'Clear vision' for logistics reform encouraging – Mavuso

“The clarity of vision” provided by Transport Minister Barbara Creecy on what success in terms of logistics reforms looks like and what needs to be done to make progress in dealing with the logistics crisis has boosted business confidence, says business organisation Business Leadership South Africa (BLSA) CEO Busi Mavuso.

“If the Minister delivers on the targets, there will be a material improvement in the costs of doing business,” Mavuso adds.

Creecy provided a range of targets during an address to the BLSA Council.

“Logistics is a critical component of competitiveness. No matter how good our manufacturing or mining sectors are, if we cannot get goods to and through ports efficiently, we will not be competitive in global markets,” Mavuso says.

Creecy told business leaders that she wanted to get the amount of freight shipped by rail up to 250-million tonnes a year.

This will be an increase of 149-million tonnes a year from what was achieved by Transnet in its previous financial year and would significantly exceed the record for freight volumes of 227-million tonnes set in 2015, notes Mavuso.

Creecy also said she wanted to get port operations up to 25 to 30 crane moves an hour, up from the current average of 15 to 18 cranes moves an hour.

“This would remove the long lines of trucks waiting at ports and ensure ships do not sit waiting for port access for 10 to 15 days at a time. This would substantially reduce the costs faced by businesses across the economy and improve competitiveness,” notes Mavuso.

The Minister wants to grow passenger journeys on public passenger rail service Passenger Rail Agency of South Africa (PRASA) to 600-million a year, which is a significant increase from the current 40-million journeys in 2023.

Creecy also told the BLSA Council that she wanted to increase the number of passenger visits at South Africa's airports to 30-million a year and increase air freight to 1.2-million tonnes a year.

Specifically, a war room has been set up with user forums that can work directly with State-owned transport agency Transnet to improve efficiency.

Performance has since improved to a run rate of 160-million tonnes a year, Mavuso points out.

Part of the effort to improve Transnet's efficiency includes the establishment of a private sector partnership unit to be run from development finance institution Development Bank of Southern Africa that will manage unsolicited bids to work on and manage Transnet’s infrastructure.

Further, Creecy emphasised the importance of working with the customer to ensure that goods from fruit to coal were managed appropriately and fit the needs of users.

“While there is clearly an appetite to work closely with the private sector, including with customers and through partnerships to operate infrastructure, the minister pointed to many legal complexities.

“We hope that these complexities can be managed better to ensure smoother and faster engagement to get results as soon as possible,” says Mavuso.

Fixing logistics will directly drive economic growth, create jobs and increase revenue to improve the quality of life for all South Africans.

“Organised business is an enthusiastic partner in the effort to do so, and BLSA will work with the minister to see her vision become reality,” she adds.

Further, at PRASA, good progress is being made, and Creecy noted that 31 of 40 priority lines had been recovered so far, and three more lines were due to be recovered by the end of this year.

The remaining six, though, are the toughest, having experienced the most theft of signalling equipment and even rail.

PRASA is also working on options to supplement its budget using its property portfolio and the potential of retail at its transport nodes, which is highly encouraging, says Mavuso.

The minister also pointed to plans for major investment in air freight infrastructure including at OR Tambo; work that was stalled by Covid-19 and will now restart, she adds.

“The minister has rapidly taken on one of the most challenging portfolios in government, and one that has a very clear and immediate impact on our economy.

“The speed with which the minister has taken on the task and the straightforward approach to setting targets and driving delivery is encouraging,” says Mavuso.