FTW Road Rail 2010 Feature ROAD & RAIL

FREIGHT & TRADING WEEKLYAPRIL 2010

RoAD AND RAIL SPECIAL FEATuRE INCoRPoRATING GREENING THE SuPPLY CHAIN

on driving downlogistics costs

Pick n Pay’s Cobus Barnard

Why rail wannabes won’t make the switch

The argument for investing in road over rail

SLASHEd! How industry leaders are cutting carbon emissions

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● transport ● Warehousing● Project Logistics ● shipping

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APRIL 2010 | 1

Editor Joy OrlekConsulting Editor Alan PeatAssistant Editor Liesl VenterAdvertising Carmel Levinrad (Manager)

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Cover photo: Cobus Barnard ... Pick n Pay’s GM supply chain.

Road and rail transport

The freight industry would readily embrace rail transport if it provided a predictable and reliable service. But for most shippers it remains a let-down.

Page 2Centralised distribution model helps Pick n Pay drive down costs

Page 4‘Benefits of investment in road far exceed rail’

Page 5The will is there but the rail service isn’t

Page 6Border crossing the roadblock to efficiency

Page 7EDI milestone will slash border delays

Keep abreast of transport regulations – insurer

Page 8New security seal gets the SAB stamp of approval

Page 10‘Rail remains a let-down’

‘Pay-back on green initiatives well worth the costly outlay’

Page 11Border delays continue to stymie smooth logistics operations

Checking driver credentials is crucial to avoid theft

Page 12Working towards a safer road environment

Greening the supply chain

With ‘carbon miles’ playing an increasingly crucial role in global trade, several industry players are investing heavily in green initiatives.

Page 14Maersk sets 20% emission reduction target

Page 15‘Green’ recycling of Cotonou a first for Safmarine

Page 16Alternative jet fuel flight makes history for Qatar

Electronic filing saves the forests

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By Liesl Venter

There is no doubt that the current road infrastructure in the country will not be

able to cope with the future supply chain demand, necessitating a mode switch by various industry role-players if they want to continuously and sustainably develop South Africa’s freight industry.

This is just one of the challenges facing Pick ’n Pay in the near future when it comes to moving goods by road, says Cobus Barnard, general manager: supply chain for the retailer. “Road has been our key mode of transport as it has allowed us to effectively deliver to each store regardless of where it is situated.

“In recent months, however, we have met with rail stakeholders to discuss using rail if and where possible, but for the meantime we will still only be using road – for

the movement of our imported goods as well as the delivery of all our store merchandise.”

Like many other companies in the country Pick ’n Pay is not unwilling to move its cargo to rail, but the mode has to be reliable and trustworthy at all times. And in its present format it is just not a viable or effective option.

“Road remains a reliable means of delivering on time not only to our South African stores but also our stores in neighbouring countries such as Botswana, Zimbabwe and Swaziland.”

Currently in the process of opening a new store in Zambia, which is expected to be operational before the end of July, Pick ’n Pay is finding itself entering the cross-border market where road is even more important due to the complete lack of rail infrastructure in southern Africa.

“We will be trucking most of the produce, including the perishables,

Centralised distribution modelhelps Pick ’n Pay drive down costsRecession fast-tracks cost-saving initiatives

In a retail environment it comes down to the balance of on-shelf availability, inventory holding cost as well as the ability to replenish your stores as and when stock is needed in a cost-effective way.

into Zambia and will use airfreight for very specific and urgent deliveries. This is the first major store we are opening outside South Africa bar the shops we have in Namibia and Botswana and we are very excited. Of course we are expecting some teething problems that will come with its own set of challenges, but we are convinced that this expansion strategy will stand us in good stead.”

Barnard believes it is imperative for companies to continuously focus on the value add that can be created by focusing on one’s supply chain development. “Supply chain is a key enabler to drive efficiencies out and in so doing, reduce one’s overall cost to supply.”

In a post-recession South Africa it is even more opportune to look at initiatives that drive out cost especially when it comes to transportation, which remains a high cost factor for any retailer. ”The recession has forced us to look at implementing initiatives much quicker than we had anticipated. It is about finding ways to improve on shelf availability.”

According to Barnard one of the ways Pick ’n Pay has decided to achieve this is by implementing

a new regional centralised distribution model. “Until now our suppliers have delivered goods directly to stores. Our new model means that grocery suppliers will in future deliver to our network of regional distribution centres, while general merchandise will be delivered to our distribution centre in City Deep, Johannesburg. Selected suppliers are already centrally distributing product to our inland stores through our Longmeadow distribution centre in Gauteng.”

