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How to cite this thesis

Surname, Initial(s). (2012). Title of the thesis or dissertation (Doctoral Thesis / Master’s Dissertation). Johannesburg: University of Johannesburg. Available from: http://hdl.handle.net/102000/0002 (Accessed: 22 August 2017).

The role of transport in logistics and freight movement of liquid fuels in Gauteng province

Marubini Martin Siluthanyi

A Dissertation Presented for the degree of Masters of Technology in Operations Management

Faculty for Engineering and Building Environment

University of Johannesburg

Supervisor: Professor Charles Mbohwa Date: 03 October 2017

In presenting this report in fulfilment of the requirements for a degree of Masters of technology in Operations Management at the University of Johannesburg, I agree that permission for extensive copying of this report for scholarly purposes may be granted by the head of my department or by his or her representatives. It is understood that copying or publication of this report for financial gain shall not be allowed without my written permission. Department of Quality and Operations Management The University of Johannesburg DFC Campus PO Box 524 Auckland Park 2006 Johannesburg South Africa Contact details as on title page can be repeated Date: Signature:

Abstract

The objective of this research was to investigate the role of transport in the logistics of liquid fuels in Gauteng province. The study provides a brief outline of the history of Gauteng and a short summary of its transport background. The study then examines the meaning of logistics and the product flow from manufacturer to end user. After discussing freight in general, the study then focuses on a sub-set of freight: liquid fuels in particular. Liquid fuels include all fuels transported via pipeline except gas. All role players were summarised and recommendations outlined. An investigation into academic literature summarised both published and unpublished documents. It reviews recent research into freight movement and logistics in general as well as the logistics and transport of liquid fuels.

The research methodology used was a mixture of both qualitative and quantitative methodologies. There is a detailed examination of the entire field of liquid fuels distribution processes, how distribution centres operate and the capabilities of each. In particular, we discuss how liquid fuel distribution takes place in the Gauteng cities. The research findings form part of the information gathered using research questionnaires. The information gathered is analysed and the commented on at length. In summary, the entire research aimed to discover the role players in the movement of liquid fuel within Gauteng province, and the current operations and proposed optimised future routes.

Acknowledgements

Special thanks to below participants Arthur Lees-Rolfe- [email protected] Swanie Swanepoel Transnet Pipelines DBN-Transnet Douglas Mthimkhulu Transnet Pipelines-Transnet Nomusa Madi Transnet Pipelines DBN-Tarleton depot Nompula Lekoane Transnet Pipelines DBN-Langlaagte depot Daniel Noni [email protected] Field operations manager Kagisano Mokwena-City of [email protected] Unitrans fuel and chemicals Barloworld Chemicals Grindrod chemicals Fuel logic Imperial Logistics/Tanker service Gauteng department of community safety Gauteng department of infrastructure Tshifhiwa Nkhumeleni-Ekurhuleni municipality, GSI, town and regional planner Nicolas Munyai- Senior Project manager-Armscor Engen Petroleum limited-Llewellyn Snyman-Llewllyn.snymanQengenoil.com BP-Langlaagte and Waltloo Shell-Alrode depot Sasol-Waltloo and Alrode depot Caltex- Alrode depot Total-Alrode depot SANRAIL JRA NBCRFIL Gauteng BRT bus driver Logistics/Transport third and fourth part truck drivers and crews Sasol pipeline patrollers

Table of Contents

Abstract ...... 3

Acknowledgements ...... 4

Table of Figures ...... 11

List of Tables ...... 12

List of Abbreviations...... 13

Chapter 1: Introduction...... 15

1.1 Background information ...... 15

1.2 Rationale for study ...... 17

1.3 Gauteng case study ...... 18 1.3.1 The South African Pipeline Transport overview ...... 21 1.3.1.1 Pipeline Transport ...... 22

1.4 Problem statement ...... 24

1.5 Objectives of the study ...... 26 1.5.1 Specific objectives ...... 26

1.6 RESEARCH STRATEGY AND SCOPE OF THE STUDY ...... 26 1.6.1 Proposed research approach strategy and schedule ...... 26 1.6.2 Research methodology ...... 27

1.7 Research objectives ...... 27

1.7 Research...... 29

1.8 Importance of the study ...... 30

1.9 Limitations and assumptions of the study...... 30

1.10 Research budget ...... 30

1.11 Layout of dissertation...... 31

Chapter 4: Case study ...... 32

Chapter 2: Literature Review ...... 33

2.1 Introduction ...... 33

2.2 Urban Goods Movement ...... 36

2.3 Urban liquid fuels freight actors ...... 39 2.3.1 Delivery times ...... 44 2.3.2 Transport Costs ...... 45

2.4 Choice of freight modal ...... 45

2.4.1 Characteristics of three modes of transport ...... 47 2.4.1.1 Railway ...... 47 2.4.1.2 Road freight transport ...... 47 2.4.1.3 Pipelines ...... 47

2.5 Components of logistics in fuels distribution ...... 48 2.5.1 Reliability ...... 52 2.5.2 Environment- ...... 52

2.6 Drawbacks with urban freight ...... 53 2.6.1 Technology acceptance ...... 53 2.6.2 Support for adoption ...... 53

2.7 Factors determining the choice of freight ...... 54

2.8 Logistics management ...... 56

2.9 The broad meaning of logistics management ...... 57 2.9.1 Supply-chain management...... 57 2.9.2 Logistics ...... 58 2.9.3 Logistics and distribution in Gauteng ...... 58

2.10 Logistics in the Gauteng Liquid fuel industry ...... 60

2.11 Logistics service providers ...... 60

2.12 Third party logistics ...... 61

2.13 Summary ...... 61

Chapter 3: Research Methodology ...... 65

3.1 Introduction ...... 65

3.2 CASE STUDY RESEARCH DESIGN ...... 65

3.2.1 Research approach and methodology ...... 65

3.2.2 Qualitative approach – freight reviews by interview ...... 66

3.2.3 Quantitative method – freight review by questionnaire ...... 67

3.2.4 Research targeted participants ...... 68

3.2.5 Privacy and confidentiality ...... 69

3.2.6 Length and content of research questions ...... 69

3.2.7 Types of questions ...... 69

3.3 Conclusion ...... 70

Chapter 4: Case study ...... 71

4.1 Introduction ...... 71

4.2 Limited traffic zones ...... 71 4.2.1 Time-frame regulations ...... 72 4.2.2 Types of transport ...... 73 4.2.3 Regulations and legislation ...... 76 4.3 Logistics services providers ...... 78 4.4 Distribution of liquid fuels ...... 78 4.4.1 SADOT and SANRAL involvement...... 79 4.4.2 Poor planning ...... 80

4.3 Storage facility network system (Alrode, Langlaagte, Tarlton and Waltloo) ...... 82

4.3.1 Inbound Systems (products into storage facility) ...... 82

4.3.2 The storage system (inventory management) ...... 82

4.3.3 The dispatch system (dispatching product out of the storage facility) ...... 83 4.3.4 Allocation of unplanned fuel capacity ...... 84 4.3.4.1 The first come, first served principle is always practiced at each liquid fuels facility ...... 84 4.3.4.2 Use the product or lose it principle is always applied ...... 84

