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Rail News: Logistics

South Africa's Transnet crafts seven-year plan to shift modal focus on rail


On Tuesday, South Africa’s Transnet SOC Ltd. unveiled a seven-year, $38 billion Market Demand Strategy (MDS) designed to expand rail, port and pipeline infrastructure to spur a modal shift from road to rail and boost volumes of iron ore, coal and manganese.

MDS’ main objective is to expand rail capacity to meet market demand and enable economic growth, Transnet officials said in a prepared statement. The plan will catapult Transnet Freight Rail (TFR) — for which the company expects to spend about $26 billion on various infrastructure projects — into the world’s fifth-largest freight-rail company, they said.

By 2019, freight-rail volumes are projected to increase from 200 million tons to 350 million tons, TFR’s market share of container traffic is expected to climb from 79 percent to 92 percent and container volumes handled by ports are forecasted to rise from 4.3 million to 7.6 million 20-foot equivalent units.

“Studies conducted by Transnet show that rail in South Africa is on average 75 percent cheaper than road transport,” Transnet officials said. “In addition, the large-scale shift from road to rail will address costs and congestion, and reduce carbon emissions.”

The successful implementation of MDS also will triple annual revenue from about $6 billion to about $18 billion and position Transnet as a “top-tier” logistics and transportation provider over the next seven years, they said. The company plans to increase headcount 25 percent by 2019 to support the projected business growth.

Transnet’s five core operating divisions are TFR, the Transnet National Ports Authority, Transnet Port Terminals, Transnet Rail Engineering and Transnet Pipelines.