakdown or malfunction of refrigerating equipment. Check what your policy requirements are regarding procedure that needs to be followed

TWA | May/Jun 2013

following an accident or loss, for instance: must the cargo be repatriated to South Africa and, if so, at whose cost? These are some of the things you need to find out. Check what additional excesses might be due while operating cross border.

Does a transporter need specific insurance for every country they move through or does blanket insurance cover a transporter moving goods through various countries? WR This will vary from insurer to insurer. Some insurers restrict cover to South Africa only. Normally your policy will state which countries are automatically included. Any other geographical area will have to be negotiated with your insurer. SC The transporter must make sure that the insurance cover given to him extends to the geographic areas that he is travelling through. Damage to goods in transit will be covered if the territorial limits are correct. Third-party liability needs to be purchased from certain of the SADC countries each and every time the vehicles move through the country.

What are the most common insurance claims received from transporters moving goods through Africa, including South Africa?

SC The most common claims pertain to motor own damage as a result of accidents, followed by goods in transit, third-party liability and finally theft and hijack. The major cause for accident-related claims is driver behaviour. This, in turn, is influenced by driving hours (fatigue), speeding, overloading and poor maintenance (brakes and tyres). Road conditions can also play a role in the frequency of truck-related claims. Many accidents are single vehicle accidents, which indicates fatigue. Many GIT (goods in transit) claims, other than those following an accident, relate to faulty refrigerated units and theft. WR Same as what you will find in South Africa: high frequency of petty theft of cargo from vehicles, normally while overnighting, as well as high severity claims such as overturning and collision. South Africa also has a high rate of losses from truck hijackings; this is uncommon in rest of Africa.

Do you require transporters to have additional security measures such as fleet tracking or RFID chips before you insure them? WR No additional security measures are required other than what would be required in South Africa. The value and type of commodity will determine what security measures are required. SC More and more insurers are turning to telematics as a risk management tool. No longer is it merely a tracking device used to recover stolen vehicles, but the information is being used to monitor and manage driver behaviour, routing and efficiency improvements. This information can also be used for postaccident reconstruction, which can often assist with third-party claims. Currently, all insurers insist on tracking devices for vehicles over a certain limit to ensure cover for theft. It is the transporterâ&#x20AC;&#x2122;s responsibility to ensure that these devices are functional. If they are found to have been not working at the time of a theft, the claim may be repudiated. Self-testing the units will limit this risk.

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SUPPLY CHAIN LOGISTICS

STRATEGY

Why Transnet Freight Rail is the future

In the 2012/13 financial year, Transnet Freight Rail embarked on a seven-year Market Demand Strategy. It was acknowledged at the outset that the implementation of this strategy would be challenging.

HE NEW STRATEGY is part of the greater Transnet Market Demand Strategy. A key element is a shift of traffic from road to rail. This involves capturing rail-friendly traffic, as freight by its very nature is more suitable for transport by rail than by road. Railfriendly traffic may be defined as freight that typically includes heavy mineral and mining commodities (coal, iron ore, magnetite, chrome, rock phosphate, etc.) being conveyed over long distances, but also includes agricultural products and containerised commodities and goods. Total externality costs (accidents, carbon dioxide emissions, congestion, noise and policing) for South Africa in 2010 was estimated at R27.8 billion, yet they are unaccounted for in the financial statements of the users of the logistics system. Some of these costs will be internalised through taxation and similar mechanism in the near future and should therefore not be ignored, according to the eighth annual State of Logistics Survey 2011. It is interesting to note that

Transnet Freight Rail is striving to grow its market share from 25 to 35% by transporting more than 350 Mt of freight 38

TWA | May/Jun 2013

companies such as Samsung, Woolworths, Nike and Tiger Brands are now using rail for their products. With South Africa’s high logistics costs a widely acknowledged impediment to its global competitiveness, Transnet believes that a move to intermodal transport and the associated cost benefits will contribute to turning this around. Over the next seven years, Transnet Freight Rail is striving to grow its market share from 25 to 35% by transporting more than 350 Mt of freight and creating jobs directly within the rail sector and indirect jobs in the South African economy. The expected contribution to the economy is a reduction of the number of long-haul trucks on the road, carbon dioxide emissions and total logistics costs. During this time, Transnet Freight Rail will also respond to the national objectives of the country and a development state that the country is building. The Transnet Freight Rail division was reorganised in 2012/13 to improve operational efficiencies and service delivery tailored to specific customer segments. The six customerfacing business units that were created are: • agriculture and bulk liquids • coal • containers and automotive • iron ore and manganese • mineral mining and chrome • steel and cement.

