Report: Visit to Durban, City Deep and Pretcon Container Terminals, dated 5 June 2002:
The Portfolio Committee on Transport, having undertaken a tour of Durban, City Deep and Pretcon Container Terminals on 29 April and 3 May 2002, reports as follows:
A. Introduction
The Committee embarked on a fact-finding mission to establish the role played by the container terminals and private freight operators in promoting the use of rail. Also considered was what is being done to attract freight from road to rail; whether there are any factors that may impact negatively on the use of rail; and, lastly, what could be done in the short term to make rail a naturally preferred mode of transport.
This follows a Cabinet decision to support a movement of freight from road to rail. The Committee, in exercising its oversight function, took it upon itself to meet with relevant stakeholders.
A multi-party delegation of four members took part in a visit to Durban on 29 April 2002 and to Gauteng on 3 May 2002.
GAUTENG DURBAN
Mr G Schneemann (Group leader) Mr G Schneemann
Mrs D N Mbombo Mr N Magubane
Mr S Farrow Mr S Farrow
Mr J J Niemann Mr J J Niemann
In order to examine these important issues, the delegation visited two major container terminals (City Deep & Pretcon) operated by Spoornet, and Durban Container Terminal operated by South African Port Operations (SAPO), and met with the following private freight operators:
1. Rail Road Africa
2. Cross Country Containers
3. Roadwing
4. MSC Logistics
5. Intermodal
6. Bidfreight Transport
7. Container Liners Operator Forum
8. Vigomaud Transport
B. Durban Container Terminal (DCT)
1. Background
The DCT is situated in a strategic position. There are three modes of transport used at DCT - road, rail and coastal shipping services. Of the cargo that is handled, 75% moves by road, with 40% in the Durban area and 30% to destinations beyond Durban. The split of cargo by transport modes is 75% road and 22% rail, with the remaining 3% being shipped via coastal services.
DCT handles 65% of the country's container volumes.
SAPO supports the view of moving cargo from road to rail because they strongly maintain that it is easier to load 100 containers onto a single train than onto 100 individual road vehicles.
Their main concern is the extent to which rail is ready to handle the shift. At the present moment there are challenges that need to be addressed in order to see the desired shift of containerised freight from road to rail.
2. Constraints facing SAPO
The constraints facing SAPO include:
(a) High rate of copper cable theft causing train delays.
(b) Transit time by rail on the Johannesburg/Durban leg is five to seven days and 24 hours by road.
(c) There is a shortage of locomotives, causing trains to be delayed in the marshalling yards.
(d) Theft of cargo occurs while being transported on rail.
(e) Insufficient interface and compatibility of computer systems, which cause delays in transport due to insufficient information being available. It was claimed that 30% of containers arrive with incorrect information, and 15% of export containers arrive late for their vessels.
(f) Rail tariffs are higher than road transport rates.
(g) Shortage of straddle carriers.
(h) Shortage of wharf-side cranes.
(i) Capacity of piers and rail terminal.
3. Solutions
Solutions to these challenges include:
(a) More visible security alongside rail tracks in order to curb theft of overhead cables.
(b) Turnaround times of trains and transit times need to be improved.
(c) Spoornet and SAPO need to interact more closely to address the current challenges.
(d) Streamlining of supply chain towards a fully integrated seamless transport system.
(e) Streamlining of interface with Customers and Spoornet.
(f) Proposed repositioning of mobile cranes from Richards Bay and the combi terminal.
(g) Introduction of 60 new straddle carriers by the end of 2002.
(h) Proposed extension of Pier 1, which includes a new small rail terminal.
4. Freight operators
When the delegation met with the freight operators, it was clear that there was insufficient interaction between Spoornet, SAPO and themselves. They alluded to the fact that they supported the shift of freight from road to rail but that Spoornet and SAPO needed to address the existing challenges that impact on the smooth operation of rail.
5. Constraints
The freight operators underlined the following constraints:
(a) Delays in loading/offloading vessels causes additional costs and also causes a shift of freight onto road.