This is a major change for the company, says Barnard. “Our competitors have been using this model for some time. “We are rapidly implementing centralised distribution and are very positive about the change and our expectations around it.”

For Barnard it is all about bringing about an efficient supply chain where one can sustainably balance cost and acceptable service levels to one’s customers. “In a retail environment it comes down to the balance of on-shelf availability, inventory holding cost as well as the ability to replenish your stores as and when stock is needed in a cost-effective way – all to service our customers better.”

APRIL 2010 | 3

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By Liesl VenterBy Liesl VenterBy

There is no denying that when based on full cost accounting calculations for each mode, including energy resource consumption and other transport cost externalities, rail has a financial and environmental advantage over road.

But, says Allen Jorgensen of the Railroad Association of South Africa, only once the total transport costs have been fully investigated in South Africa will the country be able to make informed infrastructure investment decisions that benefit all.

“Currently we are relying on studies done in other countries and unless we take an in-depth look at our own country we will never be certain what the real cost of transportation is.”

While Jorgensen is a keen lobbyist for rail, there is no denying that road transport is fast and flexible, he says. “There are many ‘hidden costs’, which can place one

transport mode at a disadvantage when competing with another mode. This can affect decisions regarding infrastructure investments and the environment.”

Taking international studies into account it has been found that when transportation cost externalities such as space usage, accident and congestion costs, pollution, noise and traffic policing costs are calculated and considered, road transport costs would increase by 26-31%, while rail, by comparison, would increase by about 5%. “If infrastructure provision and maintenance costs per net tonne-km were included road freight costs would increase by over 50%,” says Jorgensen in a paper on transport, energy and the environment.

He believes it is important to put both the rail and road modes on the same level of infrastructure responsibility and then develop an effective intermodal solution taking advantage of the strengths of each mode.

Intermodal is the way to go, says rail specialist‘We must investigate the total transport costs in SA’

4 | APRIL 2010

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By Joy OrlekBy Joy OrlekBy

The economic argument of road versus rail has little to do with the transport cost of moving

goods from A to B. The positive externalities of road far exceed the transport costs – and that’s where the debate needs to take place, in the view of transport economics adviser at Arup Transport Planning, Andrew Marsay.

There’s no doubt that the environmental benefits of rail far outweigh road, but what hasn’t been adequately quantified is the positive economic benefits of road. Road has enabled manufacturing to take place in more locations than was ever possible with rail, says Marsay.

“In addition, there’s the manufacturing optimisation. You can offer small amounts of goods frequently throughout the day in many locations. “The final manufacturing location is often a very small part of the total manufacturing process with many

‘feeder’ manufacturing locations able to locate remotely in places more economic for their purposes. By facilitating the disaggregation of production processes in this way, efficient road transport technology has brought massive efficiencies to the manufacturing sector over the past few decades.”

A research project undertaken for the Department of Transport in 2008 examined how to increase investment in transport infrastructure in a sustainable manner. “We had to review the relationship between transport infrastructure and economic development over a long period. “The research showed that investment in paved roads pushes GDP and enhances it whereas investment in additional railway capacity follows GDP.”

There’s no question that rail does some things best – bulk coal and bulk rail over long distances, for example. “But Transnet doesn’t tend to prioritise these to the extent is

warranted by the viability of their successful bulk haulage businesses.

“They want to target general freight business because the revenue on a container is very high. But international evidence as well as history here in South Africa indicates there is simply not a good economic case for general freight rail investment.”

In revenue terms, Transnet’s strategy may appear rational – but the true costs involved in achieving these revenues are artificially hidden. “Transnet’s privileged position as the monopoly owner and operator of the country’s ports and pipelines gives it an artificially protected cash flow that enables it to raise capital and put it into whichever area of freight rail it thinks is a good thing.

In Marsay’s view, billions are being invested in rail on the basis of the true, but only partial analysis, that when rail is efficient it can have a much lower cost per kilometre on long hauls than road transport.

“But most of the value is not in the transport cost but in the economic externalities.”

If it were purely down to transport costs rail should have 60-70% of the market but it doesn’t. “It has only 15% even on the Gauteng-Durban corridor – which is clear evidence that there’s something other than transport costs at work.”

‘Benefits of investmentin road far exceed rail’Positive externalities are what must be considered

Andrew Marsay ... ‘Transnet’s privileged position as the monopoly owner and operator of the country’s ports and pipelines gives it an artificially protected cash flow.’

