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Special feature –Bulk Cargo
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Special feature – Gauteng
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FREIGHT & TRADING WEEKLY
For import / export decision-makers FRIDAY 7 September 2018 NO. 2311
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Australia’s capital is fine-tuning the testing phase of a human mobility mobile app that is geared towards seeking revolutionary alternatives for capacity constraints, and the potential solutions could also be applied to freight.
Speaking at a Transport Forum at UJ last week, University of Sydney professor David Hensher explained that one of the key components of the new concept, Mobility as a Service (MaaS), had to do with fresh thinking around empty leg utilisation.
The founder and director of the university’s Institute
of Transport and Logistics Studies explained that MaaS would be rolled out from April next year and, through a participating network of 500 000 trial users, would essentially seek to address fundamental inadequacies around Sydney’s public transport system.
He said that the MaaS principle of “trip-chain point-to-point efficiency” served to solve the same complicated challenges of the local logistics industry, namely figuring out how to fill empty space in order
New solution addresses empty leg dilemma
University of Sydney professor, David Hensher.
Liesl Venter
South Africa is over-subsidising its neighbours to its own detriment, paying around R30 billion a year more than it should thanks to the formula used in the South African Customs Union (Sacu).
As a result manufacturing, as a key driver of economic growth in the country, is being hit hard.
“South Africa really got a duff deal out of Sacu,” Dean Macpherson, DA shadow minister for trade
and industry, told delegates at the annual South African Association of Freight Forwarders (Saaff) conference in Cape Town last week.
He said South Africa was technically subsidising Botswana, Lesotho, Namibia and Swaziland
to boost their economies, allowing them to send goods into the country duty-free. Several other trade deals with other regional countries were taking the same route, he said.
“The Sacu relationship needs to be investigated to create a mutually beneficial
arrangement,” he said. “We have to re-negotiate this trade agreement which was signed a long time ago. You cannot tell me that Botswana, for example, is the same country that it was 20 years ago. In some cases and sectors some of these countries are more
Local manufacturers lose out in ‘unfair’ Sacu trade deal
developed than South Africa.”
Macpherson said South Africa’s agreements with Mauritius were also concerning and impacting the local manufacturing sector. “The clothing and textile industry in this country is under severe pressure and contracting yet we continue to import from countries like Mauritius duty free.”
He said what was even more concerning was that Mauritius had a limited number of looms to produce fabric yet they were shipping more garments to South Africa under the ‘Made in Mauritius’ label than there was material in the country – all duty free under regional trade agreements.
“There is only one possible answer to how Mauritius is getting all that clothing and that is that China is transhipping through Mauritius where it is being re-labelled. The problem is that customs is so under-resourced
To page 16To page 16
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DUTY CALLS
These statements have been edited because of space constraints. For the full versions go to ftwonline.co.za. Note: This is a non-comprehensive statement of the law. No liability can be accepted for errors and omissions.
Online
Riaan de Lange ([email protected])FREIGHT & TRADING WEEKLY
Publisher Anton Marsh
EditorialEditor Joy OrlekDeputy Editor Eugene GoddardAssistant Editor Liesl VenterJhb Correspondent Adele MackenzieDbn Correspondent Lyse CominsJournalist Nicole JacobsPhotographer Shannon Van Zyl
CorrespondentsAfrica/ Port Elizabeth Ed Richardson Tel: (041) 582 3750Swaziland James Hall
Advertising Advertising Yolande Langenhoven Lorraine Esterhuizen Co-ordinator Tracie BarnettDesign & layout Zoya LubbeePrinted by JUKA Printing (Pty) Ltd
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SPECIAL FEATURE
AFRICA
Rev up your Africa businessTo promote your services in this special feature contact [email protected]
Issue Date: 2 November 2018
Rebate Permit Applications - Comment due On 31 August the International Trade Administration Commission of South Africa (Itac) called on importers to submit rebate permit applications on a range of rebate items. The permits for the rebate provisions must be applied for and submitted before the goods concerned are shipped.
1. The importation of structural steel in the form of I sections.
2. The importation of structural steel in the form of H sections.
3. The importation of screws, bolts, coach screws, screw hooks, rivets, cotters, cotter-pins, washers (including sparing washers) and similar articles, of stainless steel.
4. The importation of new pneumatic tyres, of a kind used on motor cars for organised motorsport.
5. The importation of hollow profiles of aluminium, of a cross-sectional dimension for the
manufacture of condensers and evaporators for the motor vehicle air conditioning equipment.
6. The rebate of the safeguard duty on flat-rolled products of iron or non-alloy steel not further worked than hot-rolled; flat-rolled products of iron or non-alloy steel, not in coils, not further worked than hot-rolled with a yield strength of 700 MPa or more; flat-rolled products of other alloy steel, not further worked than hot-rolled; and flat-rolled products of other alloy steel, not in coils, a Brinell hardness of 425 HBW or more.
7. The importation of automotive components for use in the manufacture of original components for the supply to a specified motor vehicle manufacturer registered under rebate item 317.03.
8. and 9. The importation of motor vehicles principally designed for the transport of physically disabled persons, including station wagons, adapted or to be adapted to be used for the transport of
physically disabled persons.10. The importation of
flat-rolled products of iron or non-alloy steel not further worked than hot-rolled; flat-rolled products of iron or non-alloy steel, not in coils, not further worked than hot-rolled with a yield strength of 700 MPa or more; flat-rolled products of other alloy steel, not further worked than hot-rolled; and flat-rolled products of other alloy steel, not in coils, a Brinell hardness of 425 HBW or more.
11. The importation of stranded wire, ropes and cables of iron or steel, not electrically insulated; and plaited bands, slings and the like, of iron or steel, not electrically insulated.
12. The importation of flat-rolled products of other alloy steel.
Digital smart cards rebateThe South African Revenue Service (Sars) on 31 August announced the creation of a temporary rebate facility on digital smart cards.
Hot-rolled carbon steel plates safeguardOn 31 August Sars announced the substitution of safeguard items to exclude certain hot-rolled carbon steel plates from being subject to safeguard duty.
Hot-rolled carbon steel plates rebate Sars on 31 August 2018 announced the insertion of rebate items to create rebate facilities on certain hot-rolled carbon steel plates.