TRANSNET FREIGHT RAIL

Transnet Freight Rail is the largest division of Transnet. It is a world class heavy haul freight rail company that specialises in the transportation of freight. The company maintains an extensive rail network across South Africa that connects with other rail networks in the sub-Saharan region, with its rail infrastructure representing about 80% of Africa's total. The company is proud of its reputation for technological leadership beyond Africa as well as with-in Africa.

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SUPPLY CHAIN LOGISTICS

Intermodal transport has big benefits The time is ideal for an “intermodal renaissance” that will enable South African companies to leverage the strengths of both road and rail transport. By Simon Foulds

EBISA LEDWABA, Imperial Logistics’ rail projects executive, believes companies that join what he describes as the “intermodal renaissance” at grass-roots level will play a pivotal role in shaping a logistics strategy that holds vast untapped potential. Intermodal transport is defined as the transportation of unitised (generally containerised) cargo using multiple modes of transport (ship, rail and road). “One key aspect of firms entering these uncharted waters is selecting the right logistics partner,” Ledwaba says. He adds: “The focus by Imperial Logistics is making the

40 40

TWA | May/Jun 2013

move from road to rail in Southern Africa; our intermodal transport strategy involves increasing the amount of product transported by the rail infrastructure and we are seriously looking at the possibility of converting freight that is currently moved on road to rail in the foreseeable future.”

Combining the strengths of road and rail According to Ledwaba, the vision of this “intermodal renaissance” combines the strengths of both road and rail, offering Southern African countries the best of both transport modes.

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“It is a great opportunity, because by using a hybrid form of transportation, intermodal unifies trucks, rail and sometimes cargo ships into one transportation system by using intermodal containers, so that shippers do not have to pack and unpack their cargo each time the mode of transit changes, which improves efficiency and safety. This constitutes the road logistics “The benefits of rail is that it is costs within the total logistics costs more economical and fuel efficient in South Africa than road transport. It also presents unique benefits of combining the cost advantage presented by economies of scale, cheaper fuel and labour of trains with the superior service qualities of trucks and the flexibility over short distances. This means intermodal can offer competitive rates to customers over several years because of the stability of the rail cost structure and long-term payback period. In terms of fuel efficiency, rail consumes around one-third of the fuel required by road transport.” The environmental benefits are also in rail’s favour because of less noise, air pollution and lower carbon emissions. “With a carbon tax on the cards, the ‘greening of the supply chain’ issue is not just about being environmentally aware. This is also an important, financial consideration going forward.”

53%

greatest economic benefits over long distances and for volume transport. “Obviously, rail in Africa is slower than road transport, so there must be some trade-off between cost and speed, but for the right company and the right cargo – and in partnership with the right logistics service provider – intermodal is an opportunity to be seized now.”

Intermodal transport into Southern Africa The distances covered make rail the ideal transport mode in Southern Africa. “The fact that throughout Southern Africa we have the same gauge rail infrastructure also makes it a perfect solution. Border posts along Southern Africa’s North-South Corridor are notorious efficiency inhibiters and cost drivers for companies doing business in Africa, but border crossings by rail are usually fast and efficient, with most rail cargo having preclearance. “Rail is known for moving bulk commodities, but we need to start considering it for consumer products too. With the lion’s share of consumer goods now outsourced to China for manufacturing and then shipped into South Africa, the need exists to move these goods inland as cost effectively as possible. If the cargo is containerised (or moved in a homogenous unit) it is suitable for intermodal transport, whether it is clothing or electronics.” Total logistics costs in South Africa in 2010 amounted to R339 billion, or 12.5% of the GDP. In Europe and the US, this is around 7 or 8% of GDP. Our high logistics costs – 53% of which is spent on transport – need to be addressed for South Africa to compete in an increasingly global marketplace.

