Minister Barbara Creecy has brought a new level of focus and energy to the Department of Transport giving business confidence that we can make progress in dealing with our logistics crisis.
The minister addressed the BLSA Council last week and painted a remarkably clear vision for what she wants to achieve for the logistics system.
There are five numbers the minister gave us as targets for the next five years.
First, she wants to get the amount of freight shipped by rail up to 250Mt per year.
That would be a marked increase from the 149Mt achieved in the last Transnet financial year and would significantly exceed the record for freight volumes of 227Mt set in 2015.
Second, she wants to get port operations up to 25-30 crane moves per hour.
That is against a current average of 15-18.
That improvement would remove the long lines of trucks waiting at ports and ensure ships don’t sit waiting for port access for anything up to 10-15 days at a time.
That would substantially reduce the costs faced by businesses across the economy and improve competitiveness.
Third, she wants to get passenger journeys of Prasa up to 600m per year.
That would be an enormous increase from the 40m journeys last year.
Fourth, she wants to increase the number of passenger visits at our airports to 30m per year.
Fifth, she wants to increase air freight to 1.2Mt per year.
The minister then went into the work being done to deliver on these targets.
At Transnet, a war room has been set up with user forums that can work directly with the SOE to improve efficiency.
Already, performance has improved to a run rate of 160Mt per year.
Part of the effort is the establishment of a private sector partnership unit to be run from DBSA that will manage unsolicited bids to work on and manage Transnet’s infrastructure.
The minister emphasised the importance of working with the customer, ensuring that goods from fruit to coal are managed appropriately, fitting the needs of users.
She also highlighted the risks of competition – that Walvis Bay will compete for fruit traffic if Cape Town doesn’t improve, while Maputo will compete for coal if Richard’s Bay doesn’t.
This acknowledgment of the positive impact of competition was welcome.
I think we can take a lesson from that – how can we get competition going domestically, so that SA ports and rail lines can compete with each other, rather than only having to worry about ports in neighbouring states?
One obvious way is to provide for further concessions of ports and rail. Imagine Durban was competing with Richard’s Bay, instead of only worrying about what’s across the border.
While there is clearly an appetite to work with the private sector, both closely 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.
At Prasa, good progress is being made too, with the minister noting that 31 of 40 priority lines have been recovered so far, and three more lines are 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.
Again, this is highly encouraging.
The minister also pointed to plans for major investment in air freight infrastructure including at OR Tambo, work that was stalled by Covid and will now restart.
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.
It is another positive signal from the Government of National Unity, adding to the sentiment fostered by ministers ranging from home affairs to trade, industry & competition, and others.
I was really struck by the clarity of vision – what success looks like and clarity on what needs to be done. If the minister delivers, there will be a material improvement in the costs of doing business.
Logistics is a critical component of competitiveness – no matter how good our manufacturing or mining sectors are, if we can’t get goods to and through ports efficiently, we will not be competitive in global markets.
Fixing logistics would directly drive economic growth, creating jobs and revenue to improve the quality of life for all South Africans.
Organised business is an enthusiastic partner in the effort to do so, and I look forward to working with the minister to see her vision become reality.
*This column was first published in the Business Leadership South Africa (BLSA) weekly newsletter. The author Busisiwe “Busi” Mavuso, is the CEO of BLSA.
*The views Busi Mavuso expresses in this column are not necessarily those of The Bulrushes