4.4 Compliance with applicable laws and regulations ...... 84

4 .5 Application and planning period ...... 85

4.6 Custody of liquid fuels products in storage ...... 85

4.7 Tariff charged at the liquid fuels storage facility ...... 86

4.8 Technical requirements for liquid fuels storage facility accessibility ...... 86

4.9 Assessment process ...... 86

4.10 Vehicle vetting process ...... 87

Chapter 5: Research results and discussion ...... 90

5.1 INTRODUCTION ...... 90

5.1.1 Basic Information ...... 90

5.1.2 Demographic Data ...... 90

5.2 Demographic data of research respondents...... 91 5.2.1 Age ...... 91 5.2.2 Gender ...... 92 5.2.3 Highest level of academic qualifications ...... 92 5.2.4 Level of employment ...... 93

5.3 SECTION B: LIQUID FUELS DISTRIBUTION PROCESS ...... 94 5.3.1 Iintensity of competition...... 95 5.3.2 Competition amongst liquid fuels distributors ...... 96 5.3.3 Strength of organizations (OHSA) ...... 96 5.3.4 Liquid fuels output will likely to be supported by organisations? ...... 97 5.3.5 The most common liquid fuels distribution skills ...... 98

5.4 COLLECTION AND GATHERING ...... 98

5.5 ANALYSIS ...... 99

5.5. ANALYTICAL TECHNIQUES ...... 99

5.6 DISSEMINATION ...... 100 5.6.1 Methods used to present competitors funding ...... 100

5.7 SECTION C ...... 101

5.8 CONCLUSION ...... 102

CHAPTER 6: RECOMMENDATIONS AND CONCLUSIONS ...... 107 6.1.1 Research findings discussion ...... 107 6.1.1.1 Regulation for increased ROI ...... 107

6.2 Construction of pipelines to Gauteng’s fuel stations ...... 108 6.2.1 Guidelines for pipeline transport ...... 109 6.2.2 Technological migration of the urban freight pipeline system ...... 109

6.3 Comprehensive regulation of road transport ...... 111 6.3.1 Safety and security...... 112 6.3.2 Political will at Gauteng’s Department of Roads and Public Transport ...... 113 6.3.2.1 The role of law enforcement ...... 115

6.4 Rail transport ...... 117

6.5 Internal vetting by transport companies ...... 118

6.6 Department of Infrastructure Gauteng Province...... 118

6.7 Prioritization of dangerous goods vehicles ...... 119

6.8 Liquids fuels freight ...... 119

6.9 Competence in transport SOEs ...... 121

6.11 Future recommendations ...... 122

6.12 Recommendations for future work ...... 125

REFERENCES ...... 128

APPENDIX ...... 138

Table of Figures

Figure 1.2 Source: the pipeline network – 2010 Mpumalanga province freight data bank, 2007 ...... 22 Figure 1.3 Transnet Limited Organogram Source: Transnet (2010) ...... 24 Figure 2.1: functional relations and commercial schemes Source: (Russo and Comi, 2006) 37 Figure 2.2: Third-party reverse logistics ...... 46 Figure 2.3: Overview of Logistics System ...... 50 Figure 2.3: overview of logistics systems ...... 52 Figure 4.1 Growth of traffic flows ...... 74 Figure 4.2 Type of truck ...... 75 Figure 4.3 Type of truck ...... 75 Figure 4.4 Pipeline ...... 76 Figure 4.5 Road damage ...... 77 Figure 4.6: examples of Hazchem packages ...... 79 Figure 4.7: The liquid fuel tank capacity for different kind of product ...... 82 Figure 4.8: loading bays equipped with loading arms ...... 83 Figure 5.1 Ages ...... 91 Figure 5.2 Gender ...... 92 Figure 5.3 levels of academic qualifications...... 93 Figure 5.4 level of employment in the industry ...... 94 Figure 5.5 Effect to organisation ...... 95 Figure 5.6 Intensity of competition ...... 96 Figure 5.7 Competition amongst liquid fuels distributors ...... 96 Figure 5.8 Strength of organizations ...... 97 Figure 5.9 Support by organizations ...... 97 Figure 5.10 Skills ...... 98 Figure 5.11 Collection and gathering...... 99 Figure 5.12 Analytical techniques ...... 100 Figure 5.13 Competitors funding presentations ...... 101 Figure 5.14 Accessibility ...... 102

List of Tables

Table 1.1 Proposed research schedule ...... 29 Table 4.1 Vehicle vetting checklist adapted from source (Sasol: 2015) ...... 87

List of Abbreviations

CO2 –Carbon Dioxide COSATU –Congress of South African Trade Union DC- Distribution Centre DoT- Department of Transport GDP- Gross Domestic Product GJ- Gigajoules GPS- Global Positioning System HGV- Heavy Goods Vehicle HOD- Head of Department JRA- Johannesburg Road Agency LTL- less-than –truckload LTZ- Limited Traffic Zone MMC- Member of the Mayoral Committee NLTA- National Land Transport Act NATREF-Durban to Inland Refinery NBCRFLI- National Bargaining Council of Road Freight Industry Limited NERSA- National Energy Regulatory of South Africa NFSF- National Freight Strategy Framework NLTTA, 2000-National Land Transport Transits Act no.22, 2000 NRTA, 1996 – National Road traffic Act, 1996 PPE – Personal Protective Equipment PrDPDG – Professional Driver’s License Permit SADOT – South African Department of transport SANRAL – South African National Road Agency Limited SATAWU – South African Transport Statcon – Department that assist with research at the University of Johannesburg TAWUSA – Transport Aligned Workers Union of South Africa TL- truckload UDC – Urban Distribution Centre UNISA- University of South Africa

VM cost- Vehicle Movement Cost BP- Beyond Petroleum SLP – Safe Loading Pass SQAS – Safety and Quality Assessment System COF – Certificate of Fitness of Transport Vehicle RAU – Rand Afrikaans University SARS – South African Revenue Services DOEM – Department of Energy and Minerals DTI – Department of Trade and Industry SHEQ – Safety Heath Environmental Quality UCC – Urban Consolidation Centres GPRT 10: 1997- Gauteng Provincial Road Traffic Act, 10 of 1997 DCS – Gauteng Department of Community Safety DEPARTMENT – Department of Road and Transport Gauteng Province MMC – Member of the Mayoral Committee NRTR – Road Traffic Management Corporation BESTUFS – The Best Urban Freight Solution MEC – Member of the Executive Council ITS – Intelligent Transport System NATIS – National Traffic Information System SLP – Safe Loading Pass

Chapter 1: Introduction

1.1 Background information

Generally, a freight transport system, including road, rail, air, water, and pipeline transport, allows customers and consumers to benefit from the prompt availability and immediate accessibility of products manufactured elsewhere. This is a result of various factors, including, amongst others, (1) area; (2) climate; (3) soil conditions (i.e. sandy, loam, or clay soil); (4) the lack of raw equipment utilities, experience, labour/ skills, or (5) the expense of manufacturing of a system that allows customers the option of products not otherwise available on the local market (Dablanc, 1999). A good transportation network - or good transport modalism - enables the mobility of people for economic, educational and social activities, whilst minimizing or decreasing isolation. It may promote economic development and economic and political stability in a developing country (Dablanc, 1999). However, transport can be a substantial expense for most firms, including huge cooperate entities. Dependent upon the industry, this can account for up to two thirds of total costs (Ballou, 1999: 135). Hence, transportation plays a significant role in supporting a wide range of economic activities. Urban liquid fuels freight transportation can be described as” the planning of the displacements of equipment’s and goods inside urban areas” (Dablanc, 1999). The process involves the movement of loads from their point of origin – which may be remote - to their destination, as well as inter-city movements inside or between metropolitan areas''. Many deliveries only move across urbanized areas. Freight transportation is crucial in these urban areas where production, manufacturing, distribution and consumption activities take place within a limited space. According to Russo and Comi (2010), urban freight transport is highly heterogeneous and complex in view of the presence of different users and vehicle operations. This complexity and heterogeneity is partly a result of, the multiplicity of participants including agents and stakeholders that are involved in freight transport within urban areas.