Duty Calls WatchlistComment on the alleged dumping of clear f loat glass originating in or imported from Saudi Arabia and the United Arab Emirates (UAE) is due by 17 September.
FRIDAY September 7 2018 | 3
FTW4150SD
Adele Mackenzie
Gauteng’s first new highway in 40 years, the PWV15, is at least two years away from construction, FTW has learnt.
This after director of local property development company NT55 Investments, Francois Nortje, raised alarm bells over the viability of the project as well as the timelines attached to it by the provincial government.
FTW reported in May that MEC for Transport, Ismail Vadi, had confirmed that construction of the PWV15 was expected to start next year. But this is “impossible”, says Nortje.
He believes there are several hurdles that need to be overcome before construction can even start, including an environmental impact assessment study and a detailed design by a civil engineer, whom FTW understands has yet to be appointed.
Nortje’s land surveyor overlaid all the planned PWV road alignments using Google Earth software to create a full picture of all the highways (from PWV1 to PWV20) that were identified in 1983. By doing this, Nortje was able to
identify several complications.“Firstly, a portion of
the PWV15 – as drawn up in 1983 – is situated in a floodline (where it intersects with the N3) and on the R21/N12 intersection it is smack in the middle of a wetlands conservation area. Should a road be constructed there, it would need to be built about 10 metres above the floodline and that will be very costly,” he pointed out, adding that
conservationists were also likely to raise major objections as the wetlands would be affected.
Nortje is a registered interested party in the development of the PWV13 highway which is an extension of the
PWV15 and he has threatened legal action to ensure he be registered as an interested and affected party to construction of PWV15, including the stretch between the N12 and the R21 in the area of the Atlas Road/Great North intersection.
“I have a large development in the area and I openly admit it’s in my best interests to see alternative freight and logistics hubs created there,” he said.
With a flurry of e-mails and other documents (seen by FTW) sent between Nortje’s legal representative and the
Gauteng government – calling for clarity on the timelines and the planning processes, amongst others – last week Nortje received confirmation that it would take at least two years before construction would start on the PWV15.
Dr Louw du Plessis, chief engineer in the Gauteng Department of Roads and Transport, cautioned that MEC Vadi’s statements could be “misinterpreted”, confirming that the basic preliminary design of the PWV15 from Pomona to the N3 had been done in 1983.
“Before we can construct this road we need to review the preliminary design and do a detailed design,” he said, pointing out that the department had yet to appoint a civil engineering consultant.
Du Plessis noted that part of the legal requirements of the detailed design was a full environmental impact assessment (EIA) which includes a detailed study into wetlands and a public participation process which would include all affected property owners.
“I estimate that after the appointment of an engineering consultant it
will take approximately 12 months for him to complete the preliminary review , the detailed design, and produce construction tender documentation.” He said that the earliest starting date for construction would be around July 2020. “The public participation process will probably start around January 2019,” he said.
Nortje’s own estimation of the process is at least four years, and if there were environmental objections, it might never be built, he said.
New Gauteng highway ‘at least two years from construction’
Effective risk management, including security and safety in the international supply chain, remains a central theme in the global trading environment – and cutting edge technology and harmonisation are key to achieving it.
Global Trade Solution (GTS) founder and managing director Louise Wiggett told FTW that the benefits of implementing a full Authorised Economic Operator (AEO) safety and security programme had been clearly demonstrated to close to 2000 delegates attending the World Customs Organisation (WCO) AEO conference held in Kampala, Uganda earlier this year.
The conference highlighted the substantial trade facilitation benefits that could be achieved when member states within a customs union worked together and signed agreements to adhere to policies of mutual recognition. Land-locked Uganda, for example, had reduced goods transit times from an average 25 to 30 days from the port of Mombasa in Kenya to Kampala to an average five days, while safety and security had not been compromised.– Liesl Venter
AEO programme slashes transit times
Many of those touting the viability of the highways are not fully aware of the potential pitfalls. – Francois Nortje
“
4 | FRIDAY September 7 2018
GAUTENG
Eugene Goddard
British politician Benjamin Disraeli said that you get ‘three’ types of
untruths: “Lies, lies, damn lies, and then you get statistics.”
But recent trade data released by Stats SA show why the devil is in the detail regarding Gauteng’s slight economic lead over the rest of the country, and that’s no fiction.
According to latest figures by the local statistics authority, the province’s economy grew 1.7% in 2017, just over a percent stronger than what was achieved nationally.
Add to this the SA Reserve Bank’s most recent official forecast about the global economy growing at 4% with South Africa lagging behind at around 1.2%, marginally better than the previous figure of 0.6% – and the country’s economic prospects appear to be falling woefully short of increasing demand.
To make matters worse, said economist Mike Schussler, was the worrying trend of population growth consistently outstripping the country’s
underperforming economy, and a rapidly out-of-control densification development that’s especially noticeable in Gauteng.
“Projections are that the country’s national population in the immediate future will be growing at around 1.7%, but in Gauteng this figure will be even higher because of ongoing migration into the city.”
It was a kind of a paradox, Schussler said, that the “bright lights” of the province’s economic performance still acted as a drawcard for opportunity-seekers despite trade data revealing that Gauteng’s economy had been contracting year on year.
“We have had five years of growth equal or below the population growth. We are falling further and further behind the rest of the world at the moment and we need to turn that around.”
How is this economic about-face supposed to happen though?
Schussler believes through determinedly driving Gauteng’s key industrial sectors – mining and manufacturing.
“They are the principal key points of our provincial economy and fuel other sectors.
Although the manufacturing of cars, chemicals and food appears to be in relatively good health, specific industry manufacturing, particularly relating to the mining industry, is not doing well. Unless manufacturing in this sector takes off, Gauteng’s economy will remain sluggish.”
Schussler added that it was somewhat encouraging to see the province’s services industry doing fairly well, in particular the finance sector.
“Our services economy, with the exception of the banks, and perhaps advertising, hasn’t done brilliantly over the last decade or so. We have seen accounting firms, for example, come under a lot of pressure.”
All considered, Gauteng risked losing its status as an economic powerhouse province for the region, Schussler warned.