Collaboration is key to success Leveraging the benefits of rail transport “While our roads are becoming increasingly congested, rail has excess capacity. The current use of rail transport between Gauteng and Durban is around 30%. Though the investment cost of road versus rail infrastructure is comparable, rail has the advantage over road in that, once established, it has over twice the lifespan and uses a fraction of the land space,” says Ledwaba. “South Africa is perfectly placed to reap the rewards of an intermodal transport strategy that combines the benefits of road and rail. The country’s main economic hub is Gauteng, which is some 600 km away from the nearest port of entry. This distance provides an ideal opportunity to leverage the advantages of rail, which yields the

“South Africa is perfectly placed to reap the rewards of an intermodal transport strategy.” Gebisa Ledwaba, rail projects executive, Imperial Logistics

TWA | May/Jun 2013

The challenges associated with rail have, in the past, deterred companies considering this mode of transport, but the success of intermodal lies in collaboration. “Intermodal transport is complex, so the key is to have the multiple parties coordinated by one logistics service provider,” he says. “This service provider also needs to provide the visibility that has, in the past, been a challenge associated with rail transport.” “For it to be the complete solution that intermodal transport has the potential to be, we need to see significant investment in our rail and port capacity, and an increase in mechanisation, along with investment in technology. But the tide is turning and we should start reaping the rewards that intermodal transport has to offer. In partnership with the right logistics service provider, companies can make the move to intermodal transport now, spearhead the ‘intermodal renaissance’, and start leveraging the advantages that rail and road have to offer. In terms of the benefits of intermodal transport, one plus one equals three.” He concludes: “While the intermodal transport is still in its infancy in South Africa – and it will be some years before we see the results of Transnet Freight Rail’s R205 billion investment in rail projects – I believe forwardthinking companies should make the move to intermodal transport now.”

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Unleashing trade into Africa Dr Jackie Chimhanzi, senior strategist at the Industrial Development Corporation, speaks to Simon Foulds on the challenges of supply chain management in Africa and the opportunities the continent offers business.

hat are the constraints that make supply chain management particularly challenging in Africa? Entities

operating in African markets face a number of challenges relating to supply chain management. The first relates to the manufacturing of goods. Manufacturing on the continent is nascent, with Africa being a net consumer of what it does not produce. According to the UN Conference on Trade and Development (UNCTAD, 2011), African manufacturing, compared to other developing economies, plays a very limited role in African economies domestically as well

as internationally. Africaâ&#x20AC;&#x2122;s share of global manufacturing value-added and global manufacturing exports is low at 1.1 and 1.3%, respectively. The reasons for low productivity are many and varied, but include poor backward linkages in terms of security of power and water supply, and poor infrastructure and road networks. The Programme for Infrastructure Development in Africa (PIDA, 2011) estimates that the African road access rate is only 34%, compared with 50% in other parts of the developing world, while transport costs are higher by up to 100%. This affects both the physical transportation of raw materials from source to factory as well as the distribution of

10 to 13% of African trade is with other African nations while 63% of trade by countries in Western Europe is with other Western European countries 44

TWA | May/Jun 2013

finished goods from factory to retail outlets. These high costs â&#x20AC;&#x201C; at different points along the supply chain â&#x20AC;&#x201C; render the final manufactured goods uncompetitive from a cost perspective, with the high costs typically passed onto the consumer. Africa is a highly fragmented market (54 countries) and companies need to be able to realise economies of scale by manufacturing for bigger markets beyond their own national borders. A key constraint, in this regard, relates to delays in moving goods across borders within and between regions. A 2012 World Bank report shows how African countries are losing out on billions of dollars in potential trade earnings every year because of high trade barriers with neighbouring countries and that it is easier for Africa to trade with the rest of the world than with itself. On average, only about 10 to 13% of African trade is with other African nations, while 40% of North American trade is with other North American countries and 63% of trade by countries in Western Europe is with other Western European countries (African Union, 2012). Delays at African customs are, on average, longer than in the rest of the world: 12 days in sub-Saharan countries compared with seven days in Latin America, less than six days in Central and East Asia, and slightly more than four days in Central and East Europe. So it would appear that infrastructure is an important foundation for industrialisation and manufacturing

SUPPLY CHAIN LOGISTICS

It is important for investors to begin to view supply chain constraints as investment opportunities, and we are starting to see this viewpoint change and, in turn, an effective and functioning supply chain cycle.