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By Liesle VenterBy Liesle VenterBy

Private companies would use rail – if it was capable of meeting their needs.

This was one of the most significant outcomes of this year’s Barloworld Logistics supplychainforesight survey that found companies were willing to use rail, if Transnet could provide the capacity.

Around 80% of companies surveyed said they currently moved less than 10% of their goods by rail, while 46% said they would move more than 20% of their goods by this mode if adequate rail capacity were available.

“This is a tragic indictment of the country’s key economic failing,” said Barloworld Logistics marketing general manager Kate Stubbs. “Transnet has a multibillion rand long-term investment programme on track, but even though it looks good the reality is that it is moving too slowly for the private sector.”

And while no one sees a “huge step-change” in rail infrastructure and operations, goods will continue

to be moved by road. “This survey proves there is an outcry from the private sector for a functional rail

system. They are saying we want rail and we need it.”

Speaking at the Johannesburg launch of the survey Devesh Killan from Transnet acknowledged the private sector need. “Obviously we are not where the industry wants us to be at present, but we are making progress and getting there, slowly but surely. In terms of streamlining processes, improving service delivery and upgrading rolling stock we are working towards our goals.”

He said the parastatal was also on track with the spending of its R80 billion investment over the next five years.

“We must also not forget that historically in South Africa rail has not been part of supply chain management and that is something that must be changed. The intent of companies is also not the same as willingness and I believe we need to get to the point where intent is shown by implementation.”

He said while Transnet still faced some major issues, general freight was definitely a target for the organisation along with containers. “We are putting much effort into this

part of the business and hoping to improve on our service delivery at all times.”

According to Stubbs, another major finding of this year’s survey was the need for public-private cooperation to improve infrastructure. “Most of the 377 respondents in the survey strongly agreed there was a need for public-private partnerships in the freight rail sector, and that private sector investment was needed.”

This was welcomed by Killan who said Transnet was in favour of collaboration. “It is important however that as an organisation we look at what our needs are, what it is we want out of PPPs, and how we are going to serve all the role-players.”

He said Transnet was in the in process of finalising its framework for PPPs that would play a guiding role in future.

“We come from decades of non-investment in rail infrastructure and rolling stock. Our intent is to build a world class rail network for South Africa, but it is going to take time to get to where the private sector need and wants us to be.”

The will is there, but the rail service isn’tPlans look good – but reality is moving too slowly

Kate Stubbs ... ‘There is an outcry from the private sector for a functional rail system.’

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Delays at border crossings remain one of the major challenges for road

transport, says Warren Jayes, manager of Leo Shipping Services.

“For the most part road transport is running smoothly, but the border crossings are problematic as they result in huge delays.”

Leo Shipping Services, together with partners Alro Shipping in Harare, Zimbabwe, run both break-bulk trucks and full containers between Durban and Johannesburg while also transporting to Zimbabwe, Zambia and the Democratic Republic of the Congo.

And with road transport increasing between South Africa and Zimbabwe it is imperative that solutions to border post delays are found. While the SADC and government organisations continue talks around the development

of one-stop border posts, trucks standing for days at border posts result in price hikes.

“The time frame for moving cargo is extremely important and makes all the difference,” says Jayes. “We use both rail and road depending on the needs of our clients. Budget and of course the weight of containers also determine what mode of transport is used as heavier containers more suited to rail attract a cheaper rate.”

While currently only utilising the rail network between Johannesburg and Durban, Leo uses trucks for cross-border operations, making efficient border post operations all the more crucial.

“It is all about delivering the best service in the best possible time frame at the most cost-effective price that gives a company a competitive advantage – and that is something we strive to achieve every day.”

Border crossingthe roadblock to efficiency

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By Joy Orlek

The best advice to the road transport industry when it comes to insurance is to keep abreast of legislation – because a transporter acting illegally effectively voids his insurance policy.

Legalities are a concern, says Associated Marine chief operating officer Mike Brews.

“If, for example, a transporter is carrying an overheight container and collides with a bridge, the claim would be repudiated.”

And with the many changes to legislation in the roadfreight industry, keeping updated is crucial.

There are however often grey areas, says Brews. If, for example, a transporter arrives with the wrong trailer to collect a high cube container and there’s a claim related to this equipment shortfall, the validity of the insurance policy will depend on who was negligent – the client for not advising the transporter or the transporter for ignoring the information provided.