Urban freight transport and freight distribution is that which takes place within an urban setting. The transport mode and freight movement can be perceived differently. For instance, people generally view trucks as a “nuisance” on the road. Urban residents (especially in suburbs - particularly affluent suburbs) generally do not like the trucks to operate close to their homes or neighbourhood due to noise, air pollution and other damage done to the environment (Russo

and Comi, 2010). Some urban residents - such as retailers/ shop owners - are ambivalent. On the one hand they need the merchandise that the trucks bring On the other hand, they lament that the delivery vehicle - in the process of loading and unloading of products - takes space that could be utilised for parking for potential consumers. Transport companies and delivery drivers responsible for the delivery of goods may complain about the shortage of parking space for loading and unloading operations and about the traffic congestion during peak hour. This increases the entire expense of freight services and causes delays in meeting delivery deadlines and turnaround time of the vehicle. Within South Africa, 75% of freight is moved by road rather than rail (Mpumalanga Province Freight Data Bank, 2007). However, the transport system is still largely inefficient and disorderly. A reliable and low cost freight movement system is required to bring competition to the sub-sector and to drive the local economy (Russo and Comi, 2010). This study undertakes such an investigation with a specific focus on liquid fuels distribution within Gauteng province. The distribution of such liquid fuels in Gauteng province plays a significant role for the inhabitants. This ranges from job creation to a better life for the populations in general. Liquid fuels distribution companies like Engen, Shell and BP each employ between 501-1000 specialist workers around the province (NBCRFI). It is not only the affluent who are affected by the delivery of liquid fuels. Many disadvantaged inhabitants around Gauteng province, especially in the informal settlements, rely on paraffin for energy production such as lighting and cooking. Shell’s distribution centre - called “Auto Commodities” in the West Rand (at Laipasvlei) - plays a major role in paraffin distribution to informal settlements around the Gauteng province. Haider (2007: I) states that "supply chain management is the planning, guiding and controlling" of the network of manufactures, freight distributors, shops and stores and the turning of raw material into finished goods and services and finally delivered to consumers". According to Cooper (2007), about two hundred road freight tankers per day deliver liquid fuels freight (primarily diesel and petrol) into Gauteng. This distribution is by means of road, rail and pipeline transport. Transnet reported that general freight traffic moved by Spoornet increased marginally to 182, 1 million tons for the year ending 2006 (Transnet, 2006). The report further highlights that more than half of the bulk transported in to Gauteng province is liquid fuels freight.

1.2 Rationale for study

The distribution of freight within Gauteng is vital and important since cities like Johannesburg and Pretoria are centres of economic growth and development. However, freight movement within urban areas - especially within city centres – always creates important challenges to the urban transport infrastructure. There is a high social cost resulting from accident and environmental impacts. The high population density contributes to a rise in congestion levels in urban areas within Gauteng province's three metropolitan areas (Ekurhuleni, Jonesburg and Tshwane). This is a result of increased urbanisation, population and car usage (Kompass, 2012). The three Gauteng major metropolitan cities are today facing global and internal competition to improve their return on investment. Providing trade with an efficient freight transport system is becoming important to sustain economic prosperity and stability within the province. For example in Gauteng shopping centres and malls are built on almost each street corner, which in turn increases urban freight movement (Brewer, 2005). Freight transportation movement within Gauteng has different characteristics when considering inter-city movement as opposed to third party transport, or logistics companies responsible for freight delivery. Taniguchi (2004) identifies some of the main attributes of urban freight movements, which have a clear similarity to freight movement within Gauteng province as follows:  Frequent deliveries of smaller activities – as an example, Gauteng cities experience massive traffic congestion due to a high number of deliveries during peak- hours. These include posted mail and small parcels like cell phones and other small accessories.  Low utilisation of capacity trucks – huge truck and vehicles are used to deliver small goods. As an illustration, consider 8-ton truck (from Joshua Doore's warehouse in Vanderbiljpark, outside Johannesburg) delivering a relatively small refrigerator at Morkels (a retail shop) within the Johannesburg city centre whereas, a small vehicle could have been used for this delivery.  Time windows – municipality by-laws require that Gauteng cities restrict deliveries within a specified period, especially those for dangerous goods and abnormal loads. Most of such products are delivered during the off-peak period (16h00 and 18h00).  On-street parking – this is restricted by municipality by-laws; Gauteng cities have restricted parking spaces. Some areas enforce no parking between 16h 00 and 18h 00. The current growth in urban freight has resulted in increased specialisation, which then permits division in manufacturing and associated freight volume (Rodrigue and Dablanc, 1998). It is

typical of a developing nation that production or manufacture and consumption of products take place in close proximity. Much of the labour force is involved in agricultural production, and a low proportion of the total population stays in urban areas. This is not the case in Gauteng since the province constitutes one huge city with 97% of its population staying in urban centre’s (Stats SA, 2010). With the availability of a less costly and readily available transport service, the complete economic structure mirrors that found in developed nations (Rodrigue and Dablanc, 1998). Large cities within Gauteng province - such as Johannesburg and Pretoria - result from the migration of the rural population to urban centres. Densely populated geographical areas minimise production to a narrow scale of products, and the economic living standard for the average population usually increases but becomes uncontrollable. This more especially applies to an efficient and inexpensive modern transportation system that contributes to greater competition in the market place, greater economies of scale in manufacturing and reduced pricing of goods (Mentzer, 2001: 135).

This study provides a detailed investigation into the movement of liquid fuels freight in Gauteng. It examines the actors, the agents and the stakeholders involved in policy and strategy development at national, provincial, and local government level. Questionnaires on the subject were designed and sent to randomly selected senior employees in the provincial Department of Transport, Department of Mineral and Energy, the national energy regulators (NERSA), Petro SA as well as other senior employees in the mayoral councils of all the municipalities in Gauteng province. Personal interviews were conducted with managers and senior managers of companies in the logistics and freight movement of fuels industry. These entities include Transnet rail freight, Green Rod Logistics, Imperial Logistics, Tanker Service, Reef Tanker Logistics, Unitrans Freight and Logistics and Fuel and Chemical Logistics, Barloworld Logistics, BP, Chevron, Caltex, Engen, Total, Shell and Sasol.

1.3 Gauteng case study

Gauteng is classified as the smallest of the nine South African provinces in terms of land area. According to Statistics SA (2012), Gauteng province has only occupied 1,4% of South Africa’s land area and is currently contributing more than thirty three per cent of Gross Domestic Product (GDP); this is also reported to be equivalent to 10% to the gross domestic product of the entire African continent (Stats SA, 2012). Gauteng used to have 40% of the world's gold

reserves, now economic development has diversified and grown rapidly. It includes more sophisticated sectors such as finance and manufacturing. Gold mining is no longer the major economic mainstay.