“We live in an industrial heartland, a services heartland, and also a logistical heartland, but we need to perform. We need to get our commodities sector going so it can fuel other sectors.”
He said that for more than a decade now it had been observed how businessmen appeared to be looking elsewhere.
“Investors are looking at Botswana, Namibia, Lesotho, and even Zambia, but they are not looking at us.
“Unless we can turn that around and become much more
attractive than we are at the moment, Gauteng will
remain a province that’s in crisis.”
Gauteng needs to rediscover winning ways
Investors are looking at Botswana, Namibia, Lesotho, and even Zambia, but they are not looking at us.– Mike Schussler
“
Transport authority set for launchLegislation around the establishment of a new Gauteng Transport Authority (GTA) is currently being finalised with the authority expected to be operational by the first quarter of 2019.
While initially established to address public transport issues, Gauteng Transport MEC Ismail Vadi said that GTA’s function would involve strategic planning relating to transport infrastructure within the city region, which would overlap with logistics infrastructure.
Vadi introduced the Gauteng Transport Authority Bill (2018) for public comment earlier this year.
“Responsibility for planning, coordination, optimisation, rationalisation and facilitation of transport functions, authorities, systems and resources within the province will rest with the body once up and running,” said Vadi.
Gautrain Management Agency CEO Jack van der Merwe has been tasked with spearheading the GTA which will be governed by a board of 12 directors who will represent the authorities it is coordinating.
The directors will include six representatives of the provincial and municipal government and six transport specialists with expertise in transport planning, transport infrastructure development, and road and rail transport operations.
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GAUTENG
The overall legality of the e-toll system will be put to the test in a consolidated case involving four major claims.
Both the South African National Roads Agency Limited (Sanral) and the Organisation Undoing Tax Abuse (Outa) agreed to this test case scenario during a recent management discussion between their respective legal teams and a Pretoria High Court judge.
“Outa lawyers are currently defending around 1 000 cases and for us and Sanral to go to court with this many cases is just too impractical, it costs too much,” Outa’s transport portfolio manager, Rudie Heyneke, told FTW. “If we had to do that, we’d be hearing one case now and then two weeks later a very similar case.”
He said that the two organisations had chosen the four cases as they involved a number of important elements
that both were looking to cover in a single legal setting.
“This includes drivers or owners of vehicles who registered and paid, but stopped paying, those who registered but never paid, as well as those who haven’t registered or paid,” said Heyneke.
However, he noted that the agreement to go ahead with the single test case was not cast in stone as yet and no formal date had been assigned for hearing the case in court.
“Until we receive a formal date, a High Court judge has been appointed as the case manager and will be able to make smaller rulings on certain
issues,” he said. “Additionally, Sanral will be issuing summonses until that date.”
Heyneke said that once the date for the court hearings had been finalised, the legal process would enter into the discovery
phase – where all evidence would be presented to the court.
An informal agreement between the court, Outa and Sanral has also been reached regarding the involvement of the transport minister, finance
minister, South African Revenue Service commissioner, and possibly the environmental affairs minister as they were a part
of the declaration of the e-toll roads as toll roads.
Commenting on whether he believed that there would be a positive outcome for Outa from the test case, Heyneke said that while it was still early days, the organisation would not have engaged in litigation if it was not confident it had a case.
“We are still of the opinion that the correct procedures were not followed in the declaration of the toll roads,” he added.
“We also have a much stronger case now than years ago because we have more available information."
Meanwhile, Heyneke pointed out that the e-toll system could be scrapped by government itself as the Gauteng ANC had recently
made a submission to national government to do so.
“There are two ways that government can scrap the system, they can either reverse their decision to declare those roads as toll roads or they could lower the rate of the toll roads to R0 and keep the regulations declaring the road a tolling road,” he added. “However, if they went ahead with the second option, government would be able to reintroduce the tolls at any time.”
He said that if government were to scrap e-tolls, this would only bring with it new questions like: would those who paid the tolls get their money back and would Sanral still be able to send summonses for outstanding payments.– Nicole Jacobs
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Outa and Sanral to go head to head in court challenge
We have a much stronger case now than years ago because we have more available information.– Rudi Heyneke
“
6 | FRIDAY September 7 2018
GAUTENG
In a bid to address the logistics industry skills deficit and attract more school leavers to the industry, Gauteng-based specialist freight and logistics training company, Metro Minds, has launched a new GAP year programme.
“The programme focuses on exposing school leavers to the different disciplines of any business, aiming to ignite a new thinking process with exposure to problem-solving, decision-making and serving the larger society – the soft skills that school leavers are not exposed to during their
secondary education,” says Metro Minds CEO, Juliette Fourie.
The GAP year was designed to provide school leavers with a choice of careers in the freight and logistics industry, as well as expose them to the realities of the workplace, and highlight opportunities in new venture development, says Fourie.
“The GAP year is followed by a simulated industry-related qualification which focuses on industry-specific qualifications." She says the simulation portion of the course is completed within
a consecutive three-month period following direct exposure to the workplace.
Fourie points out that Metro Minds has been encouraging companies to look at simulation solutions for graduates entering their workplace to fill the gap between the academic and theoretical knowledge they have and the lack of industry knowledge, decision-making, problem-solving and critical thinking skills.
Largely based on its simulation programmes, Metro Minds has, to date, won three innovation awards.
“We continue to invest in new and innovative ways to implement better learning solutions,” says Fourie, noting that its new offering includes an interactive digital learning experience which incudes simulation. “We recognise that people want to be exposed to self-taught processes but still experience something practical with valuable human engagement.”
Fourie adds that the online and digital experiences are an extension of Metro Minds’ learning methodologies. “It does not replace our
popular contact sessions but, instead, becomes part of our accelerated learning process,” she says.– Adele Mackenzie
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Liesl Venter
If Gauteng scraps e-tolls government will have no alternative but to use the general fiscus to fund road
infrastructure – including the already upgraded provincial freeway.
According to Stephan Krygsman, a professor of logistics and transport economics at the University of Stellenbosch, the outstanding debt on the Gauteng Freeway Improvement Project (GFIP) would still have to be serviced either through the fuel levy, or the other taxes that feed into general revenue such as income tax, VAT and company tax.