(b) There is a shortage of locomotives and poor utilisation of rail wagons, including a short supply for the rail of empty containers, which results in congestion and delays.
(c) Rail tariffs promote the use of road rather than rail.
(d) There is no synchronisation of operating times between terminals. DCT operates on a 24-hour basis while City Deep operates from 06:00 to 17:00.
(e) The need for the Department of Transport (DOT) and the Department of Public Enterprises (DPE) to have a common vision regarding the moving of freight from road to rail.
(f) Slow turn-around of vessels.
(g) Service Level Agreements (SLA) do not seem to work.
C. City Deep and Pretcon Terminals
1. Background
According to Spoornet, City Deep was planned specifically as a transit terminal for containerisation. It is situated close to the industrial areas of Gauteng. City Deep and Pretcon only deal with import and export containerised freight. Spoornet operates both City Deep and Pretcon terminals, which are inland terminals that provide an essential intermodal link between road and rail. City Deep handles eight trains per day and has the capacity to handle 2 400 containers per day, but currently operates at 50% of capacity. Pretcon handles four trains per day and has the capacity to handle 1 000 containers per day.
In order to increase container security on rail, rail wagons have been modified to prevent container doors from being opened. Spoornet has 24-hour security in the marshalling yards.
To make it easier for clients to track and locate their containers, Spoornet has designed a website where container information can be provided.
2. Constraints facing Spoornet
(a) No planned movement of containers from the port to the customer is provided.
(b) Unplanned storage in the terminals causes congestion.
(c) There is a lack of communication and information sharing between Spoornet, cargo owners and freight operators.
(d) Vandalism, crime and theft are a challenge in operating rail.
3. Freight operators
All the representatives of private freight operators agreed that rail is the best method of transporting containerised freight. Their concern was that the current situation was not encouraging the use of rail.
4. Constraints
(a) Quality of service is poor and not predictable.
(b) Rail tariffs promote the use of road instead of rail. 65% of City Deep/Pretcon-bound containers are transported by road from the coast.
(c) There is a lack of capacity at Spoornet.
(d) Operating hours of inland terminals need to be extended.
(e) Constant changes in management cause a loss of experienced staff.
(f) Spoornet needs to invest in new rolling stock and human resources.
(g) Insufficient law enforcement of road transporters takes place.
(h) Information on the Spoornet website is often incorrect.
(i) There is insufficient planning on the part of Spoornet.
(j) The motor industry volumes have grown by 56%, while the infrastructure has remained the same.
5. Interaction with Spoornet
Spoornet alluded to the fact that they do have capacity problems. They have monthly meetings with the operators in order to address issues which need to be resolved.
Around the issue of security at City Deep, excellent co-operation between Spoornet and the operators had been achieved and as a result safety and security have improved tremendously.
D. Recommendations
1. Rail transit times and the turnaround of trains need to be reduced.
2. Security needs to be increased along rail lines to curb the theft of overhead cables.
3. Planning and utilisation of rail wagons need to be improved.
4. Operating hours of inland terminals should be reviewed.
5. Rail tariffs need to be reviewed to ensure that they are competitive with road transport.
6. More effective policing of road transporters needs to take place.
7. Service levels need to be reviewed and improved to promote the use of rail.
8. Spoornet and SAPO need to work together as a team to promote the use of rail.
9. Introduce dedicated container trains with locomotives.
10. Ensure effective law enforcement on overloaded and under-declared containers entering container terminals.
11. Labour relations need to be improved to prevent strike-related action.
12. Communication with customers needs to be improved.
13. Rail of export containers needs to be given priority.
14. Accuracy of the website needs to be improved.
15. Investigate joint venture options with stakeholders.
16. Empower middle management to improve decision- making processes.
17. Make available a copy of the Halcrow recommendations to the Committee.
E. Acknowledgements
The Committee wishes extend its gratitude to Transnet for hosting the delegation, and also thanks Spoornet, South African Ports Operations and all the private freight operators for their participation.