But he believes the clearing and forwarding industry has been proactive in keeping its clients informed of the myriad regulations in place – although it remains an issue.

Associated Marine’s inland transport insurance policies are three-pronged – covering local goods in transit, the movement of import and export cargoes on the inland leg and insurance of the actual transporter.

Import and export volumes have been down 20-25%, says Brews,

which means that insurance business in this sector has shrunk by the same percentage.

“We have seen casualties on the haulier side because of tight margins – but as the economy starts improving we’ll see new guys coming into market.”

The company’s standard marine policy insures cargo for all risks while its stock throughput policy is effectively a cradle-to-grave type option from warehouse to warehouse including any storage aspects.

EDI milestone will slash border delaysCompu-Clearing customers ready for April 1 switch

Keep abreast of transport regulations – insurer

By Joy Orlek

April 1 represents an electronic milestone for SA Revenue Service Customs.

That’s the date on which all clearances on the Botswana, Lesotho, Namibia and Swaziland (BLNS) borders will go EDI – and no-one is more enthusiastic than Compu-Clearing marketing manager Werner Pretorius.

“All cross-border shipments will have to be framed and sent to customs before the haulier arrives at the border – which will cut down on queues and streamline Customs clearance significantly.”

And the ruling applies to all users – whether they’re framing 20 or 3 000 entries.

It’s also generated a lot more business for Compu-Clearing which is signing up new customers on a daily basis, says Pretorius.

“It’s not a new programme for us. We’ve offered it all along and it’s a very simple system to operate. It takes customers five minutes to complete

and send to Customs, and ten minutes for clearance. Once the cargo has been cleared, it’s free to move – a huge improvement on what used to be a delay of sometimes up to three hours at the border.”

While customers are benefiting from no delays, there are also huge benefits for Customs.

“There’s no longer any need for them to capture data, which translates into no finger faults for road transporters. “They now know that once it’s through to customs and released they can send their driver with a smile and there won’t be any hassles.”

It will also cut down significantly on corruption – no passing of bribes to ensure that a consignment is cleared.

The Compu-Clearing product is a modular system which enables the customers to sign up for the BLNS system only. “And we charge on a transaction basis working on a sliding scale – so the more they frame the cheaper it gets and that’s how we can do business with small, medium and

large guys. The small operator doing maybe 1000 entries a month gets all the benefits of the system, as does the guy doing 3 000 entries a month. But in each case, you only pay for what you use.”

Compu-Clearing has signed up over 30 customers since February, and a lot of these are to do with the BLNS system, says Pretorius.

“It will change the way people are doing business. And although it will

increase costs for transporters – it’s a minimal amount which they will work into their documentation fees.

“The benefit,” says Pretorius, “will far outweigh the costs involved.”

It’s required a lot of training, and a change of mind-set among customers, but with weekly and daily training schedules both online and face-to-face available, Pretorius is confident of a smooth transition on April 1 for Compu-Clearing customers.

Werner Pretorius … ‘It will change the way people are doing business.’ Photo: Tijana Huysamen

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“Our customer feedback has been very positive especially in terms of the significant reduction in the ‘middle crate’ syndrome – where the contents of a crate in the middle of the load are stolen,” says Thuynsma.

The new security system will see every taut liner load being sealed in a specific configuration – for the back trailer, six seals on the curtain (three on each side) and two on the ratchets, and for the front trailer, one seal on each side of the trailer and two on the ratchets bringing to 12 the total number of seals for each trip. Each seal is embossed with a unique number and either SAB or ABI.

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is loaded and checked under camera surveillance at gate security, where the driver signs that the paperwork and the truck contents agree. The security seals are then applied and their unique numbers recorded.

“At the destination, the seals are checked by security and if there are any discrepancies or evidence of tampering, the load is offloaded, isolated and fully audited,” he says.

According to Thuynsma, one of the advantages of the system is the time saved. “Fifty percent of the cost of a vehicle is its fixed cost, which basically translates into time. If a vehicle arrives with seals intact, which is most often the case, the truck does not have to

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be fully audited and is allowed to drive straight into the warehouse saving significantly on time,” he says. “This is in spite of the fact that random checks are still carried out on two pallets.”

If there is any irregularity with the seals, any missing stock is charged to the transport contractor while in the case of the seals being intact but product missing, the depot can charge the factory. “This

accountability is perhaps the most significant plus of the system,” says Thuynsma.

According to Vikela Aluvin, suppliers of the seals to SAB, the trials were an opportunity to iron out any teething problems.