Figure1.1 Map of Gauteng Province Source (SA Places, 2012) Johannesburg is the economic hub of Gauteng province and by far the hugest city in South Africa. It has the highest population of both South Africans and foreigners and consists of about four million people out of a total South African population of 51,8 million (StatsSA, 2012). It is also the largest city on whole of the African continent (BDlive, 2012. Johannesburg is often compared to Los Angeles in the USA, with its similarity based on urban sprawl road network linked by big highway interchanges, and a pressurised lifestyle with a relatively high level of crime. Johannesburg is a stand-alone metro municipality, one of Gauteng's three major metros.

To the north is the city of Tshwane, which is the administrative capital of South Africa and whose southern suburban area is slowly merging with the Johannesburg sprawl. The city of Tshwane is dominated by government services and the foreign diplomatic corps. The industrial and coal-mining towns of Vereeniging and Vanderbiljpark lie in southern Gauteng, on the Vaal River (Stats SA, 2010). With a total area of eighteen thousand one hundred and seventy eight square kilometres, Gauteng is slightly smaller than the USA state of New Jersey (Stats SA, 2012). While it is classified as SA's smallest province due to its geographic covering, it has the highest population of 12, 3 million people. This is

approximately 675 citizens per square kilometre (Stats SA, 2012). It is reported that the Northern Cape Province, by comparison, has an average of around three people per square kilometre. Gauteng province, compared with other eight provinces, has the most important modern educational and health facilities in the whole country. The city of Tshwane is home to the largest residential university in South Africa, the University of Pretoria (UP), and what is believed to be the largest distance-learning university in the world, the University of South Africa (UNISA).

South Africa does not have crude oil and the country imports sixty-four per cent of its total liquid fuels requirements (Transnet, 2010). The reminder of the demand is met through the conversion of coal to liquids fuel by Sasol and from natural gas by Petro SA (MPFDB, 2007). Liquid fuels are shipped into Gauteng province by means of pipelines that are owned and maintained by Petronet, a division of Transnet Limited. This is then later distributed within the province by means of road, rail and pipeline transport into several distribution centres (DCs) especially in the east of Johannesburg. Recently, road transport has been mainly used to distribute fuel liquids within the province (Mpumalanga Province Freight Data Bank, 2007). It remains the responsibility of a transport coordinator, manager, or supervisor to take a decision on which modal choice to use, based on factors such as reliability, time, accessibility, safety and security and efficiency. Therefore, this process is viewed as an attempt to select the type of transport and shipment size that - for a particular origin to destination movement - will minimize the total logistics' fixed and variable costs of the goods being shipped to the end-user (U.S. DoT, 2004).

In terms of liquid fuels supply, Gauteng province receives, liquid fuels from the Sasol plants in Sasolburg (Free State) and from other plants in KwaZulu Natal. The former is the transformation of oil-from-coal facility, whilst the latter is a crude refinery obtaining feedstock imported by ship. Liquid fuel products are pipelined by Petronet from the coastal refinery in Durban, to supplement product shortages in the Gauteng province market. Fuels and other vehicle lubricants are moved from Durban to Gauteng - mostly by pipeline, rail and road transport - to several liquid fuel distribution centres throughout Gauteng province, where at a later stage, the product is distributed within Gauteng and to other provinces. Companies like BP, Engen, Sasol, Total and Caltex have huge fuel distribution canters situated in the east of Johannesburg and Sasol. Similarly, Shell operates from the west of Johannesburg (Tarlton and

Laipasvlei depots). The main purpose of the liquid fuel distribution centres is to provide easier accessibility of liquid fuels freight within the province. Distribution centres are mostly in proximity to major accessible transport routes near cities or towns and to terminals, since they can also perform manufacturing activities such as assembly and labelling (Rodrigue and HESSE, 1998).

1.3.1 The South African Pipeline Transport overview

Historically the infrastructure of pipeline transport began in the nineteen sixties when it was determined that the railway lines network from Durban and Mozambique were deemed insufficient to meet inland markets in Gauteng province. A twelve-inch pipeline network was constructed from Durban to Gauteng. According to MPFDB, 2007, the historic development of pipeline transport is as follows:  In the nineteen sixties, a twelve-inch pipeline for refined petroleum products was constructed.  In 1969, an eighteen-inch crude oil pipeline was built for transportation of oil from Durban to the NATREF inland refinery at Coal Brook in the Free State.  In 1973, construction of a sixteen-inch pipeline for refined products took place. This route was under-utilized because of the synthetic liquid fuels line (coal to oil) construction in Mpumalanga, Secunda.  In 1995, the petroleum pipeline transport route was reconfigured to transport methane rich gas between Secunda to Durban via Empangeni. Transnet is responsible for 3 300 km of pipeline transport routes within South Africa, and 590 km is currently owned by Caltex petroleum and moves crude oil to their refinery Calref. Out of approximately 21 billion litres of liquid fuels conveyed annually, pipeline transport moves 16 to 17 billion litres per annum, while Caltex moves 5 billion litres per annum (Mpumalanga Province Freight Data Bank, 2007). The pipeline transport network system connects the following SA provinces: KwaZulu Natal, Free State, Gauteng, North West and Mpumalanga. Intake stations are located in Durban (at the refineries) with the crude at Coal BROOK (NATREF – Natal refinery) and the Sasol two and three synfuel plants located at Secunda. The network also comprises of a tank farm at Tarlton in the west rand with capacity of thirty million

litters of liquid fuels. This facility is used for storage and distribution of liquid fuels into Botswana, Zimbabwe and Lesotho (Transnet, 2009)

Figure 1.2 Source: the pipeline network – 2010 Mpumalanga province freight data bank, 2007

1.3.1.1 Pipeline Transport

Several transport and logistics research authors have described the pipeline mode of transport as the transportation of liquid or gas products through pipeline networks. Liquid products transported in this mode include liquefied commodities such as crude oil, petrol, jet fuels, gases and methane-rich gas. Transnet Pipelines Transport is a subsidiary of Transnet which has as its primarily aim is to operate, store, monitor and manage almost all liquid or gas freight pipelines in South Africa; with the exception of a pipeline owned and operated for crude oil by Caltex in the Western Cape province from Saldanha to Millerton (Mpumalanga Province Freight Data Bank, 2007). Until the end of year 2005, pipeline transport was regulated by the Department of Minerals and Energy while the Department of Transport regulated policy. These two are today operated separated and each department operates as a separate entity, and the National Energy Regulator (NERSA) is the current regulator. The following Acts - which are South African governing acts - relate to construction, operation and maintenance of petroleum and gas pipelines:

 National Key Points Act (Act 102 of 1980)  Gas Act, 2001 (Act No.48 of 2001)  Petroleum Pipeline Act, 2003 (Act No. 60of 2003)  Petroleum Products Amendment Act (Act 58 of 2003)  National Regulator Act, 2004 (Act No. 40 of 2004)

Figure 1.3 Transnet Limited Organogram Source: Transnet (2010)

It has been reported that Transnet pipeline network in past years has faced some challenges resulting from NERSAs tariffs methodology that influences the ability of pipelines to service its debt and earn a return appropriate to the risk associated with the business. This in turn means the pipeline transport network will have to apply for licenses to constructed and operate additional liquid fuels facilities such as pipeline and storage facilities in competition with any other interested parties (Transnet, 2011).

