Intermodal renaissance for big benefits
With road congestion, environmental issues and the high cost of logistics increasingly under the spotlight – and hampering the country’s ability to compete in the global marketplace – the time is ideal for an “intermodal renaissance” that will enable South African companies to leverage the strengths of both road and rail freight transport. This is the contention of Gebisa Ledwaba, rail projects executive at Imperial Logistics.
While road congestion worsens, rail has excess capacity. “The current utilisation of rail freight transport between Gauteng and Durban is around 30 percent of capacity,” says Ledwaba. With some 600 km between the two cities, the distance provides an ideal opportunity to leverage the advantages of rail, which yields the greatest economic benefits over long distances and for volume transport.
Intermodal transport is defined as the transportation of unitised (generally containerised) cargo using multiple modes of transport (ship, rail and road). “The intermodal transport strategy of Imperial Logistics encompasses increasing the amount of appropriate product movement on rail infrastructure, and we will contribute towards converting existing road freight transport to rail freight transport in Southern Africa,” he explains.
Outlining the benefits of rail, Ledwaba notes that it is more economical and fuel efficient than road transport. The hybrid transport solution presents unique benefits by combining the cost advantage presented by economies of scale, cheaper fuel and labour costs of trains over long haul, with superior service qualities of road trucks and flexibility of road freight transport over short distances.
Further factors in favour of rail are its environmental benefits; less noise and air pollution and lower carbon emissions. “With a carbon tax on the cards, the ‘greening of the supply chain’ issue is not just about being environmentally aware. It will also become an important financial consideration in future,” Ledwaba states.
Additional benefits of rail transport are lower costs of road maintenance, policing and accidents. “Our growing population is contributing to an ever-increasing number of road users, more congestion on our roads and greater strain on our road infrastructure. Moreover, the total externality costs (accidents, CO2 emissions, congestion, noise and policing) for South Africa in 2010 are estimated at R27,8 billion, yet are unaccounted for in financial statements of the users of the logistics system. Some of these costs will be internalised through taxation and similar mechanisms in the near future and should therefore not be ignored, according to the 8th annual State of Logistics Survey 2011. And the costs aren’t just financial,” stresses Ledwaba. “We must also consider the unacceptably high death toll on our roads.”
The global intermodal experience and expertise of Imperial Logistics is founded on its international business units, Freightmax, neska and Imperial Shipping, which have been operating in this arena for decades. The group has the technical knowledge and skills to successfully coordinate intermodal transport in Southern Africa. It also boasts a significant geographic footprint into Africa. “In terms of the benefits of intermodal transport, one plus one equals three,” concludes Ledwaba.