“With more than 210 000 taut liner trips a year this is an account we take very seriously,” said Tanya Buitendach, Aluvin national sales manager.

Neil Thynsma... accountability the most significant advantage.

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Rail remains an unreliable mode of transport in South Africa despite claims by

authorities that much has been done to improve the infrastructure and rolling stock.

“It is just not dependable and any company wanting to offer a timeous and professional service will find themselves being let down by rail more often than not,” says Alwyn Nel, managing director of Kingfisher Freight. “The biggest problem that we have is that of the infrastructural collapse which ranges from derail-

ments to cable theft – and that means trains are not operating. And if trains are standing, so is the cargo.”

Add to that the fact that rail is not always cheaper, and road remains the best option.

“Road is manageable. If some-thing happens to a truck, you can find a solution even if it means send-ing a second truck and reloading all the cargo. With rail your hands are chopped off completely and there is absolutely nothing you can do but wait for the cargo. Using rail remains risky.”

But maintenance and the improve-

ment of the road infrastructure is crucial to the industry if it wants to offer a world-class service.

“The road infrastructure in the country is definitely not perfect as the maintenance backlog on especially secondary roads is huge. Challenges facing the industry are that of traffic volumes, ensuring the infrastructure is continuously upgraded and keeping fuel costs to a minimum.”

‘Rail remains a let-down’Reliability is key in our competitive industry

Alwyn Nel … ‘Improvement of the road infrastructure is crucial.’

‘Pay-back on green initiatives well worth the costly outlay’By Liesl VenterBy Liesl VenterBy

South Africa, for the most part, has yet to legislate greening initiatives, but already most of the transporting fraternity recognises the importance and need to go green.

According to Gavin Kelly,

spokesman for the Road Freight Association (RFA), more of the country’s trucking fleet is aligned to green initiatives than the standard light vehicles – an indication of things to come.

“In South Africa at this stage it is a nice to have and totally

up to the individual company, but for the most part transport operators understand the need to go green and are doing so without legislation.”

A fact much helped by the large number of imported trucks that are built to meet the legislated

international standards.“Most of the trucks we import

are more environmentally friendly. So while they may be assembled locally, the specs are of such a nature that they meet the international greening requirements,” says Kelly.

FTW

3154

Swaziland breakbulkroad freight operator

Chrisilda Transport Company

Tel: +268 518 7412 • Fax: +268 518 7427Cell: +268 605 0190 • email: [email protected]: +268 605 0190 • email: [email protected]

Long Distance Transport Operators

Since 1974

APRIL 2010 | 11

By Liesl Venter

A unified solution at border posts in southern Africa will make all the difference in ensuring the

smooth movement of cargo across the region, says Chris Chiinda, director of Cee Cee Freight & Suppliers.

“Borders remain a major headache,” says Chiinda. “We face various challenges in the freight forwarding industry but delays at border posts is probably still the biggest of all. Add to that the challenge of capturing data for two different countries and it just takes even longer.”

Based in Lusaka in Zambia, the company’s main line of business is transport logistics, clearing and

forwarding of shipments working across southern African countries.

“The reality around the movement of goods is that a truck will cross to Zimbabwe or Zambia, and in both countries paperwork will have to be captured and redone due to the lack of a uniform system. We believe that once a solution is found to this problem, the days of delays will be over. It is critical that we adopt a common entry procedure for southern Africa.”

But, despite this continued challenge, the road freight industry continues to grow from strength to strength, says Chiinda.

“Rates have become more favourable, and with more entrants to the market competition has

increased, which is a good sign.”But with more trucks on the

road, it is more important than ever before to upgrade and maintain infrastructure at all times.

“Good roads with reasonable toll fees and fair road blocks to safeguard the goods and the services being offered in southern African countries is imperative to our industry,” says Chiinda. “Without a doubt we must also improve our railway systems as we need both modes of transport.”

Border delays continue to stymie smooth logistics operations

Chris Chiinda ... ‘It is critical that we adopt a common entry procedure for southern Africa.’

Checking driver credentials is crucial to avoid theftOrganised syndicates recruit drivers

By Liesl Venter

Transporters should always conduct background checks on their drivers and obtain as much information about them as possible before employing them.

This is the advice from Cas Weeks of Africargo and Transit Surveys, a company that attends to cargo and risk assessment assignments on behalf of both local and overseas insurers, brokers and clearing agents.