1.4 Problem statement

Transport generally plays a huge and pivotal role in the logistics and freight movement of liquid fuels within urban areas in any country. Transport and logistics in this case are terms that cover the shipment, movement and storage of liquid fuels from one area of specialisation to another in order to respond to demand. In South African, the street freight industry framework is plagued with numerous difficulties and wasteful aspects at framework level. There are enormous freight transport foundation deficiency inefficiencies; the institutional bodies (run by the DoT and its agencies) of the freight industries are improper and ignored by the national department of transport, and there is a notable absence of coordinated freight transport

arrangements. There is a gigantic absence of freight industry data and asymmetries flourish; the ability base is inadequate and the administrative structures are ill unequipped for settling issues in the freight industries due to confidential arrangements - because of political deployment - that is breaking down freight foundation development and integrated transport planning (SADOT, 1999a). The present absence of all-encompassing freight arrangements, especially in advanced planning by urban metropolitan cities such as Johannesburg and Ekurhuleni that result in offices being produced in such a way that they add to clutter and expense, including the costs incurred by workers heading out to and from these offices. In many cases, due to a variety of factors, liquid fuels have not been received on time in Gauteng province.

As an illustration, a recent truck drivers' strike on 19 September 2011 (under the auspices of the road Freight Bargaining Council) illustrates the value of logistics and freight movement in the distribution of liquid fuels. During the national freight strike the value of the Rand (relative to other major currencies) weakened due to speculation around fuel shortages in Gauteng. This also resulted in perishable products rotting and innocent widespread disruption. It became difficult for poorer citizens to move around or leave the province. During that period liquid fuels distribution in Gauteng was uncertain, as some depots had to supply areas they had not supplied previously. The companies that went on strike included BP Plc., Royal Dutch Shell; Petrochemicals group Sasol, the state owned energy group Petro SA, Chevron, Total and Engen (NBCRFLI SA, 2011). A consequence of the rising cost of energy, which was exacerbated by the transport cost of energy (including coal and petroleum), was that many households - especially from the poorer backgrounds - turned to liquid fuels, especially paraffin for lighting, heating and cooking. According to Stats SA (2012), 83.9% of households receive electricity and water, leaving 16.1% depending on liquids fuels to meet basic survival needs. Hence, the distribution of liquid fuels in Gauteng province plays a significant role in the everyday life of the inhabitants. This ranges from job creation to a better life for the surrounding population.

There has been a significant switch of models in liquid fuels' distribution within the province. The amount of liquid fuels that a truck can transport is determined by its size and the weight of the product. The laws and regulations are complicated, covering items such as permissible axle loading and spacing as regulated by South Africa National Road Traffic ACT 1996. Rail Freight in Gauteng province is not as easily accessible to other parts of the province due to constraints and allocations. Since part of the province has no access to rail or rail freight, road

remains the most common means of transporting liquid fuels (Transnet- Rail Freight 2009). This study investigates the role of transport in logistics and freight movement of liquid fuels in Gauteng province, whilst at the same time identifying potential areas that will reduce the negative effects of freight movement of liquid fuels. In doing so, the study aims to understand how freight transport operations are carried out within Gauteng province and how the system can be handled efficiently with a specific focus on liquid fuels.

1.5 Objectives of the study

The overall research objective was to investigate the extent to which transport contributes to the logistics and freight movement in Gauteng and the roles of various stakeholders with the aim of improving efficiency in the movement of liquid fuels.

1.5.1 Specific objectives

 To review the current condition of freight and logistics of liquid fuels and the importance of transport in Gauteng province.  To investigate the agents involved in logistics and freight movement of liquid fuels in a selected case study.  To evaluate how the agents interact throughout the process of freight movement of liquid fuels in a selected case study.  To develop a framework for improving efficiency of the logistics and freight movement of liquid fuels for the selected case study in Gauteng.

1.6 RESEARCH STRATEGY AND SCOPE OF THE STUDY

1.6.1 Proposed research approach strategy and schedule

In this case, study a mix of research designs was proposed and they include literature reviews from both published and unpublished journals, books and articles that were obtained from the university library and from databases on the website; interviews of several stakeholders involved in the liquid fuels and logistics.

1.6.2 Research methodology

The approach and data needed for each of this study’s objectives is detailed below.

1.7 Research objectives

Objective 1: Review the current state of freights and logistics of liquid fuels and the importance of transport in Gauteng province.

This at first included a comprehensive investigation to assist in comprehending the subject in detail. It was then followed by interviews with a wide variety of participants (including freight stakeholders and other actors), investigating various perspectives of the urban freight transport issue at different levels and capacities. The meeting was semi-organised and included inquiries regarding region profile, truck drivers and their assistants, issues, plans and approaches and Gauteng's liquid fuels organization dissemination profile. The meetings - together with a written survey - introduced a subjective perspective to the urban freight transport issues and potential outcomes.

Objective 2: investigate the agents involved in the logistics and freights movement of liquid fuels in a select case study

In order to achieve these objectives, interviews were carried out with senior employees in the provincial Department of Transport as well as other senior employees in mayoral council of transport in all municipalities (Ekurhuleni, Tshwane, Johannesburg and Midvaal). Furthermore personal interviews were also carried out with managers in companies that deal with liquid fuels' freight movement distribution in Gauteng province. The explanatory research provided a greater understanding of the overall concept of the role of transport in logistics and freight movement of liquid fuels within the Gauteng province. A survey questionnaire was used to conduct exploratory research. A questionnaire on the subject was designed and sent to random senior employees in the provincial Department of Transport, Department of Minerals and Energy, National Energy Regulator (NERSA), Petro SA as well as other senior employees in the mayoral council for transport in all municipalities. Personal interviews were conducted with managers, senior managers, liquid fuels truck drivers and supervisors of companies that are in

the logistics and freight movement of the liquid fuels industry. The target included Transnet rail freight, Green Rod Logistics, Imperial Logistics, Tanker Service, Reef Tankers logistics, Unitrans Freight and Logistics and Fuel and Chemical Logistics, Barloworld Logistics and others, BP, Chevron Caltex, Engen, Total, Shell and Sasol.

According to Davies (2007:28), a survey is an examination instrument comprising of a progression of inquiries including different prompts with the end goal of social event data from respondents. Surveys lessen predisposition towards bias. There are no verbal or visual pieces of information that influence - and consequently bias - the respondent. Polls are less meddlesome than phone calls or personal overviews. At the point when respondents get mail, they are allowed to finish the surveys independently. The respondent is not influenced by the research instrument (Welman, 2003: 55); it was therefore decided that quantitative research represent 10% of this study. A codebook was constructed for documenting the whole survey process, including copies of questionnaires and responses from relevant people. A pilot study was used to provide information to support the planning effort. Statcon (the university's department that assists with research) was also consulted to assist with the creation of the questionnaire. The data showing the feedback from the responses of those who completed the questionnaires and those interviewed was analysed by the senior IT manager at Armscor SA, using graph Pad software to analyse this data.

Objective 3: Evaluate how the agents interact through the process of freight movement of liquid fuels A literature study was utilised to apply theoretical knowledge to the discipline of logistics and transport or freight movement of logistics fuels in Gauteng. Different data bases (e.g. Emerald, ProQuest, Science Direct and others) websites and books from University of Johannesburg library were used to gather relevant information regarding the agents involved in the logistics and freight movement of liquid fuels. Thereafter a case study was conducted, designed to provide information as to how the various agents interact throughout the process of liquid freight movement within Gauteng. The interlinking and relationships of all agents involved was investigated in order to achieve more understanding of the interrelationship amongst the agents and their behaviours.

