PRESENTATION

BY

FREIGHTDYNAMICS

TO

NATIONAL GOVERNMENT

04 April 2001

FORMAT

Background

Organizational structure

Vision

Mission

The promise

Nature and scope of business

Strategic direction

Size of business

• Financials• People• Markets

Challenges for 2001/2002

Transformation

Conclusion

Questions

BACKGROUND

- An evaluation of Transnet’s road freight transport capabilities was conducted to determine an optimal positioning of these activities.

- The entities evaluated were

Autonet FreightSpoornet Cartage Portnet RTS

- Key findings were

- Duplication and overlap in management, structures and responsibilities

- The above resulted in:

- Internal competition and friction

- Poor communication; inefficient business processes, lack of performance measurement and accountability

- Replication of maintenance, administrative, operational facilities and services

- Lack of focus and strategic direction

- The decision was to consolidate the three entities and create a focused and professional road transport and logistics business within Transnet.

- This would position Freightdynamics, in size, as one of the top four transport companies in South Africa.

BACKGROUND(Continued)

ORGANISATION STRUCTURE

FREIGHTDYNAMICSCORPORATE

FREIGHTCONTAINERS

VISION

Freightdynamics is a world classroad freight transport and related

services business, committed to creating value for all our stakeholders

MISSION

Through leveraging our core competence in transport and logistics, we will deliver solutions that give our customers the competitive advantage.

THE PROMISE

To deliver transport solutions that give our customers a competitive edge

NATURE AND SCOPE OF BUSINESS

Freightdynamics is being recognized as a professional road freight transport company.

• Our services cover a wide range of transportation and related activities.

• Our competitive edge lies in our well established infrastructure country wide and in the wide range of services which we offer.

• We are committed to finding transport solutions for our customers which are efficient and cost effective, whilst profitable to ourselves.

• We see ourselves where necessary, assisting Transnet as the flexible link in a seamless delivery service to the customer.

• Our target market is companies throughout Southern Africa, with an emphasis on volume contracts and long term relationships.

• Our status will rank with the largest road freight haulers in Southern Africa.

STRATEGIC DIRECTION

• Create a financially sound and sustainable business

which adds value to Transnet.

• Identify and create sustainable competitive advantage.

• Develop and retain the most competent workforce in the industry.

• Create a business oriented culture.

• Promote and facilitate Employment Equity and Black Economic Empowerment.

• Support and facilitate the government’s transformation, restructuring and economic growth policy.

• Consider a Black Empowerment shareholder for Freightdynamics.

SIZE OF THE BUSINESS

Financials:

2001/2 2002/3 2003/4

• Turnover 812 877 996

• Net Profit/(Loss) (34) (3) 23

• Capital Expenditure 127 90 26

• Capital Employed 250 355 380

SIZE OF THE BUSINESS(Continued)

People:

Corporate office : 26

Freight : 801

Containers : 1139

Total : 1966

LABOUR REPRESENTAVITY:

SATAWU : 52%

SALSTAFF : 16%

UTATU : 22%

Non-unionized : 10%

Transnet’s policy threshold is 15% representation forrecognition

Freightdynamics will therefore recognize SATAWU, SALSTAF and UTATU.

SIZE OF THE BUSINESS(Continued)

Markets:

Fuel Industries

Cement Industry

Fast Moving Consumer Goods

Beer Industry

Refrigerated Market

Overnight Deliveries

General Freight

Container Shipments

CHALLENGES 2001/2

Growth target of R168m ( 26% )

Capital investment of R127m

Improving profitability

Customer service

Containing costs

Re-assessing job and people profiles

Increasing asset utilization

Integration of IT systems

Embarking upon a quality system

Continue with transformation

Improve governance

Introducing HIV/AIDS programme

Introduction of performance management system

Improving BEE spend

Implementation of risk management programme

Cement relationships with unions

TRANSFORMATION

Includes:- To create a management leadership style that leads by example and fully supports equal opportunities within the organization.

- The new business necessitates a different structure, defining of jobs and roles, systems and culture.

- Improve overall operating efficiencies.

- The commitment to employment equity.

- The commitment to develop and support BEE and form partnerships.

- To adapt the Protocol on Corporate Governance. - To set the norm of “Zero Tolerance” for fraud.

- To train and develop our employees.

- To implement an effective performance management scheme.

- To implement the Balance Scorecard.

- To implement an appropriate risk management program.

- To increase the value of the business.

TRANSFORMATION

Attain Market Share

2002

2000

2001

Consolidate Business Merging culturesArresting LossesSocial ResponsibilitiesPerformance Criteria

GrowthProfitableTransformedWorld ClassPrivatization

Market GrowthCapital InvestmentCustomer ServicePeople AlignmentProductivity ImprovementTransformationPeople Development

CONCLUSION

Freightdynamics is a young company which has been faced with many challenges during the past year.

Much of the focus has been on internal matters in order to develop a sound foundation on which to build this business.

The focus for this year is primarily directed at growth and capital investment.

Growth has been carefully calculated and though we are targeting huge growth, the management team of Freightdynamics is convinced that given the current marketing opportunities, this goal is attainable.

In order to improve our visible image in the market place as well as to achieve the envisaged operational efficiencies and customer satisfaction, it is imperative that we continue with the injection of new vehicles into our fleet.

In essence it is of utmost importance that Freightdynamics produces results this year.