Friday, August 21, 2009

Growth of Container Rail Freight in South Africa

Transnet Freight Rail makes inroads into haulage market
Shipping News Feature

SOUTH AFRICA – Transnet Freight Rail (TFR) have announced their intention to spend 55 million Rand to modernise facilities at the City Deep container terminal, the Johannesburg inland port, but have deferred some of the 1.7 billion Rand they had been planning to invest in the development of their container business due to the economic climate.

Rather than the proposed capital investment the rail freight carrier, largest division of the Transnet Group, which maintains an infrastructure representing about 80% of South Africa’s rail system and employs around 25,000 people, will seek traffic where they already have spare capacity.

Rail freight in South Africa is estimated to cost 35% less than road on average. TFR claim to have increased their share of traffic on the Johannesburg – Durban route from 22% last October to 30% this month. TFR are also targeting the country’s temperature controlled container market which accounts for 220,000 export teu’s per annum. They currently only move around 2% of this trade but say they plan to develop their share of the market to carry up to 50% of the trade.

Despite the attraction of rail, the system is still plagued by problems including cargo security, cable theft and derailments.