Objective 4: Develop a framework for improving efficiency of the logistics and freight movement of liquid fuels for the selected case study in Gauteng The objective was to utilise the information and findings from the above three objectives, therefore to develop a framework for improving the smooth operation of freight and logistics in Gauteng Province. The framework of this study was to provide potential for improving the pipeline freight transport of liquid fuels distribution in Gauteng province since it is currently a neglected mode of transport.

1.7 Research

The original proposed research activities are detailed in Table 1.1. Some of these phases were designed to run concurrently and the entire study was expected to take approximately one year (12 months).

Table 1.1 Proposed research schedule Action plan 2013 2013 2014 2014 2014 2015 2015 20 (Envisaged to complete 1st Q 1st Q 1st Q 2nd Q 2nd Q 3rd Q 4th Q 17 after 4th Months) Q

Literature review On going throughout study. Face to face sessions x with supervisor Investigative research x

Mastering chapter 2 x (research deployment) Design questionnaires x x Distribute and obtain x x results Mastering chapter 3 $ 4( x research deployment) Mastering chapter 4 &5(research x deployment)

Revision and reviewing x of dissertation Complete dissertation - x x Final

1.8 Importance of the study

Integrated freight transport planning is currently problematical within Gauteng province; therefore, an objective of this study will be to provide possible improvements in terms of the distribution of liquid fuels within Gauteng, since they are all currently neglected modes of transport. The study will also attempt to highlight the role of pipeline, road and rail freight transport and logistics in the liquid fuels distribution industry as well as future developments and improvements of these modes of transport. Transport modes that could avoid future failure of delivery due to legal NBC freight strikes, weather conditions etc. will also be highlighted in this study, since we know that the impact of the National Bargaining Council’s legal freight strike resulted in an adverse economic impact, not only in Gauteng, but also in South Africa as a whole. The study will also highlight different stakeholders as well as their roles in the industry within Gauteng province.

1.9 Limitations and assumptions of the study

This study mainly focused on three modes of transport: pipeline, road and rail transport. Although the greatest focus was on pipeline and road transport, rail transport was also viewed as a means of liquid fuel transport. The geographical focus was on Gauteng and considered the role of transport and logistics in liquid fuels' distribution, however, other provinces were used as a source of additional information). The study has only investigated certain stakeholders involved in the distribution of the liquid fuels industry and all within a restricted number of companies and government agencies.

1.10 Research budget

The budget envisaged for this project was estimated at around R60 000 excluding tuition fees. This has included travelling to target groups and libraries across the country as well as purchasing all study materials and requirements. A substantial amount of travelling to all major liquid fuels distribution Centres in the Gauteng province was conducted in order to fulfil this study requirement. O.R. Tambo Airport was also visited to gain more information regarding

the impact of fuels on the airport operations. All three major Gauteng municipalities were visited and stakeholders involved were interviewed.

1.11 Layout of dissertation

The following was the proposed structure of the study.

Chapter 1: Introduction This chapter presents information about the research problem, objective, rationale of the study scope and limitations, and layout of the whole study.

Chapter 2: Literature review of urban freight This chapter presents a review of academic works on urban freight involving Gauteng cities, urban movement, actors and stakeholder’s involved, model choice and factors determining the choice of model as well as the study case presentation of this study. This chapter also covers the literature review on the discussion on the role of transport in logistics and freight movement of the liquid fuels industry with the following specific focus:  Definition of logistics, freight movement, transportation management and other related definitions i.e. supply chain management, reverse logistics.  Characteristics of urban freight transport, including road, rail and pipeline transport.  Background information about the Gauteng liquid fuels transportation industry.  The role and function of transport in the logistics and freight movement of liquid fuels in Gauteng.  Overview of Gauteng liquid fuels pipeline transport.

Chapter3: Research methodology This chapter applied both qualitative and quantitative research methodologies, Different books, internet articles, magazines, newspapers and journal articles were used to investigate the topic. Questionnaires were designed and approved with the assistance of Dr. Burger of STATCON and were distributed to the different stakeholders involved. Personal interviews were also conducted with several stakeholders.

Chapter 4: Case study This chapter presented discussion around this study and included general freight reviews. The discussions were based on knowledge gained through this study and considered the most practical theories. This chapter outlines core aspects of urban freight distribution within Gauteng province city centres.

Chapter 5: Research findings This chapter discusses the empirical survey conducted through questionnaires, face-to-face interviews and framework that were developed. This chapter summarised the research findings, through an in-depth analysis of the participant’s response.

Chapter 6: Recommendations and conclusions This last chapter provided a summary of this study. The researcher drew conclusions, made recommendations and outlines these in this chapter. All findings of this study were analysed and published as further discussed in this section. This includes the comparison between the current situation and a potential future situation, and includes general methods of improving the current role of transport in logistics and freight movements of liquid fuels within Gauteng province. All role players where discussed in detail.

Chapter 2: Literature Review

2.1 Introduction

Freight transport within urban areas is not well understood and there is no direct methodology that is entirely appropriate for the analysis and planning of this sector (Lindholm and Behnrends, 2012). Freight movements in Gauteng's major cities are extremely complex. The movement of goods within urban areas is vital to the smooth operation of cities. However, freight movement often puts a considerable strain on the urban transport infrastructure. It can impose high social costs in terms of accidents, incidents and the environmental impact. Traffic and human congestion levels in Gauteng's urban areas are rising daily as result of increasing urbanisation and levels of private car usage. Cities such as Johannesburg and Pretoria today face similar problems to other global cities when it comes to obtaining a competitive return on investment and currently an efficient transport system is necessary to sustain economic prosperity (Brewer, 2005). Freight transport for each type of system within urban areas is dissimilar to inter-city long distance haulage. Global urban economic systems have become functionally specialized, allowing for a worldwide division of resources and improvements in the associated freight volume (Rodrigue and Dablanc, 2010). It is typical in a developing nation – such as South Africa - for production and consumption to occur in close proximity. In South Africa, in most urban areas a large proportion of the workers are engaged in agricultural production, and a low proportion of the total population used to live in urban areas. Following the introduction of cheap and accessible transportation services, the entire structure of the economy changed to incline towards that found in developed nations (Rodrigue and Dablanc, 2010).

Large cities result from the migration of the population to urban centres. The land itself typically restricts production to relatively few products, and the standard of living for the average citizen usually improves. In particular, an organised and low cost transportation system encourages greater competition, and greater economies of scale result with a concomitant decrease in the price of goods (Mentzer, 2001:135). In order to facilitate greater understanding of the role of transportation in the logistics of freight movement within Gauteng, this review provides a detailed investigation of urban freight movement. It covers the actors involved, legislation and regulations and the role of the general 33

public. In recent years, there has been a growing interest in the idea of sustainable urban development and consequently there is a focus on sustainable transport within Gauteng (Nuzzolo et al., 2011). Activities in city areas include large movements of freight, typically with delivery trucks moving among distribution centres, storage facilities and shops (i.e. the "nodes"). Higher volumes of traffic within the Gauteng city nodes strongly influence sustainable development. Traffic congestion increases vehicle emissions and degrades air quality, with concomitant excess morbidity and mortality for drivers, commuters and individuals living near major roadways. Presently, our understanding of the impact of air and noise pollution is very limited. Traffic jams as well as air and noise contamination degrades continuously (Nuzzolo et al, 2011). City traffic is responsible for 40% of CO2 emissions and 70% of other pollutions (Nuzzolo et al, 2011). The impact of Gauteng city freight on sustainable development is growing.