What should be done in dealing with the supply chain constraints in Africa? There are two parts to this. Firstly, it is important for investors to begin to view these supply chain constraints as investment opportunities and we are starting to see this viewpoint change. The World Bank estimates the African infrastructure deficit at US$93 billion (R839.46 billion); conversely, it is a US$93 billion investment case. Secondly, it is important that the investment climate is conducive for the willing investors. The great news is that we are witnessing more investment climate reforms by various African governments. This is applauded, but the pace of the reforms needs to accelerate in order to attract the necessary investments to minimise the identified constraints.

How do companies circumvent barriers? Typically, we are seeing private sector companies investing in adjacent industries in order to enable their core business. So companies in the commodity space, for example, are facilitating the

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movement of coal and iron ore from the mines to the port by investing in the roads and rail infrastructure themselves. There is also evidence of companies changing their business models in keeping with conditions on the ground in the various African countries they operate in. Rather than flying in raw materials that serve as inputs into the manufacturing cycle, more companies are finding supply partners in the local market. This has many advantages: margins are higher and the local economy benefits, as do local entrepreneurs. It also positions the company as a true development partner. The importance of on-the-ground partners on the African continent cannot be overstated. Forging local partnerships in Africa is a very practical and necessary thing to do whether or not legislation necessitates it. Finally, we are seeing more companies choosing regional hubs, with Kenya, Ghana and South Africa being popular in East, West and Southern Africa, respectively. The hub serves as the manufacturing base and goods are then distributed into the region. This hub-and-spoke model is set to gain in popularity and makes business sense from a cost perspective.

Where is the growth coming from? Sub-Saharan Africa is expected to grow by 5.6% in 2013, according to the latest figures from the International Monetary Fund (IMF), with 18 countries achieving at least 6%. The IMF recently predicted growth of 6.1% in 2014.

The sources of Africa’s growth are diverse. Contrary to common belief, commodities only account for a third of Africa’s growth. The growth is largely being driven by consumer goods and services, with consumer spending making up more than 60% of Africa’s GDP – this would include telecoms, banking and retail. Drivers such as rapid urbanisation and a rising middle class are contributing to the demand for consumer goods. According to the African Development Bank, the middle class will grow from 355 million in 2010 to 1.1 billion in 2060, while a McKinsey & Company report found that urban Africans spent more on clothing and food than those in Brazil, China and India on average. The rise of the African consumer has significant implications for supply chains and calls for the need to address constraints. While sub-Saharan African countries have experienced a marked acceleration in economic growth since the mid-1990s, it was really not until 2009/10 that the world realised this and Africa became the big media story and started attracting positive headlines. In 2010, we saw the Newsweek cover ‘How Africa is Becoming the New Asia’, and in 2011, the Economist’s ‘The Hopeful Continent: Africa Rising’ a complete reversal of tone from ‘The Hopeless Continent’. This African renaissance is the result of the interplay of a number of factors. First, because Africa has not traditionally been intricately linked to global capital markets, the impact of the global financial crisis on the continent was minimal. So while Western economies were severely affected and, indeed, continue to be, Africa was insulated. The major and unintended consequence of Africa weathering the crisis, in my view, is that perceptions of risk shifted enormously. Africa is now not necessarily perceived as the riskiest place to invest in. Moreover, not only is it not very risky, but it also offers the highest returns on investment of any region in the world. Second, the continent is generally more peaceful than it has ever been. There are fewer wars and conflicts today, and this bodes well for investment. There are also more peaceful transitions of power taking place on the continent. Overall, all these factors bode well for Africa.

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SUPPLY CHAIN LOGISTICS

Cashless travel through Africa

(From left) Beitbridge office, Chirundu branch, Groblersbrug office

RANSPORT FOREX is a management tool specifically designed for the transport industry. Through this online system operators are able to book fuel, cash or services, and pay for it on one easy-to-use website from the comfort of the office. Inter Africa has been developing the Transport Forex system since 1999. Willie Esterhuizen, MD of Inter Africa Zambia, says: “We have streamlined and perfected the system through trial and error, and are able to offer customers an indispensable tool to improve and maximise the management of