“Over the past 12 months we have investigated no fewer than 85 hijacking incidents where drivers have been implicated in the thefts. Of interest is that 80% of those drivers are foreign nationals,”

says Weeks.With special expertise in the

investigation of claims arising out of hijacking, theft, fraud, goods in transit, warehouse risk and warehouse inspection surveys as well as pre- and post-discharge surveys and general condition surveys, Africargo says it is important that transporters make sure they know the people they are employing.

“The large number of foreign nationals entering South Africa has resulted in a flood of foreign drivers being available for local employment.

In most instances no background checks are conducted on these drivers and very limited information is obtained

from the person before they are employed by a transporter. It is concerning that in most instances the transporters do not know or check who the driver’s previous employer was, confirm his cross-border address, obtain details of his wife, children, next of kin or even take a photograph of him before offering him employment.

It seems that in most instances drivers simply provide a local address, their licence, a copy of their Asylum Seekers’ Permit and Road Traffic Register Certificate and are handed the keys to expensive rigs transporting, in some instances, even more expensive cargo,” says Weeks.

“The syndicates operating in South Africa and cross border are well organised. They identify transporters that are carrying certain types of cargo, befriend and recruit their drivers and in most instances the cargo is sold and the driver paid before it disappears. Cargo valued at R1m is sold in some instances for as little as R40 000 by drivers to these syndicates.

The drivers then simply disappear back across the border. Due to the organised nature of these ‘reported’ hijackings the driver and cargo are almost never located and this is thanks largely to relevant driver information not being available timeously.”

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Hijacking remains a serious threat to road transporters especially when transporting

goods of high value such as computers and electronic equipment.

Steve Leukes, managing member of Quality Airfreight Services, says it is important to be vigilant at all times in order to limit the risks.

“One of the issues that is adding to the crime problem is the lack of credit machines along a major route such as the Trans Kalahari Corridor (TKC). Drivers of smaller vehicles have to carry cash as they cannot refuel using fuel cards – and this makes them definite targets for criminals.”

Other challenges such as the large number of farm animals found roaming along the TKC also pose a danger to drivers while the road user charges that differ at the points of entry make for difficult working conditions. “With no fixed exchange you cannot accurately cost a trip in rands beforehand,” he says.

And when it comes to the South

African road system, potholes are part and parcel of the system.

It is imperative, says Leukes, to find solutions to these challenges, as the importance of road transport cannot be under-estimated.

“There will always be a need for goods to be transported between Namibia and South Africa. With airfreight prices almost unaffordable these days and rail being just too time-consuming, the opportunities for road transport are plenty, but we must ensure that the challenges around road are addressed.”

“Namibia imports some 80% of its consumption annually and that needs to be transported mostly from South Africa.

“Companies should be encouraged to invest in driver training, while governments should be coming on board to ensure our roads offer a safe and reliable mode of transport.”

As a founding member of the Namibia Logistics Association, the company is actively getting involved in creating a safer road environment.

‘Working towardsa safer road environment’

By James HallBy James HallBy

Transit traffic has allowed Swaziland Railway to survive through a harsh economic climate that has seen importation of factory inputs diminish with a corresponding drop in finished goods exports.

“At a time when import and export volumes are tumbling, transit traffic volumes increased by more than 10% thanks to the support of Transnet Freight Rail, which provided the resources to transport minerals from Phalaborwa and pushed for joint execution of these operations,” Stephenson Ngubane, director of operations and marketing at Swaziland Railways told FTW.

Transit traffic of SA rail-carried goods has boosted the landlocked nation’s rail system during earlier economic boom years, and has provided a lifeline for the firm this past year.

“Swaziland Railway has had to survive in a harsh economic climate that saw exports of textile products (one of Swaziland’s key industries) decrease dramatically. These export

products are containerised then shipped to overseas markets, and Swaziland railway experienced a low transport services demand. The manufacturing industry in Swaziland imports material and then exports finished goods, and imports declined due to the low demand for inputs,” Ngubane said.

As the economy improves, Swaziland Railway will continue playing a critical role in the SADC economy, Ngubane said, providing direct access to South African and Mozambican ports.

“The geographic position of the SR network facilitates faster transit times to and from ports,” he said.

Logistic and infrastructure advancements are also continuing regardless of the economic slump.

“Swaziland Railway and TFR continue to remove obstacles to train service integration. The company has embarked on mechanised track maintenance in order to cope with the high utilisation of the track, necessitating intensive track maintenance to ensure high standard of work,” Ngubane said.

