Freight Rail Also Commodity Prices, Which Negatively Impacted Customers’ Markets, Manganese Met Export Volumes of 7,2Mt
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Musina Louis Trichardt Groenbult MOZAMBIQUE FREIGHT BOTSWANA Lephalale Polokwane Phalaborwa Vaalwater Zebediela Steelpoort RAIL Middelwit Modimolle Marble Hall Nelspruit Komatipoort Witbank NAMIBIA Mafikeng Kaapmuiden Vermaas Ermelo SWAZILAND Ottosdal Vereeniging Vryburg Hotazel divisionKle operatesrksdorp world-class, heavy-haul coal and iron The 2016 operating context was characterised by lower HIGHLIGHTS Pudimoe REGULATORY ENVIRONMENT Makwassie Vrede ore exportKr oolines,nstad and is developingVryh etheid manganese export than anticipated economic growth and significantly lower Nakop Sishen Warden Despite the decline in the manganese and iron ore Developments in rail policy and transport economic Upington Veertien Stcorridorrome V itorginia meet heavy-haulHarrismith standards. Freight Rail also commodity prices, which negatively impacted customers’ markets, manganese met export volumes of 7,2mt. Bethlehem regulation could result in changes for the South African Kimberley transports a broad range ofLa dbulkysmith general freight commodities operations and their demand for rail services. Further, the The Container and AutomotiveKakamas business unit achieved transport industry. The Department of Transport (DoT) Douglas and Bcontainerisedloemfontein freight. CommoditiesRich aarerds Ba yrailed across prolonged drought reduced the transportation of record performance, with the Tutuka Containerised Koffiefontein has embarked on a process of consultation for the Belmont approximatelyLESOTHO 20 500 kilometres (30 400 track agricultural commodities, which together with weakened Coal team clearing 33 trains from the mines and Pietermaritzburg development of the Green Paper on National Rail Policy kilometres) of rail network, of which approximately customer demand, adversely affected Freight Rail’s Franklin Durban offloading 33 trains at the terminal, against a Springfontein and the establishment of a Single Transport Economic 1 500 kilometres compriseHarding heavy-haul lines. volume performance for the year. De Aar Aliwal North Regulator (STER). budgeted train plan of 30 trains.Sakrivier Port Shepstone Maclear Freight Rail achieved a record number of automotive NoupoortThe network includes 3 928 kilometres of branch lines In light of muted economic growth – and the uncertain Calvinia Rosmead Rail Infrastructure Hutchinson Umtata The Minister of Transport has proposed legislation that units on rail, with a 9% year-on-year increase to Hothatfmeyer serve as strategic feeders to main lines. The network timing and rate of global economic recovery – Freight Rail Queenstown • 30 400 km of track limits goods vehicles with a gross vehicle mass exceeding 238 407 units. and rail service provide strategic links between ports and has to revise the timing of strategic investments in rail. • 20 953 route km 9 000 kilograms from operating on public roads during Beaufort West production hubs, and connect with• Core the network: railways of the Albeit with a somewhat scaled-down approach, the Porterville 12 801 route km Klipplaat Cookhouse peak traffic hours. The development of this proposal – Saldanha SouthernBlan eAfricany East Lon Developmentdon Community, thereby objective for capacity creation will continue in the year Prince Alfred Hamlet Alicedale • Network electrification BUSINESS OVERVIEW Oudtshoorn and its potential impact on the transport industry – will supporting regional integration. Freight- Coal line at 26t/axle Rail further ahead. A projected 287 locomotives are planned for Worcester Port Alfred - 50kV AC (861km) Ngqura be closely monitored. Transnet FreightCape Town Rail’s (Freight Rail’s) rail network is the provides the network for long-distance- 25 kV AC (2 passenger 309km) rail delivery in the 2017 financial year as part of the 1 064 Port Elizabeth Knysna - 3kV DC (4 935km) largest in Africa and the Middle East. FreightMosselbaai Rail is also services, as well as haulage capacity for other private locomotive renewal programme for the general freight - Diesel (11 974km) Freight Rail will continue to engage stakeholders and the largest of the Transnet Operating Divisions. The passenger services. • Axle loading conduct research to refine strategic positions on rail business. The revitalisation of the general freight - Main lines at 20t/axle system aims to create capacity for growth of general - Ore line at 30t/axle policy and economic regulation. Core network Closed lines Lifted lines Branch lines freight tonnages and encompasses the manufacture of locomotives, network upgrades, wagon builds, technology PERFORMANCE CONTEXT improvements and asset maintenance. Figure 1: Freight Rail network The strategic advantage of rail