their transport fleet. For the first time, owners will be in charge of the truck’s expenses, where they fill up with fuel, how much fuel they put in at different locations, the exchange rate at which they exchange money and the amount of cash their drivers need to carry. “There is no longer the need to give your driver a huge bag of money for his trip, only to have it reported lost or stolen. The driver simply picks up cash along the route as needed. No need for trucks to get stuck at border posts, because they don’t have enough cash to pay for their duties or fees. The driver can pick up the appropriate amount

at each border post to pay the duties and fees needed to cross. No need to have a truck run with full tanks of fuel, only to have it stolen. The truck can put fuel as needed along the route and customers make the payments from their office. With participating filling stations along all the major routes, trucks can carry just enough fuel to reach the next station. This way there is not enough fuel in the tanks to ‘lose’ some and still reach the next station. “All of this can be done at the best exchange and transfer rates. We strive to give an aboveaverage service at realistic fees. Payments are made in real time and there are no transfer delays, irrespective if the truck is situated in South Africa, Botswana, Zimbabwe, Zambia, Tanzania, Mozambique, Namibia or the Democratic Republic of the Congo.” Esterhuizen concludes: “Transport Forex is the only logistical support system that covers most of Southern Africa’s transport corridors – the only transport management tool that takes the headache out of management.”

SUPPLY CHAIN LOGISTICS

Leveraging technology for efficient supply chain

N INTERNATIONAL supply chain requires the management of not only the physical movement of goods from production to consumption, but also addresses the associated financial flows and legal compliance requirements. Essential to this is the accompanying data, whether used for internal processing or simply to provide transparency to the pertinent users. Jonathan Sims of Johannesburg-based CoreFreight Systems states: “We do not believe that a single software application or provider can deliver the optimum functionality across each of the specialised areas of operation in this complex environment. “The most efficient supply chain will make use of a series of specialised individual software applications, which collectively provide the overall solution.”

With this in mind, the objective at CoreFreight is to provide the most effective mechanism for managing the South African leg of forwarding and clearing operations integral to the local import and export process, whether South Africa is the point of destination or origination of cargo, or simply the country of transit for goods flowing to or from the African continent – leveraging technology to contribute to the efficiency of the South African supply chain. Sims says: “There is sufficient complexity in this alone without trying to address other software elements of the chain. For example, it is well recognised that South African retailers are expanding their operations across the continent, taking

advantage of our geographic location and experience combined with the relatively high growth forecasts for the region. From our perspective this implies a requirement for systems that allow them to optimise the forwarding and clearing process from South Africa, from initial import, managing bonded goods held for onward transport to foreign retail outlets, generating the Duty Drawback claim in respect of imported goods subsequently exported to meeting the SARS Automated Cargo Management (ACM) reporting requirements and producing files for efficient data interface into the ASYCUDA system (Automated System for Customs Data) used by the customs authorities in the countries of destination. “The ability to interface data with other applications in production along the chain is as important as the internal functionality within the CoreFreight software itself and we work hard at this aspect of our service. We address this through the CoreXchange module, which has proven Jonathan Sims, to be a robust mechanism Johannesburg- for transferring data both in based and out of the specialised CoreFreight Systems CoreFreight database.

South African Freight Forwarding & Customs Clearing Made Easier

SUPPLY CHAIN LOGISTICS DR DINESH KUMAR*

Trading without borders The key to unlocking Africa’s economic potential Ongoing uncertainty in the global economy has drawn more attention to economies on the African continent and their potential to provide higher returns for investors.

HE AFRICAN CONTINENT has over one billion consumers and is projected to house a middle-class income that would rival that of India. Couple this with the fact that there will be more than 250 000 US dollar millionaires on the continent in the next five years, and it comes as no surprise that Africa is a continent with a tremendous amount of ‘untapped’ economic potential.

But why haven’t we been able to unleash this? The simple answer is that African nations continue to export raw materials and import finished goods from outside the continent, as opposed to trading, manufacturing and adding value within their borders or with other African nations. In order to understand how to unlock Africa’s economic potential, we need to understand the deeper issues hindering intraAfrican trade.