“Either way, South Africans will pay,” he told FTW. “One option could be to consider an additional amount on each litre of fuel sold in Gauteng – so an additional fuel tax in that
province – to fund the toll roads. But the e-toll costs are a given.”
Krygsman said that despite resistance to the Gauteng
system, toll roads were still potentially good options for road infrastructure funding in general. “E-toll, however, is not the way to do things,” he said.
Part of the problem, Krygsman explained, was that the user-pay principle
was completely misunderstood in South Africa.
“This principle implies that users of road infrastructure pay for the cost related to their
use. These road use costs include infrastructure and operations, environmental and congestion costs,” he said. “With user-pay the road user charge should then reflect these costs. Tolls are used to accelerate the delivery of needed infrastructure so they typically allow a component for paying off the capital. But they still need to represent a realistic cost. The problem is no one has done an analysis of what users should pay and what we are paying.”
Considering that South Africans already pay for road use through the fuel levy, adding another cost has been problematic.
“Whether the user is paying enough, or too little, or worse, too much, we really do not know,” he told FTW. “I do not think government has a policy on toll roads.”
Most transport economists say that the country is in dire need of a detailed road funding policy.
It is believed such a document is currently in the process of being prepared.
“This policy will need to be very specific about toll roads,” said Krygsman. “One must not forget that it is not in the mandate of the South African National Roads
Agency Ltd (Sanral) to charge for congestion. The words congestion or environmental do not feature in the Sanral act.”
Krygsman, who has done extensive research on road
infrastructure payment, said as part of ongoing research they had called for
input on how people wanted to pay for road infrastructure
and the responses received were indicating that
in general South Africans were
not opposed to paying but they wanted it to be fair.
SA in dire need of detailed road funding policy
Either way, South Africans will pay. One option could be an additional amount on each litre of fuel sold in Gauteng.– Stephan Krygsman
“
The programme focuses on exposing school leavers to the different disciplines of any business.– Juliette Fourie
“GAP programme exposes school leavers to logistics
FRIDAY September 7 2018 | 7
GAUTENG
Technology disruptors such as data visualisation and data-rich applications are empowering small to medium logistics operators in the province.– Renko Bergh
“
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With current economic pressures showing no signs of abating, more and more transport operators and warehouse owners are recognising the key role played by logistical software in their business efficiency.
“Software implementation should not, and cannot, be seen as another cost driver in the business but instead as the means to drive your business forward and keep a competitive edge in a cost-driven environment,” Renko Bergh of Forte Supply Chain Consulting.
Bergh noted that technology disruptors such as data visualisation and best-of-breed applications were empowering small to medium logistics operators in the province which was reason enough for owners to start embracing technology more and implementing policies for digitalisation.
“In other words, the simple act of providing reports to executives and upper-level managers could be considered a form of data visualisation – and thus the access to real-time and secured data, feeding the visualisation, will create a fundamental improvement in reporting,” he added. “Such policies can be scaled for implementation, reporting on live data instead of historic or recaptured data from manual sheets into a source system, like transport or warehouse management tools.”
He said that those who were not preparing for the future, were likely to
remain in the past.“At Forte Supply Chain
Consulting, we understand the challenge of digital disruption and change; therefore our focus is to combine people, processes
and
systems with implementing software within the supply chain,” said Bergh. “We bridge the gap between
software developers
and industry expectations of software.”– Nicole Jacobs
Disruptors empower SMMEsAs part of its efforts to accelerate projects such as converting gravel roads to surfaced roads, the Johannesburg Roads Agency (JRA) last month launched a newly built asphalt plant in the south of the city.
Goodwill Mbatha, acting MD for the roads agency, said the new plant would produce asphalt more quickly and safely. “This will speed up service delivery, and most importantly, its use of Nomex bag filters will eliminate environmental pollution that was persistent with the old asphalt plant.”
Executive mayor of Johannesburg, Herman Mashaba – who officially launched the new plant – said that the volume of asphalt produced would be more than doubled from an average 80 tons per hour to 200 tons per hour.
Asphalt plant opens
8 | FRIDAY September 7 2018
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Tel: (031) 360-7811, Fax: (031) 332-9291, E-mail: [email protected]
GAUTENG
Burning Issues
Slow manufacturing momentum
labour unrest
lack of vision
Eugene Goddard
Logistics in Gauteng is in danger of having its sector strength eroded
if burning issues such as slow manufacturing momentum, labour unrest, and lack of vision to drive progress aren’t adequately addressed.
That’s the view of economist Mike Schussler who told FTW “sea freight into Durban harbour has been very modest and although most of it comes to Gauteng, we haven’t seen much of it on the N3. We don’t know whether it’s because of civil action and truck burning but it’s concerning nonetheless.”
What is clear is that “the N3 with all its strikes and stoppages has seen a tremendous drop in traffic. Some of it has gone to the N11, partly due to
companies wanting to avoid paying tolls and because of a general desire by travel and transport to look for alternatives.”
The fact that the province’s mining and manufacturing industries aren’t firing on all cylinders, mainly because of poor economic growth and related labour issues, is not making matters any easier.
In addition, it’s become apparent that Gauteng can’t manage micro dynamics.
“Why can’t we synchronise our traffic lights to create the green f low some countries speak of when referring to f luid mobility. It will save petrol, save time, and will save companies having to think twice about coping with congestion on our roads.”
Ultimately it comes down to progressive leadership, in Schussler’s view.
“We need to think differently about our sources of funding. We need to learn how to reallocate money and reinvest in our roads. Can’t we for example take some funding from Gautrain, a project that’s receiving a subsidy of R2.8bn, and put it towards improving the province’s road infrastructure.”
Because these very issues appeared to simmer and dog development, Gauteng’s position as logistical hub was under attack on several fronts, Schussler warned.
“It’s going to be a struggle for Gauteng to retain its status as the industrial heartland of South Africa if we don’t sort out the transport side of things. If we don’t look after the N3 and if we don’t get rail to work quickly and effectively, we’re not going to see improvement anytime soon.”
Schussler also touched on City Deep.
“Gauteng’s inland port is doing fairly well but it’s dependent on other things to go well, such as manufacturing which hasn’t really taken off for the province. Add the expense of inland logistics into the equation as well as operational efficiency or lack of expected effectiveness, and an inland area such as Gauteng has a major problem.”
