Slide 1Agenda
Intermodal & Bi-Modal Concept
Letsitele and Hoedspruit Rail Siding Map
The Way Forward
The objective of this session will be to identify what is required to increase the use of rail from Letsitele and Hoedspruit – utilizing either of the 3 Modes:
Rail Stakeholders:
Invitation was extended from growers indication of representation by volume
Invitations were extended to a larger audience of which there was no response
Name
Surname
Company
Mitchell
Brooke
CGA
Sandra
Baetsen
FPEF
Malcolm
Dodd
Rail Transportation - The Problem and The Solution
Why has the volume of citrus transported by rail decreased so substantially?
Depletion of rolling stock – lack of service efficiency!
More fruit stacked in high cube pallets – no rail option for high cube pallets up till now!
Rail delays to port – up to 6 days from Letsitele to Durban!
Branch lines and port delays
Industry has become time sensitive – more program orientated!
Cost of rail is generally higher than road transport – Perception!
How do we increase the use of rail and create an efficient and cost effective solution?
International trends indicate the use of intermodal solutions on main rail lines
Therefore the solution is the development of inland fruit hubs
Consolidated common user loading facilities – 3 Mode Approach
There has to be a degree of commitment to rail
Commitment from Growers to move a portion of annual
breakbulk volume by rail
containers at source
What is intermodal transportation?
Definition : Intermodal freight transport involves the transportation of freight in an intermodal container or vehicle, using multiple modes of transportation (rail and truck), without any handling of the freight itself when changing modes. The method reduces cargo handling, and so improves security, reduces damages and losses, and allows freight to be transported faster. Reduced cost and increased efficiency is achieved by utilizing this method of transportation.
3 Mode Approach:
Main delay factor is at the port routing points
Packhouse
Packhouse
Packhouse
(Breakbulk & Containers)
Port Dispersion Siding - wagons are routed directly to Receiving Point
Container Terminal
Fruit Terminal
Rail Journey
Road Journey
Mode 1 – Break-bulk Rail
How to increase the use of Break-bulk rail from Letsitele and Hoedspruit?
Introduce a viable, efficient and cost effective solution.
Letsitele and Hoedspruit options for Durban and Maputo!
Develop loading points on main rail line – Letsitele been doing this!
40 Wagons (960 pallets) must be dispatched <36hours – 3 times per week = 2,880 pallets per week.
Citrus block trains are required to increase efficiency!
Japan fruit must be loaded on rail to Durban
Important Consideration
TFR should partner with a single entity – one stop shop
Seamless operation from packhouse to port cold store
Loading - 3 Ton double forklift trucks with extension arm, side shift and high cube pallet carriage required at the siding
Imperative that proper resources are employed
Situated in Letsitele / Hoedspruit – monitor loading
Situated in the Durban port – monitor offloading: </=4 days
Mode 1 – Break-bulk Rail
How to increase the use of Break-bulk rail from Letsitele and Hoedspruit?
Introduce a viable, efficient and cost effective solution.
Letsitele and Hoedspruit options for Durban and Maputo!
Develop loading points on main rail line – Letsitele been doing this!
40 Wagons (960 pallets) must be dispatched <36hours – 3 times per week = 2,880 pallets per week.
Citrus block trains are required to increase efficiency!
Source: PPECB
Season 2009
Notes:
It must be noted that the rail rates as reflected are a mere indication of the rail rate per commodity that is required to remain competitive
The cost of rail reflected is a full all inclusive service of road transport to siding facility and rail to port cold store – all resources must be provided
Letsitele Region
Mode 2 – Packhouse stuffed Reefer Containers
Is the industry satisfied with the volume of containers packed at the farm?
Approximately 711 containers loaded from Letsitele during 2009 season.
This equates to 14,220 pallets = <10% of Letsitele annual production!
38 containers x 2 trips per week = 1,520 pallets per week
This volume should be doubled to 20% of production = 1,500 containers (30,000 plts)
What are the constraints prohibiting more containers to be packed?
Packhouse is required to accumulate specific cargo – floor space!
Fruit availability is not fixed – packing for markets varies from day to day
Weather may delay packing, etc – Inconsistency!
Shippers have volume commitments at port cold stores
Important Considerations
Would a consolidation facility in Letsitele allow more containers to be stuffed inland?
Hoedspruit packhouse container stuffing could link to the Letsitele operation
Fruit can be accumulated from different packhouses per shipper
Can be consolidated with packhouse stuffed containers
Growers have requested that containers are loaded via
Letsitele station and not via Tzaneen station - Discussion
Mode 3 – Inland stuffed Reefer Containers
Modus operandi
Fruit is accumulated over a 4 - 7 day period – Packhouse to inland facilities in Letsitele and Hoedspruit
Hoedspruit containers may have to be transported to Tzaneen / Letsitele
Containers are stuffed ambient and railed to port <72hours
Possibility to rail to port without power – Protocol <16hours?