Although freight movement within Gauteng cities is only 10 to 18% of all road traffic, it contributes 40% of air contamination and noise pollutants (Lindholm and Behnrends, 2010). This is a problem found in all global cities despite their different locations and backgrounds (Lindholm and Behnrends, 2010). In the past, the city planner’s involvement in urban planning was restricted to calculations of potential future transport demands. This, together with assessment of the provision of services, formed the basis for conclusions pertaining to future transportation investment and infrastructure planning. Today, mathematical constructs of urban freight transport plays an additional significant role; these calculations allow us to estimate and evaluate the performance and impact of city freight. Measures can be put in place in order to make the city more sustainable (Nuzzolo et al, 2011). Movement of goods plays a connective role within the several steps that result in the conversion of resources into useful goods ultimately to the benefit of the consumer. The forethought involved in all of the facets of a system of goods movement that forms the basis of business logistics. The objective is to minimise cost and maximise service to customers. Any system that is put in place must be properly managed and controlled (Tseng et al, 2005).Historically these steps involved distinct separate entities providing production, storage and transportation, wholesaling and retail sales; however production/manufacturing plants, warehousing services and merchandising establishments all contribute to transportation. Manufacturing plants required for the assembly of materials, components and suppliers - with or without storage, processing and material handling – fall within the scope of "plant" and "plant inventory".

Most transport, for both people and goods, starts and ends in city areas and often bypasses several other city areas on the way (Lindholm and Behnrends, 2012). Activities in cities are often accompanied by large movements of goods, typically by delivery trucks. They move between industries and distribution centres, warehouses and retail activities as well as to and from major gateways such as ports, rail terminals, distribution centres and airports (Rodrigue et al, 2006). Although freight transport operations in the cities within Gauteng constitute 20- 30% of road traffic, it accounts for 16-50% of the emissions of air contaminants (depending on the pollutant considered by transport activities in the city) {Dablanc, 2007}). However relatively little attention has been paid to integrated urban freight planning by researchers and policy makers despite its economic significance and local environmental problems associated with it (Lindholm and Behnrends, 2012). Freight pipelines represent an innovative means for the movement of goods and offer an alternative to much used transport modes. There is a movement of the policy landscape towards freight pipelines. However, successful implementation requires the support of policy makers.

Some of the major benefits and issues with freight pipelines have been highlighted in this study. The researcher concluded that there are still opportunities for the use of freight pipelines, but that further research is yet required to provide a full understanding of supply chain management and the logistics of liquid fuels distribution within Gauteng province and other related activities that the introduction of this technology may affect. This results from systems that are presently in commercial operation. These have exhibited acceptable characteristics, although they have not been more widely taken up (Egbunike and Potter, 2011). It is concluded that freight transport has a major role in transport planning procedures in most Gauteng cities, although freight transport operations represent a substantial proportion of contaminants (Lindholm, 2010). Lindholm and Behnrends (2012) have reported that efficient urban transport is a very important component of the smooth running of transport networks, which in turn, are of significance for the economy as well as contributing to the needs of the citizens. The study further concludes that urban freight transport is increasingly showing a worrying effect on the quality of life, as urban areas now constitute the living environment of over 70% of the population.

2.2 Urban Goods Movement

Rossi and Chomi (2010) identified two main forms of freight movement: (i) end-consumer participation and (ii) Logistical movement. End consumer movement concerns the decision- maker as the end-consumer and involves the movements made by the end-consumers travelling from their abodes - or consumption zones - to other places where they make their purchases. Logistical movements require that movements be such that freight arrives at markets or directly at end-consumers. For these movements several decision-makers can be considered.

End-consumer movements are movements in which the consumer moves freight, be it a private or business end-consumer, who purchases and consumes the goods. For example, in this class of movement there is freight movement effected by a generic purchaser who buys goods in a shop and then transports them to a place where he or she will consume them. The unit of freight moved by end consumers is called parcel.

Logistical movements consist of those in which the freight reaches the facilities to where it is intended that it be delivered; i.e. markets for sale to consumers or in producing other products or services. As an example, freight movement from the distribution centre to a retail outlet. These movements result in the restocking of shops and warehouses. The entire totality of a particular logistics movement is called its "size". The study is mainly focused on urban freight, i.e. movement of liquid fuels by means of three modes of transport i.e. road, rail and pipeline transport. However, rail transport will only be included for reference, and discussed in full in this case study conclusion. All goods referred to in this study are liquid fuels freight including Oil, Petrol, Diesel and Paraffin. Fernie and Spark (2009) have reported that increases in vehicle size can allow many retailers to consolidate loads with fewer trips, cutting both the costs of vehicle/km and emissions. This applies to both liquid fuels freight and normal goods freight. As regards the various ways of moving freight from producers to end-consumers (for example, coal from a mine to liquid fuels refineries to fuelling stations). Several functional distribution relationships and trade schemes can be identified. Freight may reach end-consumers in different ways if the supply chain is well managed and controlled properly as illustrated in figure 2.1. The distribution of liquid fuels within Gauteng involves several logistics, supply chain management and transport role players, who each have different responsibilities within the whole distribution circle.

Figure 2.1: functional relations and commercial schemes Source: (Russo and Comi, 2006)

Without any direct contact points , e.g. the fuelling stations places order and buys fuels online and the liquid fuel companies send the products directly from the production site (to their consumption site –which is usually a fuelling stations within Gauteng province. There is one contact point that is usually called the retailer. In this case, the producer uses the network of retailers (black circle) in order to reach to consumption zone. The orders are placed 24 hours prior delivery. Road transport dominates the modal splits of inter-city freight transport; however, in many cases there are substantial waiting times involved. This is due to congestion on access roads and terminal squares; which is a serious problem within Gauteng major cities (Lindholm and Behnrends, 2012). According to Strong (2001), a "truck" carrier is one that moves single shipments, which fill out the visible capacity of a trailer. He further concluded that those particular "trucks'' pick up the freight at one particular shipper and deliver it to one particular consignee. Dependent upon the nature of the freight transported – i.e. its size and density - a full truckload may not fill the visible capacity of the entire trailer. Transport activities within Gauteng province are increasing in urban areas. This is part of the Gauteng provincial urban development program. However, these trucks are also needed in rural areas within the province.

Urban mobility in Gauteng is an important contributor to growth and urban areas' development. Freight transport carriers as well as other heavy goods vehicles are needed within Gauteng to service businesses and people in the urban area (Lindholm, 2010). The delivery of liquid fuels - especially diesel and petrol – takes place in Gauteng's fuel garages as scheduled, planned and agreed on between the liquid fuel producer and the consumer. The majority of respondents operate with regular delivery schedules; this might also be reliant upon stock availability with only a small proportion receiving completely ad hoc deliveries. The majority of retailers within 37

Gauteng province receive a mix - typically a delivery from parcel carriers. They typically have arrangements in place for emergency ordering of stock that is delivered when required alongside their regular planned deliveries (Cherret et al., 2012). Liquid fuel companies and third-party logistics companies can have considerable influence on delivery times, with the receiving business often having little input when the vehicles arrive. In most cases, if the vehicle arrives late, it might be turned back to the depot since the "on time" delivery failed. Cherret et al., (2012) have reported that a detailed understanding of liquid fuels freight vehicles dwell times (i.e. the period of time the vehicle remains stationery during loading and unloading operations) are important if any type of coordinated delivery and service plan is to be drawn up as part of a future city access plan.