What will it take to turn things around?
Mainly leadership, he said.
“I’m a big believer in government not having the sole responsibility to fix things, but they must lead the way. They must create the right environment for business to prosper. If that doesn’t happen it’s very difficult for public private partnerships to take root.”
Gauteng's hub status under attack
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FRIDAY September 7 2018 | 9
GAUTENG
As part of its growth expansion plan, MSC Logistics – a subsidiary of the Mediterranean Shipping Company (MSC) – is set to expand its current operational infrastructure by providing the full spectrum of logistics solutions.
“We will therefore no longer concentrate on transport via road and rail only. “It is our vision to offer our clients a one-stop-shop which will include the complete package free-on-board (FOB),” said MSC Logistics regional manager, Giel Coetzee.
He told FTW the company was also currently in the process of upgrading its f leet to accommodate high cube containers, with the legislation/height restrictions becoming effective in early 2019.
“Looking at transport only, the market has become saturated with capacity increasing whilst demand is decreasing. It is therefore important to look outside the sphere of transport only to survive in a competitive industry. He
said that most transport role players were currently growing by diversifying services offered and offering an all-in service to clients.
MSC logistics has been offering services to Gauteng based clients since 1985. “We have a large f leet
available to assist clients with all their containerised transport requirements, daily,” said Coetzee, and this includes hazardous, bonded, refrigerated and out-of-gauge cargo. – Adele Mackenzie
Fleet upgrade under way ahead of new high cube regs
We will no longer concentrate on transport via road and rail only.– Giel Coetzee
“
10 | FRIDAY September 7 2018
GAUTENG
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The scrapping of e-tolls will have a major impact on Gauteng’s ability to maintain
and develop infrastructure which plays a key role in the facilitation of economic growth in the province.
One only had to look at the Waterfall development near Allandale in Midrand and the Menlyn Commercial Hub development in Tshwane to understand the capacity for roads to unlock economic growth and development, said Electronic Tolling Collections (ETC) company chief project officer, Coenie Vermaak.
Commenting on whether tolling in Gauteng had relieved congestion and enabled goods to move more quickly and efficiently, both Vermaak and ETC strategy and business development executive Tertius de Villers said it was important to understand that an efficient road system gave a country a competitive edge in moving goods economically.
“Tolling itself does not result in quicker and more efficient movement of goods. New roads, the widening of and upgrading of roads result in less congestion and
therefore the more efficient movement of goods,” said Vermaak. “Tolling is a user pay mechanism to fund the construction and improvement of these roads.”
While the widening of the roads and the construction of more effective interchanges in 2009/2010 in Gauteng had resulted result in better flowing traffic, more needed to be done, they said.
“Due to the low toll payment compliance rates Phase 2 and Phase 3 of the Gauteng Freeway Improvement Project (GFIP), which inter alia includes the construction of the PWV 5, PWV 9 and PWV 15 and various other upgrades, did not materialise,” said De Villiers.
They agreed that should Gauteng Premier David Makhura go ahead and scrap e-tolls in the province it would without a doubt have an impact on the efficient movement of goods.
“It should be noted that scrapping e-tolls is not a provincial, but rather a national transport in conjunction with national treasury decision,” said Vermaak indicating that currently the South African National Roads Agency Ltd (Sanral) debt, including accumulated interest, relating to the GFIP upgrades was in excess of R40 billion.
“If a decision is made to scrap e-tolls, the bondholders would be entitled to call on the debt extended immediately. It follows that constructing new roads and improving existing ones would become a major obstacle as the construction backlog would increase dramatically.”
This, they said, would be in addition to the default that would trigger a credit rating downgrade and increase in tax.
Commenting on toll account holders and the
profile of truckers Vermaak said Sanral currently had 84 key account holders including major car rental agencies and fleet banks. “The client base of the fleet banks partly consists of trucking companies and their f leets are therefore financed and managed by the banks. Although ETC does
not report on the vehicles belonging to individual trucking companies, the fleets managed by the banks have remained stable.”
The fact that many of the major corporate companies complied with e-tolls confirmed the notion that the system was legal and properly instituted, said De Villiers.
Road users will pay the price for scrapping of e-tolls
Phot
o: S
hann
on V
an Z
yl
Sanral debt relating to the GFIP upgrades is in excess of R40bn.
FRIDAY September 7 2018 | 11
GAUTENG
Despite a “welcome improvement” in security at OR Tambo International Airport, crime intelligence must be beefed up.
That’s the view of Zakhele Mbhele, Democratic Alliance Shadow Minister of Police, who undertook an oversight visit to the airport last month. “I have been told that the biggest security risk factor at the airport is collusion among corrupt elements in various departments, especially Home Affairs, Airports Company South Africa (Acsa) baggage/cargo handlers, and the South African Police Services (SAPS).” He said that in the past heists at the airport had happened in collaboration with some private security, police and airport personnel.
“This level of organised crime can only be countered
through crime intelligence (CI),” said Mbhele.
SAPS spokesperson, lieutenant colonel Katlego Mogale, is adamant that the multi-disciplinary team, tasked to prevent and combat crime at the airport, is continuing to make arrests of suspects for various crimes. He pointed to several arrests in August for illegal consignments of drugs, abalone and foreign currency.
Fikile Mbalula, national police minister at the time, implemented the Integrated Multi-Disciplinary Tactical Security Plan following a brazen crime wave last year which included the heist of R200 million of foreign currency just
outside the airport.Mbhele said the OR
Tambo station was currently operating at half its capacity, with only 605 posts
currently filled (including administration personnel) out of a required 1 200. “This is indicative of the chronic under-staffing and under-resourcing of the police service at station level.”
He acknowledged that the number of criminal incidents had been reduced and that there had been an increase in the interception of drug
mules, in cooperation with Interpol.
“However, crime intelligence still needs to be beefed up, starting with the permanent appointment of a senior CI commander, in order to build expert knowledge of this specialised environment and drive intelligence-led ‘sting’ operations to crack down on the syndicates responsible for drug
trafficking at OR Tambo and other airports,” commented Mbhele.