Investing in inter-country transport infrastructure The 2010 African Union Summit in Kampala highlighted transport infrastructure backlogs, technological constraints, and inefficient and inadequate border processing as some of the key issues facing economies on the continent. For some, these issues are more pertinent than others and, in spite of a few nations having adequate intra-country transport networks, underdeveloped inter-country networks

TWA | May/Jun 2013

remain a concern, particularly for landlocked countries with greater distances to market. With growing congestion at border posts, risks associated with the transportation of goods by road and the damage caused to the road network by trucks, governments also need to rely more on rail and air freight networks. Sadly, the lack of viable railway networks and cost-effective air freight between major ports and inland countries has been one of the stumbling blocks for intra-African trade over the years. Investing in transport infrastructure should therefore be seen as paramount to developing trade links to facilitate regional production chains, which will allow raw materials to be processed and traded within the region. In recent years, the continent has done well to strengthen inter-country links, particularly along the north-south and eastwest transport corridors. Transnet’s recent drive in developing inter-country freight rail transport infrastructure is testament to this, with the state-owned enterprise entering into an agreement with the copper-rich nations of Zambia, Zimbabwe and the Democratic Republic of the Congo to facilitate inter-country trade and movement of export material through its port in Durban. Historically, though, much of the

development has been driven by Chinese investment in Africa. As Africa’s largest trading partner, China has made a concerted effort to help the continent achieve the ‘African dream’ by unlocking opportunities through cumulative investments of over US$15 billion (R138.19 billion). The downside, though, of many of these infrastructure investments is that they are financed primarily through public-private partnerships, due to a lack of government

Breaking down the barriers for inter-country trade Investing in infrastructure development cannot be viewed as the sole driver for enhancing intra-African trade and needs to be addressed in conjunction with reducing trade barriers across different countries on the continent. At present, industries in various countries are more regulated than others, which forces countries and businesses to create separate supply chains, thereby increasing the costs of trading on the continent. Reducing these barriers to market is crucial to facilitating the easier movement of goods, labour and capital within Africa, allowing businesses to benefit from the cost-effective manufacturing of products in distant locations and facilitating the trade to countries that were previously inaccessible. Breaking down the barriers for intra-African trade will not only help diversify African economies, but will also benefit the free trade areas of the East African Community, the Common Market for Eastern and Southern Africa, and the Southern African Development Community in the short terms and pave the way for a Continental Free Trade Area over the next five to 10 years.

Lowering transportation costs is vital to intra-African trade and one of the reasons governments are exploring initiatives to enhance capacity utilisation and reduce end-user fees financing, resulting in end-user fees that only add to already high inter-country transportation costs. Lowering transportation costs is vital to promoting intra-African trade and is one of the reasons that governments are exploring initiatives to enhance capacity utilisation and reduce end-user fees.

* Dr Dinesh Kumar is an associate director and head of Supply Chain & Procurement Management Consulting at KMPG.

AIR CARGO AFRICAN GROWTH

Africa grows as international air freight markets weaken 2012, with only the Middle East and Africa showing an expansion. Asia-Pacific carriers are the largest players in air freight (together they comprise 38.5% of the market). With a 3.3% fall compared to the previous year, this region showed the greatest weakness in terms of actual freight volumes. The US and Europe, however, had larger percentage falls (5.2 and 4.0% respectively), but on a smaller market share. Global air freight volumes are now only 1.5% above the October 2012 low point, down from the 3.5% rise that had been reached in January. Tyler states: “After adjusting for seasonal factors, it is clear that the improving trend witnessed in the fourth quarter of 2012 has been reversed. The global load factor slipped marginally to 46.7% and capacity fell by 0.3%. “African cargo markets grew 3.2%, benefitting from strong growth in regional developing economies.

Air freight figures for March show a slowdown on all markets except the Middle East and African markets, which had a slight increase.

ATA’S DIRECTOR GENERAL and CEO, Tony Tyler, says: “The March decline in air cargo is most likely a temporary stall. The fundamentals for a sustained improvement in air cargo volumes are in place. Business confidence continues to signal forthcoming expansion, and the solid increase in new export orders seen in 2013 should boost air freight in the coming months. Much of the current weakness is coming from Asia-Pacific airlines. While the region is economically strong, the economies of its trading partners are not. The eurozone is showing renewed weakness and the negative impact of US budget cuts is yet to be fully measured.” Global freight tonne kilometers (FTKs) were down by 2.3% in March 2013 compared to the same period in

Tony Tyler, director general and CEO, IATA

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