What belongs where?

Andre BothaChairman of SASTaLC

Discussion of today

• Rail history – Cargo on rail and why

• Why cargo migrated

• Cargo movement

• What is happening internationally

• What is the drivers of freight cargo and passenger rail

• What belongs on rail – rail friendly cargo

• Cargo types for rail freight

• People and rail

• Are we getting there

Rail history – Cargo on rail and why?

• Merchandised rail began 1820’s in the industrial era and steam locomotives

The Trevithick’s steam engine. First locomotive

• First sign of rail wagon by the Greeks and they had wagon ways 1500-1800

• Stimulated the economy and the transport of good that created a social change

• First passengers on board 1842

• South Africa’s first rail track 1850 - 3.2 km from Durban to harbour point

Greek wagonways

“A good horse on an ordinary turnpike road can draw two thousand pounds, or one ton. A party of gentlemen were invited to look upon the experiment, that the superiority of the new road might be established by ocular demonstration. Twelve wagons were loaded with stones, till each wagon weighed three tons, and the wagons were fastened together. A horse was then attached, which drew the wagons with ease, six miles in two hours, having stopped four times, in order to show he had the power of starting, as well as drawing his great load.”

Rail history – Cargo on rail and why?

Reduction in friction was one of the major reasons for the success of railroads compared to wagons. This was demonstrated on an iron plate-covered wooden tramway in 1805 at Croydon in England

Fling, Harry M. (1868). Railroads of the United States, Their History and Statistics. Philadelphia: John. E. Potter and Co. pp. 12, 13.

Train load of coal

Why freight cargo migrated

• Core driver for a service is the customer requirements• Customer focus and strategy – JIT• Capitalise on speed• On time delivery• Throughput handling and delivery efficiency

• Network or service provider offering deficiencies• Capacity constrains• Flexibility• Security

• Not just price – added reliability

• Need for infrastructure – In SA

State of Logistics Survey for SA - Report 1-10

Freight cargo movement

9th State of Logistics Survey for SA 2012

Rail market share since 2003

What happened internationally and why?

Rail transport marker research report (March 2013)State of Logistics Survey in SA (2008)World Bank (2014)

• Freight cargo in UK and Europe migrated

• Freight Cargo in the USA did not migrate

• Factors that caused migration

• Globalisation and predictability

• Containerisation duel role and influence

Underlying matters –

If service delivery is poor, good service connectivity is not good enough

What is the drivers for passenger services and freight rail

Passengers

• Population

• Energy

• Economy – Growth and Globalisation

• Technology

• Social Choices

Freight rail

• Volumes to be moved

• Cost

• Logistics supply chain dynamics

• Technology

• Customer preferences and strategy

Amadeus rail report (2013)

What belongs on rail

• Does all cargo belong on rail ?

Havenga JH, Simpson Z, Fourie PF and De Bod A (2007)

• What is rail friendly cargo?

• Dr De Villiers, Prof Jan Havenga

• Definition –

• Cargo with freight uniformity

• Long distance

• Density

• Terminal density

Cargo types for rail

Havenga JH (2007)

• Traditional – Bulk commodities

• Coal, Iron ore, minerals, magnetite chrome ore etc.

• Steel, grain and cement

• Automotive

• Palletised cargo – Food beverages, textile, parts

• Containerised cargo – Unitised in the container – Light bulk and precious break bulk – Zinc, copper

Prof Havenga wrote an article –Rail renaissance based on strategic segmentation (2012)

People and rail

Amadeus rail report (2013)

• Drivers that shift people towards rail

• Urbanisation

• Technology – High speed trains

• People awareness for the need to go green

• Distribution and network is better

High speed train for freight cargo and not airfreight

Are we getting there?

Thompson L (2010)

• China and India – passenger freight is increasing

• Europe + USA + Japan

Stable growth in freight transport and passenger transport, passenger transport growth is lower than freight

South Africa ?

Are we getting there?

• Who knows ?

• Economical and political recognition• Eskom Road to Rail

• Mpumalanga freight reduction

• National Development Plan and infrastructure drive

• Transnet Long Term Planning Framework (MDS)

• Carbon emission and taxes

• Data do not show but the preparation look that it is surely moving in the right direction

Thank you

What belongs where?