He added that there was also room for improvement in order to achieve tighter monitoring of passengers and personnel as well as higher visibility of security personnel. “All of this requires vacancies to be filled as soon as possible,” said Mbhele.– Adele Mackenzie
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E -toll compliance in the freight industry mirrors that of the
province in general, with a large majority of respondents in a survey run in FTW’s electronic sister publication, FTW Online, having never installed e-tags in their trucking f leets.
The average monthly e-toll bill for the law-abiding few covers a wide spectrum – from R2 500 to R12-15 000, to R30 000 and higher.
Two of the respondents whose bills are in the higher bracket are
planning litigation to claim back the funds already paid out should e-tolls be scrapped.
When asked for their suggestions on alternative funding models, most respondents agreed that the fuel levy was the best option.
“They can use the tax they levy
on fuel,” said Clifford
Blackburn of TSI Central Station. “Fuel costs just over R10 – the
rest is tax and levies.”Dirk Gnodde
of Dirkill Freight is in favour of using
the existing road levy “which should be ring-fenced for that purpose.”
A transport manager who preferred not to be
named believes the eNatis admin levy and the levy on the price of fuel should be enough to fund the network. “There is so much wasteful expenditure from these funds.”
The issue of wasteful expenditure resonated with Dirk Schottler of Novotrans International Forwarders. “Fight corruption, do not waste taxes and ensure proper tender processes, eliminating corruption,” he commented.
Ron Thomson of International Forwarding Services is not opposed to the e-toll concept and believes the roads could be
funded the same way “but at a third of the price with the money being collected by the roads agency and not by an overseas company at huge cost.”
According to the Organisation Undoing Tax Abuse (Outa), currently around 25% of motorists pay their e-toll accounts and, during the 2017/18 financial year, Sanral and its
agency Electronic Toll Collection (ETC) collected only R725 million against invoices issued for R2.7 billion.
“The administration costs related to collection for the same period were
about R650 million, excluding any costs allocated to Sanral’s legal expenses or the costs of the summonses issued,” said an Outa spokesman.
Fuel levy the popular choice to replace e-tolls
Th e y ca n u se th e ta x th e y l ev y o n fu e l .
Cl ifford Blackburn,TSI Central Station
Dirk Gnodde, Dirki l l Freight
Th e ex i s t i n g road l ev y s h o u l d tb e r i n g-fen ced fo r th a t p u r po se .
Ron Thomson, International Forwarding Services
Th e y c o u l d b e fu n d ed th e same wa y b u t a t a th i rd o f th e p r i c e w i th th e mon e y b e i n g c o l l e cted b y th e road s ag en c y a n d n o t b y a n o ve r sea s c ompa n y a t h ug e co s t .
Truck owners have called on the Road Freight Association (RFA) to help address the challenges they face in obtaining permits to transport abnormal loads in Gauteng.
“According to operators, getting a permit in Gauteng not only takes longer than in most other provinces, but it is also more difficult depending on the cargo,” said acting RFA CEO Gavin Kelly.
Abnormal permits are issued per trip and per province meaning a load moved from Durban to Johannesburg would require three permits, one from KwaZulu-Natal, one from the Free State and one from Gauteng.
Getting the same permit for the same cargo just takes much longer in Gauteng, or sometimes is just denied.
Kelly said the RFA had engaged with authorities on the issue and it remained unclear why Gauteng was more of a challenge than other provinces.
“It could be because the permit office is struggling to deal with a high volume of permit applications or that they’re taking a more stringent approach to the issuing of permits. Or it could even just
be personality clashes between stakeholders in government and the private sector,” he said.
All cargo that exceeds the limitations as described by the National Road Traffic Regulations, 2000 – either due to weight or size – has to be transported under permit, using a vehicle appropriate to the load. The appropriate permit is dictated by both the geography through which the
load will move and the type of freight. The driver of the vehicle is required to have the correct permits available at all times.
Abnormal permits become even more complicated when a load is moving across borders as not only do the provinces in South Africa have their own permits, but different countries have different requirements.– Liesl Venter
Gauteng hauliers face tough abnormal load permit challenges
FRIDAY September 7 2018 | 13
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Gauteng lived up to its ‘crime capital’ moniker last year with 64% of hijackings and theft occurring in the province, prompting the logistics industry to call for government and police intervention in what they believe is an escalating problem. But transporters can also be more strategic in the way they mitigate crime risk.
“Crime always plays a role in the logistics industry and the Gauteng province is one of the major contributors to this problem,” said Giel Coetzee, regional manager at MSC Logistics.
“Minor problems can usually be dealt with internally; however for more serious matters the South African Police Services (SAPS) and government should be involved."
His comment came in the wake of a manhunt launched by Gauteng police after a truck carrying liquor worth about R3 million was hijacked in
Vereeniging last month.The driver of the truck was
stopped by a VW Golf GTI and BMW that were fitted with blue lights, according to Gauteng SAPS spokesperson brigadier Mathapelo Peters.
“Police responded swiftly to the case of hijacking and the Sedibeng tracing team recovered the truck in the yard of one of the houses in Vereeniging where three suspects were arrested. Preliminary investigations led to the recovery of boxes of Jack Daniels whiskey that were already loaded in another truck.”
The recovered whiskey was worth R3 million but three suspects had allegedly driven off with a second truck containing whiskey worth R1.5 million.
A spokesperson for the Arrive Alive initiative told FTW that not only had there been an increase in truck hijackings in Gauteng but that “disturbing
evolutions in the modus operandi” had been detected. “When truck hijackings first appeared as an issue in South Africa, as far back as 2000, it was almost always about product,” he explained.
He said most truck hijackings would be limited to cash-in-transit operations, electronics and valuable goods. It would normally involve cash money or products that were easy to sell (think electronics, cell phones) and mostly involved “inside jobs” where staff or employees had been coerced into cooperating with product-specific syndicates.
“As security measures increased, so the complexity of operations, methodology and interest evolved. Now we detect trends, ranging from type-specific vehicles (certain makes of trucks, certain types of trailers, etc) being targeted often. As an example we would see a sudden peak in
tri-axle trailers being stolen and heading directly towards borders,” he said.
Most commercial operations – trucking companies specifically – have their control rooms, tracking systems, fleet
management systems as well as driver and management training, but they lack any skill when it comes to the detection, mitigation or reaction to criminal operations, says the Arrive Alive spokesperson,.