lies in the movement Musina Freight Rail remains steadfast in its goal of becoming of heavy haul, bulk and unitised commodities over long a ‘Top 5’ rail operator globally. The migration of the rail Louis Trichardt distances where flow densities provide economies of Groenbult MOZAMBIQUE business to an integrated logistics solutions provider BOTSWANA Lephalale scale, thereby lowering unit costs. Transporting rail- Polokwane is key to achieving this goal. Phalaborwa friendly freight on rail rather than road reduces logistics Vaalwater Zebediela Steelpoort costs, and impacts positively on the road network, Middelwit The division will continue to develop skills to ensure Modimolle Marble Hall whilst reducing transport sector carbon emissions for the future availability of the appropriate balance of Nelspruit Komatipoort the country. Witbank competencies to promote volume growth. Going forward, NAMIBIA Mafikeng Kaapmuiden operational excellence and carefully managed labour Transnet’s focus in the rail sector has been on achieving Vermaas SWAZILAND costs will be essential characteristics of our business. Ermelo increases in rail market share by stabilising and optimising Ottosdal Vereeniging Vryburg Hotazel Klerksdorp existing flows, and targeting the migration of rail-friendly Pudimoe Makwassie Vrede commodities from road to rail: that is, increasing freight Kroonstad OPERATIONAL PERFORMANCE Nakop Vryheid Sishen Warden volumes in line with capacity created through the Upington Veertien Strome Virginia Harrismith Core initiatives for 2016 Bethlehem Company’s Market Demand Strategy (MDS). Kimberley Ladysmith Kakamas Douglas Bloemfontein Richards Bay Investigate and realise diversified revenue opportunities. Koffiefontein The division continues to implement six core strategies Belmont LESOTHO Continue to implement the ‘Road to Rail’ programme, Pietermaritzburg to ensure delivery of the MDS: supported by concentrated marketing efforts, Franklin Durban Springfontein Driving operational efficiency and excellence; a qualitative range of value-added services and De Aar Harding Sakrivier Aliwal North Port Shepstone Ensuring capital investment to create and a proficient sales force. Maclear Noupoort Calvinia maintain capacity; Explore opportunities to create additional revenue Rosmead Rail Infrastructure Hutchinson Umtata Hofmeyer from diversified portfolios, such as property. Queenstown • 30 400 km of track Developing market segment competitiveness; • 20 953 route km Building operational readiness, with an emphasis Pilot bimodal technologies to create seamless Beaufort West • Core network: Porterville 12 801 route km on safet; interfaces and to optimise the value chain. Klipplaat Cookhouse Saldanha Blaney East London • Network electrification Prince Alfred Hamlet Alicedale Developing people through skills training and by Grow cross-border volumes and develop Freight Oudtshoorn - Coal line at 26t/axle Worcester Port Alfred - 50kV AC (861km) promoting an organisational culture in which a Rail’s Africa business, together with related Ngqura Cape Town - 25 kV AC (2 309km) Port Elizabeth Knysna - 3kV DC (4 935km) commitment to excellence and innovation is rewarded; consulting services. Mosselbaai - Diesel (11 974km) and Promote operational readiness for the new loco • Axle loading - Main lines at 20t/axle Regional integration and the harnessing of cross- deployment programme and refine the required Core network Closed lines Lifted lines Branch lines - Ore line at 30t/axle border opportunities. operating models. 1 TRANSNET INTEGRATED REPORT 2016 TRANSNET INTEGRATED REPORT 2016 2 Freight Rail Optimise high yield flows through the Transnet Value including ‘Lead to Cash’ with an ITP interface, EDI, and 2015 2016 2016 2017 Chain Coordinator (TVCC) across the Transnet Group track and trace. Key performance area and indicator Unit of measure Actual Target Actual Target and introduce the ‘channel management’ approach to Roll out the capital investment programme to optimise optimise identified flows. volumes. Density Roll out the ‘Productivity 2020’ initiative and Ensure strategic capital investment to optimise Northcor Tonkm/Routekm 1,56 2,00 1,3 1,3 organisational redesign to support a more agile volumes; and revise the capital pipeline in anticipation Capecor Tonkm/Routekm 4,13 4,60 3,7 3,2 response to business needs. of market recovery. Southcor Tonkm/Routekm 3,59 2,90 3,5 2,7 Address bottlenecks within the infrastructure network Roll out the ‘Roadmap to Safety’ programme in the rail Natalcor Tonkm/Routekm 6,48 8,70 6,2 6,8 through the capacity deployment model. network and operations environments. RBaycor Tonkm/Routekm 41,13 44,00 40,2 42,1 Roll out the ‘ICTM roadmap’, to incorporate key NWestcor Tonkm/Routekm 4,50 5,70 4,3 3,8 elements of a comprehensive value proposition, Eastcor Tonkm/Routekm 3,22 4,10 2,8 3,2