Containers can be pre-cooled at the port <10 days from packing
Research should be undertaken to amend the Protocol – currently being done under approval of dispensation
Important Consideration
What are the requirements?
Ambient loading facilities in Letsitele and Hoedspruit – Capital investment
50 Containers per week (1,000 plts) x 20 weeks = 20,000 pallets p.a
Current ambient rate R80 x 20,000 p.p.a = R1.6m p.a
The total capital outlay is estimated at R1m with costs ~R400k p.a
Containers can be linked to the packhouse stuffed containers
Packhouse loaded Reefer Containers: Model based on the principle that MT containers are collected from Durban and transported to packhouse to be loaded and rail direct to port with power source. Full all inclusive service.
Inland loaded Reefer Containers: Model based on the principle that MT containers are collected from Durban and transported to inland hub to be stuffed and railed direct to port with power source. Road Transport is done independently carting 26 H/C pallets from packhouse to Inland Hub.
* Cost of Road Transport to Hub: based on assumption of cpk and daily rate. (Using 26 H/C plts per truck)
** Inland Handling Cost: based on an assumption of R80 per pallet incl. 7 days storage.
*** Cost of Container Rail to Port: cost of rail should be obtained from Progressive Logistics (Using 20 plts per container H/C)
**** Cost of Road Transport to Port: based on various Transport rates received. (Using 26 plts per truck H/C)
Cost Comparison of Inland Loaded Reefer Containers
Citrus Region to Port
Cost per pallet
Port Handling Cost*****
Cost per Pallet
Cost per Pallet
Inland FOB Cost
Port cost factors Costs reflected are based on averages
Estimated Cost of Packhouse stuffed Reefer Container Cost of full all incl. container service
R 17 000
Port cost factors Costs reflected are based on averages
Estimated Cost of Inland stuffed Reefer Container
R 17 000
Port cost factors Costs reflected are based on averages
Estimated Cost of Packhouse stuffed Reefer Container Cost of full all incl. container service
R 16 000
Port cost factors Costs reflected are based on averages
Estimated Cost of Inland stuffed Reefer Container
R 16 000
Highest Carbon Footprint Factor
High Risk Logistics
Best for Fruit Integrity
Best Carbon Footprint Factor
< Handling and Storage Charges
Medium / High Risk Logistics
Better for Fruit Integrity
Better Carbon Footprint Factor
It must be noted that fruit could be </= 7 days of age before being stuffed
Packhouse
Best Shipping time to Markets
Better Shipping time to Markets
Note: this assumption is based on Letsitele - Durban average times during peak season.
Northern Region Rail Network
Break-bulk Train Routed to Durban (via Swaziland) and Maputo
Northern Region Rail Network
Additional 30km Road Haulage Letsitele to Tzaneen
Moving the Reefer Container operation to Letsitele will allow better utilization of trucks and better efficiency of loading operations at packhouse
Hoedspruit Reefer Container operation may have to be consolidated with Letsitele
Northern Region Rail Network
Northern Region Rail Network
Hoedspruit Siding
A suitable break-bulk loading shed is required at Hoedspruit siding – TFR investment
In order for Hoedspruit region to load Reefer Containers, plug in points are required as well as a dedicated train set equipped with a diesel generator.
The Letsitele Sidelifter could be deployed to Hoedspruit once a week along with a train set. Exporters should discuss this with Progressive Logistics.
Mode 1: Break-bulk – TFR is the driver
Competitive rail rates – seamless service
TFR & CGA road trip to Hoedspruit - Urgent
Require Hoedspruit loading shed at Hoedspruit siding - Priority
TFR partnership to include one stop shop service – Rail focused entity
Logistical resources monitoring rail traffic – Packhouse to Port
Durban Japan ambient facility must handle rail – Biggest breakbulk rail opportunity
Mode 2: Packhouse stuffed Reefer Containers – Exporters are the driver
Infrastructure at the Letsitele station – Reefer plug in points (Cost Analysis)
Hoedspruit Packhouse stuffed containers to load at Letsitele siding
Mode 3: Inland stuffed Reefer Containers – Exporters are the driver
Ambient protocols should be revisited to allow ambient trains to port < costly
Business proposal (viability and feasibility study)
Infrastructure development in Letsitele
The Way Forward
Note: The term ‘STUFFING’ a container refers to cargo being placed in a container
“It is not the strongest that survives, it is the most adaptable to change” Charles Darwin
“The quickest way to reduce the cost chain is to reduce the cold chain” Malcolm Dodd