– Adele Mackenzie
Truck hijackers get more sophisticated
14 | FRIDAY September 7 2018
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The United States poultry industry has threatened retaliation should South Africa suspend the quota that allows for 65 000 tons of poultry from US producers to be imported tariff-free each year into South Africa.
“We will certainly be encouraging our government to take appropriate action,” said James Sumner, president of the USA Poultry and Egg Export Council (USPEEC). This in response to the South African Poultry Association’s lawsuit – filed last week – which seeks to force government to suspend the quota in response to the Trump administration’s decision to impose tariffs on aluminium and steel imports from South Africa.
In an effort to protect local producers, South Africa
currently levies anti-dumping import duties on “bone-in” poultry that is exported by a number of international markets. For South Africa to retain access to the 2015 to 2025 African Growth and Opportunity Act (Agoa), it was forced to waive the duties for up to 65 000 tons of poultry imports from the US.
At the time, this concession was described by ex-SA Poultry Association CEO Kevin Lovell as the poultry industry taking a hit for the bigger picture of Agoa
inclusion which provides close to R2 billion worth of South African goods with duty-free access to the US.
However, not only has the local industry suffered massive revenue losses, Sapa now argues that the tariffs of 25% on steel and 10% on aluminium imports imposed earlier this year are in direct violation of the quota
agreement as this curtails Agoa benefits.
Sumner disagrees, pointing out that the
differences the US and SA have over steel and aluminium tariffs should have no bearing on agreements already reached on poultry trade.
While Minister of Trade and Industry, Dr Rob Davies, acknowledged that the government had received the court papers relating to the lawsuit from Sapa, his office has declined to comment further on the issue.
This threat of retaliation comes in the wake of an already uneasy relationship between SA and the US after president Donald Trump tweeted that he had asked the US Secretary of State Mike Pompeo to closely study the proposed expropriation without compensation (EWC) bill by the South African government.
While the SA government has strongly hit out at
Trump’s “interference”, analysts have said Trump’s view could potentially derail SA’s Agoa inclusion.
Mills Soko, associate professor of International Political Economy at the UCT Graduate School of Business, warned in a Facebook post that Trump’s personal views had a “massive bearing” on US policy.
Stuart Theobald, co-founder of financial research company Intellidex, added in a Twitter post that SA had an 80% trade surplus with the US, mostly due to Agoa. “But Agoa is conditional on respect for property rights.” He said that the US conservative anti trade lobby had long wanted SA kicked out of Agoa, speculating that they could well use the land issue as a means to achieve this.
US threatens retaliation over SA poultry industry lawsuit
The differences the US and SA have over steel and aluminium tariffs should have no bearing on agreements already reached on poultry trade. – James Sumner
“
Over-border clearing company Seguro has partnered with freight bureau Easy Clear to ensure that it is technologically prepared for the challenges of SA Revenue Service’s new Reporting of Conveyances and Goods (RCG) requirement.
Following extensive stakeholder consultation, Sars postponed the deadline for complying with the new set of regulations from August 1 to November 1, but Seguro has been RCG-ready all along, according to human resources manager Peet Viljoen.
“My staff has had full training on the system and
we have had no issues or challenges so far.
”Our whole operation is web-based and wireless making our battlefield range much bigger,” he told FTW.
Shedding more light on the nuts and bolts of the system, Easy Clear managing director CJ Pagel said it was hosted in Azure, a virtual machine with mirrored data centres across the world.
“The competitive edge that Seguro gains out of this is that the data is democratised, making it available to anyone they choose to share it with. This, along with the digitised approach, allows them to create a seamless
chain from anywhere in the world and will assist them and their customers to become part of the block-chain logistical era.”
“We now have the tools to do our consignments from any destination in the world,” Viljoen said.
Part of the challenge, he believes, is preparedness through predicting possible eventualities.
“Crossing our borders from the road freight side there are still a lot of challenges that will arise in the next two years. Inspection will get tougher, documents will become stricter, we will be limited on certain exports from South Africa to neighbouring countries,
and document stops and inspections will increase. It will put the whole import-export industry under a lot
of pressure. The only way to cope with the unforeseen is to be ready for it.”– Eugene Goddard
Logistics company ready for RCG deadline
Peet Viljoen senior and junior, respectively human resources and client relations managers at Seguro Clearing & Forwarding. Photo: Shannon Van Zyl
FRIDAY September 7 2018 | 15
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They presented us with ten different types of tea that they want to bring to Johannesburg for further marketing and distribution into Africa.– Bernadette Zeiler
“
A Taiwanese trade delegation comprising representatives from six different companies held no fewer than 60 business-to-business meetings with potential local partners during a Sino-South African business indaba hosted by the Johannesburg Chamber of Commerce and Industry (JCCI) last week.
Head of the JCCI’s international trade division, Bernadette Zeiler, told FTW that several investors from the island nation were interested in “using Johannesburg as a springboard into Africa.”
She said the main sectors of interest were food, electronics, jewellery and tea.
“They presented us with a range of diversified products such as ten different types of tea that they want to bring to Johannesburg for further marketing and distribution into Africa’s health markets.”
Commenting on the
‘elephant in the room’ – whether mainland China would take exception to the fostering of trade relations with an independent Chinese state that the People’s Republic doesn’t recognise, Zeiler emphasised that no such talk was brought up.
She said that neither South Africa’s position with mainland China in relation to Brics nor the isolationist trade that we had with Taiwan under apartheid, had anything to do with last week’s trade delegation.
“All we talked about was the niche products that
Taiwan wants to market and distribute through Johannesburg. It has recognised that we’re a gateway into Africa, and based on our expertise, knowledge and strategic positioning wants to establish several joint ventures with us.”
In addition to the prospect of Taiwanese companies setting up shop in Gauteng and creating much-needed jobs, several
JCCI member companies are interested in reciprocal investment in the South China Sea country.
“We are already looking at several outgoing delegations to Taiwan to set up bilateral trade with them.”
News about the Taiwanese trade visit with Taiwan come on the back of recent, escalated tension between the government of Tsai Ing-Wen and her counterpart from mainland China, Ji Jinping.
