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Agenda

1. Railroad Africa’s Role in the National Commercial Port Policy.

2. Inland Ports/Terminals

3. Commercial Port Users

4. Policy Recommendations - Consultative Committees

5. Competition - Ports

6. Competitive Position of SA - Rail Transport

6.1. Service Levels 6.2. Freight Dynamics6.3. State Land

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Draft White Paper

on

National Commercial Port Policy

Who is Railroad Africa and what role do we play that directly connects us to the White Paper on Port Policy?

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Railroad Africa is a Container Logistic Company providing vital services via Rail and Road, in and out of all Coastal Ports and Inland Terminals. We are one of the main users of the Commercial Ports and Inland Terminal for the Conveyance of Import and Export cargo.

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Railroad Africa

Rail

Road

DocumentationTracking Monitoring

Warehousing

Services Ex Commercial Port Inland Ports /Terminals

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Railroad Africa

Shipping Lines

ImporterClearing & Forwarding Agents

Exporter

Intermodal Customers

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- Portnet

- Spoornet

- Owner-drivers

Main Services Providers

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Railroad Africa

Spoornet

Portnet Ownerdriver

Main Services Providers

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Durban

Port Elizabeth Cape Town

JohannesburgPretoria

Branch Offices

Railroad Africa

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Main Inland Ports/Terminals

Ministerial Foreword - Page 5 - Paragraph 2

1. We have carefully reviewed/analysed the Draft White Paper on the National Commercial Port Policy and fully acknowledge the major role the Commercial Sea Ports play in our transport industry, however our concern is the exclusion of the Strategic Inland Ports & Terminals such as City Deep & Pretcon Terminals from this Draft White Paper.

2. Inland Ports are the gateways to the Sea Ports as well as to strategic regions & industries. These are vital hubs in the transport system.

3. Infrastructure and development of the Inland Ports should

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not be isolated by not being included in the Port Policy document. It is equally important to have an efficient Inland Port/Terminal as well as Coastal Ports.

4. Governments focus is on reducing long distance traffic by road. To achieve this we must have efficient Inland Ports/Terminals.

5. We need to create one seamless operation linking the Inland Terminals to the Coastal Ports using the same computer systems.

6. We are of the firm opinion that the main Inland Ports/Terminals must be included in the Port Policy document.

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We refer to Page 10, point “2”

“Enabling customers requiring transport for people or goods to access the transport system in ways which best satisfy their chosen criteria.”

and Page 13, bullet “3”

“Objectives of the National Commercial Ports Policy”

“To enable Port users to access to Port system in the most efficient way possible.”

Commercial Port users “Strategic Transport Goals”

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And page 20, point 7 - paragraph 2

“It also translates into a demand for ready access to the transportation information that is needed by all parties to the various transactions involved in trade”.

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Who are the main Port users?

The main Port users are:-

- Importers

- Exporters

- Shipping Lines

- Intermodal Companies

- Clearing & Forwarding Agents

- Others

Port Users

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Intermodal Companies

Others

Exporters

Shipping LinesClearing & Forwarding Agents

Importers

Port

Port Users

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Why is it important to determine who the Port users are?

1. Portnet is currently developing pricing policies that make the Shipping Lines the sole users of the Port. “User pay Principal”

i.e. Portnet is forcing the other users to pay the shipping lines directly for all landside costs.

2. Currently the Port users, as described earlier, pay for all land side services provided by the Port directly to the Port.

3. The new pricing policy excludes all other users and is in conflict with the goals and objectives of the National Port Policy.

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4. The current application of the pricing policy will create monopolies between Terminal Operators and Shipping Lines whose costs are paid for by the other Port users as previously described. Port users must be given the choice of how payment is made for landside costs.

5. Currently we face a serious problem with communications and/or tracking. The proposed pricing policies will further compound said problem by restricting vital information to the industry.

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6. Portnets current tracking system is limited and restricted to Shipping Lines only. The system does not cater for the needs of the different customer groups, i.e. Importers, Exporters, Clearing and Forwarding Agents, Intermodal Companies.

7. The information required can easily be made available by the use of the Internet/EDI.

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Consultative Committees - Page 18, item “2”

It is our suggestion/recommendation that the Consultative Committee involves all Port users and not only Shipping Lines and must include Labour Committees.

Policy Recommendations:

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National Development Strategy for Commercial Ports -

Page 18, item “3”

Competition amongst Ports is vital. This will improve Productivity and drive prices down. We are also pro intra Port competition.

E.g. Volvo Traffic - switched from Durban to Port Elizabeth due to service levels. Government must not restrict Port to Port Competition.

Competition:

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Challenges we face -

Competitive Position of SA - Rail Transport

Page 22 - Section 3.7

1. It is very important for the forum to be aware that Spoornet Intermodal have suggested a proposed increase of up to 30% for containerised traffic without any discussion and motivation for such increases. This will impact negatively in our competitiveness in the Global Market.

2. It is our recommendations that increases, are market related and in line with item “3.7”, page 20, of the Port Policy.

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3. The design/formulation of the current pricing policy by Spoornet General Freight Business for containers does not allow Small Businesses to grow and it continues to protect Previously Advantaged Companies.

4. We want to see the leveling of the playing fields that create equal opportunities for Intermodal Companies like Railroad Africa; after all we are the marketing agents of Spoornet.

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Service Levels - Inland Ports/Terminals

1. Working hours of the main Inland Terminals are creating impediments/restrictions.

1.1. No access to computer systems - Manpower over weekends

1.2. Access to information between Spoornet and users is not on “line” and not easily available.

2. Shortages of Rail-wagons have resulted in many short-shipments.

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3. Derailments have played havoc with our Transport System. The direct cause of this is due to poor previous planning and the lack of infrastructure investments.

4. We must create a consultative committee for Rail/Port users to discuss matters of common concern.

6. We are experiencing delays in obtaining new rail rates of up to 5 days for all traffic.

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6. Too many Rail containers are being pilfered.

7. Claims are not being processed with speed. Delays of up to one year are being experienced.

8. The CEO of Spoornet is a man who has a vision for the future. Therefore, it is critical that his vision is accepted/implemented by the structure of Spoornet.

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1. Freight Dynamics is becoming a destructive competitor in the Transport Industry by reducing Transport rates resulting in safety standards by existing Road Hauliers being compromised to stay in business. We consider this to be an abuse of State assets to gain market share. Once again this is destructive competition. It is our opinion that Freight Dynamics should be quietly removed from the Market.

2. We understand that Freight Dynamics have recently approached Spoornet for a Rail contract. We also consider this to be destructive competition and must not be encouraged.

Freight Dynamics

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State Land

1. We are concerned that the lease of Prime State land (Transnet), in close proximity to Ports and Rail Terminals, are in the hands of an individual (Company), and needs to be investigated.