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By Joy OrlekBy Joy OrlekBy

Transport economics adviser at Arup Transport Planning, Andrew Marsay,

remains a strong proponent of a freight ‘superhighway’ between Johannesburg and Durban – and he believes that government should be investing in road rather than rail to address the country’s logistics issues.

“By segregating freight traffic from passenger traffic you can bring down costs by up to 40%, at the same time generating massive safety benefits by keeping buses and cars separate.”

And the economic benefits to the country are huge, in his view. “Even in difficult financial times like now it would make sense for government to create a transport infrastructure investment fund.

“The freight highway could be tolled and if the highway could help vehicles reduce their operating costs by 20%, road operators would be able to contribute a good proportion of the cost through the tolls.”

But even without the benefit of tolls, the positive economic externalities would justify government investing in the road, says Marsay.

And there are several interventions that could mitigate carbon emissions of road transport, a strong argument against the road option. “While there’s no question that road technology is four to five times worse than rail in terms of carbon emissions, that must be seen in the context of the economic value of the whole supply chain, says

Marsay, who points to evidence that the very significant environmental cost differential between the two modes is actually only a small proportion of total supply chain cost and should not be allowed to be the sole basis of a decision on infrastructure.

“We must follow the total economic picture with our infrastructure investment and start to optimise vehicle manufacture to much higher environmental standards.” Marsay suggests that one could, as a condition for a freight super-highway, insist that only Euro 4 engines – the highest level of technology available in terms of environmental performance – be allowed to use the road.

“In this way you would combine the move to road with strong moves to mitigate the environmental externalities of road.”

And it’s not a pipe dream, in Marsay’s view. The concept has been explored in the US where there are a number of examples of successful freight highways in the likes of Texas and Pennsylvania.

“A particular application of the segregated freight road concept occurs where freight traffic and port access traffic compete for road space as in Durban. The only way to effectively manage port and city traffic into Durban port is to segregate it.

“If the case were acknowledged the highway could be completed in 10 years,” he said. A staged approach could be adopted with bypasses of Van Reenen’s Pass and Pietermaritzburg’s Town Hill being good starting points.

Freight superhighway on Jo’burg-Durban route the answerUS examples show that it can work

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Environmental responsibility is an industry imperative – and operators in the sea, air, road, rail and logistics

industries are playing their role. Some of the industry innovators offer their perspectives…

For some time green initiatives have rated high for the A.P. Moller - Maersk Group which

reduced its emissions of CO2 and other greenhouse gases by 6.9% in 2009 compared to the year before, according to the Group’s sustainability report.

“This report signals our continued efforts to be more accountable and transparent,” says Annette Stube, head of sustainability for the Group.

The company’s environmental strategy is based on energy efficiency in all its business activities.

“Maersk Line has set an ambitious goal of a 20% reduction of CO2

emissions per container transported by 2017,” says Stube.

Based on the premise that sustainable development is essential for society and business to thrive and grow, the line is committed to integrating sustainability into all its business operations and making its performance transparent to its stakeholders, she added.

“Continual technological innovation

further increases Maersk Line’s ability to reach its CO2 reduction targets. It is aggressively pursuing technical solutions including waste heat recovery systems, which are standard on all its new ships (reducing CO2

emissions by 10%). Two other examples are optimised hull designs (resulting in almost 8% reduction in CO2 emissions) and auto-tuning of its main engines.

“Many other innovative solutions are

being investigated and tested ranging from the use of alternative energy sources such as biofuels to new types of hull paint, optimised propellers, air lubrication, fuel switches and new voyage planning systems.

Maersk sets 20% emission reduction target

Maersk Line is aggressively pursuing technical solutions including waste heat recovery systems, which are standard on all its new ships.

greening the supply chain

APRIL 2010 | 15

Environmentally responsible shipping lines are not only improving their ‘green

credentials’ through slow steaming and the introduction of more fuel-efficient tonnage, they’re also choosing greener and cleaner methods for the disposal of vessels.

A recent example is Safmarine’s conscious decision not to sell the 24-year-old Safmarine Cotonou when she reached the end of her service, but instead to opt for the vessel’s ‘green recycling’ at the ISO 14001-accredited Changjiang Ship-breaking Yard in Jiangyin, China so that a significant portion of the vessel could be reused.

Watching a ship being ‘green’ recycled is much like watching a ship being built – only in reverse – for the same care and attention to detail which would accompany the construction of a vessel is applied to its deconstruction, says Filip Geerts, Safmarine’s

Antwerp-based health, safety and environment manager.