Due to its persistent refusal to accept Taiwan as an independent state, despite Taipei’s declaration of independence as far back as 1949, the People’s Republic has managed to isolate the break-away
republic from doing business with most of the globe, forcing Ing-Wen to go on an expansive global trade tour.
She was about to visit the US recently when Jinping’s government insisted that Donald Trump’s administration, in the interest of salvaging the already perilous trade relations that America has with mainland China, refuse to recognise Taiwan as a country.
However, after being given the green light to go ahead with US trade talks, Ing-Wen’s response was tinged with schadenfreude when she told Reuters that “no one can obliterate Taiwan’s existence”.– Eugene Goddard
Taiwanese delegation explores bilateral trade opportunities
LAST WEEK’S TOP STORIES
Police detain Russian cargo vessel at NgquraThe South African Police Service (SAPS) has arrested the Russian cargo vessel Lada, owned by shipping company Transflot, which was allegedly carrying explosives.
Logistics sector warned against complacencyThe freight and logistics industry needs to be wary of complacency in a fast-changing world where disruptors are on the rise.
Carrier reliability declinesJuly saw a marginal decrease in overall on-time schedule reliability in the global shipping sector.
Africa drives growth in Chinese exports – reportChinese exporters have made strides in gaining market share in Africa at the expense of other trading partners according to Standard Bank’s latest report on the Forum for China-Africa Cooperation (FOCAC) initiative.
UK’s May ready to step up trade with Africa as Euro exit loomsUK Prime Minister Theresa May and South African President Cyril Ramaphosa on Tuesday agreed to strengthen economic partnerships as the UK prepares to leave the European Union next year.
Trade is no longer following the traditional supply chain route and customs authorities around the world are having to deal with this new way of doing business – at the same time ensuring that goods have been properly declared and are safe to bring into a country, says Global Trade Solution (GTS) founder and managing director Louise Wiggett.
Wiggett returned recently from a World Customs Organisation IT Conference in Peru where she participated as a speaker and panel moderator.
“The theme for this conference was around building reliable digital landscapes to boost cross-border trade,” said Wiggett.
“What came through very
strongly was that while it remains essential to provide efficient and cost-effective services to foreign traders, ensuring the safety and security of the supply chain is critical.”
To achieve this the use of new technologies and digital transformation are central tools offering opportunities to radically
improve the performance and scope of customs administrations.
“Blockchain will play a crucial role in the future when it comes to addressing a number of aspects in the supply chain, including some of the safety and security needs,” said Wiggett. – Liesl Venter
New technologies play central role in supply chain security
$ Pe
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Empty leg dilemma
to maximise return-trip capacity.
Hensher added that during its testing phase MaaS would attempt to accumulate as much data as possible to hopefully shed light on possible solutions for Sydney’s over-subscribed public transport system.
Much like empty-leg solutions seekers are doing at the moment, the academic
stressed that multi-modalism seemed to be the answer for return-trip issues.
“It’s entirely possible to fill under-utilised capacity by breaking down barriers between freight and mobility. Why can’t you reconfigure elements of logistics in such a way that they are used for both mobility and the transportation of goods?"– Eugene Goddard
‘Unfair’ Sacu trade deal
and under-budgeted that they have no idea what is coming into this country and what is not.”
Macpherson said the issue was not having free trade agreements, but rather that South Africa’s agreements with its neighbours were giving it a raw deal.
In the case of Sacu, Macpherson said intra-country inequalities within the union were among the highest in the world, with unemployment and poverty common challenges.
“The aim was to create a regional value chain in Africa, where trade policy could be an instrument of industrial policy, contribute to employment growth, and support industrial development,” he said. “Sacu’s work programme should focus on the promotion of regional industrial development, trade facilitation,
the review of revenue sharing arrangements, the establishment of common institutions, and a unified engagement in trade negotiations with third parties.”
Recent South African data shows that transfers to Sacu rose from R43.4bn in
2012/13 to a provisional R51.7bn in 2014/15, equivalent to 5.4% of South Africa’s total revenue and 1.3% of GDP.
Catherine Grant Makokera, a director at Tutwa Consulting,
said revenue paid to its neighbours by South Africa through Sacu from a development assistance point of view made South Africa the largest donor in the world – at least twice as much as any other country.
According to the Department of Trade and Industry, agreement has been reached at Sacu to discuss some of the concerns and a six-point plan is being developed for further discussions.
From page 1
From page 1
Eugene Goddard
Stronger trade between South Africa and the Philippines could pave the way for direct logistics links between the two countries. Currently exports to South Africa and sub-Saharan Africa are transhipped in Dubai.
Speaking at a business presentation hosted by the Johannesburg Chamber of Commerce and Industry (JCCI) last Friday, Senen Perlada, who heads up the Philippines’ Export Marketing Bureau, said that direct shipping from Manila to the Port of Durban was virtually non-existent.
This is despite increased trade particularly from Manila and surrounding commercial centres such as Makati and Quezon.
Trade figures released during the event also tell a story of burgeoning bilateral business.
Exports by the Philippines to South Africa alone stood at $119m last year, substantially more than the $56.32m reciprocally exported from
these shores to the South China Sea archipelago.
“We’re looking at increasing outflows to South Africa and its SADC partners, and if strengthened trade merits it we will certainly consider direct shipping into local ports.”
The notion of direct shipping received support from shippers of a range of products, mainly health-based teas and coconut beverages, that the Philippines intends to export into new markets in the region.
Interestingly, the Philippine delegation was the second such visit last week – the first being from Taiwan – where prospective traders indicated
that they had identified potential markets in SADC countries for tea products.
Apart from tea and drinks made from coconut oil, the Philippine delegation also predominantly focused on snack-based food and clothing.
“South Africa is by far our biggest trading partner in this region and we realise the value of this country as a springboard into the rest of the region,” said Joselito Jacinto, second secretary and consul at the Philippine Embassy in Pretoria who also accompanied his countrymen to the delegation’s second trade stop, Mozambique.
Philippines traders want direct route
Intra-country inequalities within the union are among the highest in the world. – Dean MAcpherson
“
It’s entirely possible to fill under-utilised capacity by breaking down barriers between freight and mobility.– David Hensher
“
Philippines exports to SA $119m
SA to Philippines $56.32m
