Transnet Freight Rail (TFR), in conjunction with ArcelorMittal South Africa (AMSA), Barloworld and Grindrod Logistics, have launched a ‘steel hub’ at TFR’s Elandsfontein yard to migrate steel volumes that are being transported by road back onto rail.
Two years after first deliberations, last week the first train travelled from AMSA’s plant, in Newcastle, KwaZulu-Natal, to the steel hub/distribution centre, in Elandsfontein, south-east of Johannesburg.
“The strategic importance of the steel hub is that it is an execution of the back to rail strategy, which will strengthen customer relationships and ensure long-term contracting with . . . AMSA,” TFR said in a statement on Monday.
The rail parastatal provides AMSA a “dedicated service”, with dedicated resources and time slots on agreed upon days, with the railed steel then transported by Barloworld-managed road cartage trucks for delivery to customers.
The steel hub in Elandsfontein is intended as an interim distribution centre over the next two to three years, with a permanent distribution centre being built at Grindrod’s premises, in Denver.
In addition to reduced carbon emissions and road congestion, TFR pointed to reduced lead times for AMSA’s customers domestically and cross border, while stimulating growth in market share of outbound steel on rail from the current 13%, or 400 000 t, in 2016/17 to 34%, or one-million tons, in the 2017/18 financial year.
“It is guaranteed to capture and increase the steel portfolio market share on finished steel products, which is considered rail-friendly traffic,” TFR commented.
Edited by: Creamer Media Reporter
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