“Green or clean recycling of ships is a trend which is definitely gaining favour as ship owners show increased responsibility towards the environment and the cost gap between ‘clean’ and ‘traditional’ recycling continues to narrow,” explains Geerts.

He says ship owners – initially opposed to the idea because of the perceived, significantly higher cost – are now realising the value, both economically and environmentally, of dismantling and disposing of the vessel in a ‘green way’.

“Green recycling of ships needn’t be cost prohibitive. As Safmarine we were kept informed, at all times, of the costs associated with the recycling of the vessel and there were no hidden costs or surprises – a refreshing change from using the traditional beaching method where shipbreakers often ‘reopen’ negotiations after the vessel has been grounded and can no

longer be moved.”Geerts explains several steps were

involved in clean recycling of the Safmarine Cotonou, a process which took three months from start to finish.

“After the crew disembarked, the vessel underwent a pre-inspection to obtain her Green Passport. This involved establishing an inventory of all materials, operationally generated wastes and stores on board.

“Several ‘surveys’ were then conducted with a focus on identifying any ‘toxic’ materials. Every loose item was collected and disposed of in an environmentally sensitive manner. Safe access was created after fumigation of the vessel to ensure sufficient light and ventilation holes and only when all items were safely removed and the vessel pre-cleaned, was it time to cut the steel structure.”

‘green’ recycling of cotonoua first for Safmarine

Several components of the ‘green recycled’ Safmarine Cotonou were sold for re-use. This photograph shows the offloading of the ship’s giant propeller.

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At Qatar Airways environmental initiatives continue to get the green light as the airline sets about its

goal of becoming one of the greenest in the world.

Having in 2009 joined the Aviation Global Deal Group that aims to develop a global policy dealing with carbon emissions, the airline has also partnered with Iata in establishing a carbon offset trading assurance which will offer passengers the opportunity to fly carbon neutral.

“We take environmental conservation very seriously and continue to adopt steps in our efforts to become one of the greenest airlines in the world,” says a spokesman for the

company.In October last year the airline

made aviation history when it saw the world’s first commercial passenger flight powered by alternative jet fuel produced from natural gas take to the air. This milestone flight was the first step in making this alternative fuel available to airlines.

“The fuel burns with lower sulphur dioxide and particulate emissions than pure conventional oil-based kerosene, making it attractive for improving local air quality at busy airports. GTL Jet Fuel offers airlines access to alternative oil-based conventional fuels. This diversity of supply for the industry – gas-based rather than oil-based –

will add a high quality drop-in blend component to the global jet fuel pool for many decades to come,” says the spokesman. In January this year Qatar Airways announced its entry into the next phase of alternative fuels with a decision to jointly carry out engineering and economic analysis to develop sustainable bio jet fuel that will also look into ways for production and supply, with the support of Airbus.

“It is about leading the charge towards environmental sustainability and corporate social responsibility,” says the airline in a statement. “”We are committed to the environment and want to position ourselves as a leader in new-generation fuel research.”

16 | APRIL 2010

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Alternative jet fuel flight

With paperless trade fast becoming a reality, Core Freight Systems is increasingly catering for its clients’ changing needs – and at the same time contributing to ‘greening’ of the environment.

“With CoreDocs we have extended our original document imaging concept from providing an application for archiving on a historical basis to facilitating the real-time filing of all documents required for the complete processing of a shipment file,” says head of customer support, Glenn Lawson.

“We envisage an environment where a “document controller”, possibly the traditional channel controller, will automatically upon receipt electronically file all relevant supporting documentation pertinent to the file, either as input to the further processing or as evidence of work completed. This includes e-mail correspondence, excel spreadsheets,

proof of deliveries, in fact any data you wish to record against a file. Any data received electronically need not be printed but can be sent direct to the filing system which is automatically created upon the original file registration within CoreFreight.”

To ensure the efficient processing of any hardcopy documents which need to be stored, a set of barcodes may be printed at the time the file is opened in the application, says Lawson. These barcodes may be used in the scanning and input process to ensure complete accurate filing of all documents under appropriate headings, either by using them as leadsheets on a batch of papers loaded in a document scanner or input via a handheld barcode scanner. “Master data documents are also addressed in the functionality and, for example, the signed/approved credit application can be filed against a debtor file in CoreFreight,” says Lawson.

Electronic filing saves the forests

Glenn Lawson ... facilitating the real-time filing of all documents.

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