Knowledge of how freight movements use any current delivery bays and the extent of on-street deliveries - which may contravene current waiting policy - is essential in order to better plan for delivery and service vehicle provision in the future. The type of goods being delivered also dictates the delivery requirements and as a result, some types of goods like liquid fuels, diesel and petrol require special vehicles or specialist in-vehicle equipment to enable loading and unloading to take place. This may necessitate the vehicle being close to the premises and are usually coupling, spanners, and specially designed horse pipes to transfer liquid fuels from tank trailer to none-movable silos or tanks (Cherret et al., 2012). According to Ghiani et al. (2004), the definition of distribution channels is "a process of bringing products to end-users or into retail stores which may be a complex process that involve several role players from the supply chain management point of view".

Whilst a few manufacturing firms sell their own products to end-users directly, in most cases intermediaries participate in the product distribution process. These are usually sales agents or brokers, who act on behalf of the manufacturer or wholesalers. These, in turn, purchase products from manufactures and will resell them to retailers. Retailers then sell them to end – users. Intermediaries add a significant mark-up to the total cost of a product but in the process, they benefit consumers because they provide lower transportation unit costs; without intermediaries manufacturers would be unable to achieve set targets. A distribution channel is a "path or process followed by a product from the manufacture to the end-user". A relevant marketing decision driven by normal marketing decisions is to select an appropriate combination of product distribution channels for each product distributed.

2.3 Urban liquid fuels freight actors

Liquid fuels freight transportation in urban metropolitan cities within Gauteng concerns both the pick-up and delivery of fuels to fuelling stations. Goods, parcel and courier services, waste transport and transport of equipment for the construction industry, transport of liquid fuels to different facilities and a broad range of other types of transport dominate within the Gauteng major city centres. The purpose of the measures to be implemented is to reduce the negative effects experienced during the interactions between goods vehicles and other infrastructure users. Several urban liquid fuels freight actors within Gauteng province are directly or indirectly involved in urban goods transport (Ruesch and Glücker, 2011):  The shipper, whose main interest is the delivery and picking-up of goods at the lowest cost whilst meeting customer needs and requirements, often as set out in a service level agreement.  The transport company, or third-part logistics company, whose main interest is to operate at low cost per load but providing a high quality transportation operation, satisfying the interests of the shipper and receiver.  The receiver, i.e. the shop-owner or the fuel-retail outlet owners, whose main interest is that products be delivered at a short lead-time; that is 24 hour period after an order has been placed.  The end consumer, or end user. In this class we can consider: o Inhabitants (residents or businessman/employees), whose main interest is to minimize the disutility caused by goods transport, o The visitor/shopping public, whose aim concern is to minimize the disutility caused by goods' transport and variety of the latest products in the shops/ fuelling stations.

 The liquid-fuels urban-public administration; in this class we refer to: o Local government (metros and municipality) whose prime concern is an attractive city for inhabitants and visitors, with minimum disutility, although having effective, efficient and reliable transport operations, o Provincial government, whose main interest is to make sure that the transportation of liquid fuels within Gauteng province, is achieved in a safe and

reliable manner. They provide and manage weighbridges and enforce several by laws in metropolitan roads within the province. o National government, whose main interest is to minimise external effects from transport and maximise net economic benefits, the national Department of Transport will not be a focus in this study as it concentrates on Gauteng province (although national governments role and actions will be used occasionally for references purposes).

Before planning a city's logistics system, it is important to understand its elements and requirements. According to STENG et al. (2005), there are four key stakeholders involved in urban freight transport: (1) shippers, (2) freight carriers, (3) residents and (4) administrators/governments. Each group has its own specific objectives and goals. Each tends to behave and operate in a different manner and needs to be considered. The organisation of the journey is from producer to the end-user. Liquid fuels freight carriers/ transport, third-party logistics and administrators are the participants in the delivery task. The main characteristic of their relationship is that a slight change by any one part may affect the whole situation and compromise distribution. For instance, a liquid fuels freight transporter with a lower efficiency level would influence the quality of the service level agreements of the system and hence increase the difficulties of management for the administrators. Such inefficiency would also reduce the satisfaction levels of consumers and the reliability of firms and increase the operational cost, Taniguchi (2004), considers that there are three necessary targets that could be achieved by applying city logistics: (1) mobility, (2) sustainability and (3) liveability.

Mobility is the ease of movement, which is the basic requirement for the transport of goods in urban areas. Goods are required to be delivered "Just-In-Time" (i.e. on time delivery as agreed between two parties). Therefore, the balance between a sufficient and reliable road network capacity and reduced traffic congestion during or at off-peak times is an important issue within Gauteng province. Concerning sustainability, which is becoming more and more important, environmental issues and energy conservation would need to be taken into account, as the process could be harmful to health. Thought needs to be given to the residents within the province. This involves an assessment of the conditions and situations that are experienced and interpreted within an individual’s life, such as safety, peacefulness, attractiveness and charm.

From the above it is apparent that urban freight movement involves many parties, who intend to play different significance roles. Wisetjindawat et al. (2007) studied the interactions between freight transport participants in an urban market and proposed a model for urban freight movement incorporating the behaviour of freight movers and their interactions with supply chain management.

The distribution of liquid fuels according to NRTA, 1996 is called Hazardous Materials Transportation. Hazardous materials transportation is a complex, dynamic and highly regulated process that requires formalized training and strict compliance with the regulations as legislated for by government (Strong, 2001). Bus lanes are commonly found in cities within Gauteng's ambit. Permission to use them is often granted to other vehicle categories such as taxis, diplomatic cars and cars used by the disabled. Permission can be extended to certain categories of freight vehicles to create incentives, thereby developing a sub-network for freight vehicles (see also material infrastructure measure). Vehicles would benefit from higher speed especially if permission had been given for delivery during peak hours. Transport companies and third party logistics companies would benefit from a reduction in travel time and hence increase the efficiency of their deliveries. This type of measure mainly concerns movements between the white and black circles as set out in Figure 2.1. Other governance policies concern the requirement for a minimum load factor on the road. Here the aim is to create incentives to increase load factors, which is beneficial in terms of efficiency – i.e. economic impact. This type of measure applies to transport companies/third part logistics companies and seeks to optimise transport between the white and black circles as set out in Figure 2.1. Implementation of load factor differentiation faces a number of challenges as has been shown by the experiences of Copenhagen and Gothenburg (Rossi and Comi, 2010). It is possible to define the critical load factors by taking account of the average, over a certain period of time, of indicators such as weight, volume, number of parcels or pallets, or the number of customers visited. However, three problems could be encountered:  The first is how to set the threshold value for this measure in a way that would be meaningful in Gauteng province. One solution is to estimate an average in the pre- scheme phase and to set the threshold slightly above the observed average. The Gothenburg approved experience has shown that, in view of load factors variability across vehicles, there will be vehicles which will not be able to reach the threshold and

would therefore lose the incentives/ target; ideally the threshold should be differentiated on an individual basis:  The second problem is due to the variability of overtime of the local factors within the same vehicle; the Gothenburg experience has shown that in most cases it has been possible to improve the load factors only temporarily, which means it might not be sufficient to maintain the incentives in the long run;  The third problem is to define the size of the area over which the load factors are calculated, whether this should be the area where incentives apply or a wider area covered by the delivery/ collection routes of the vehicles.

The scheme requires a reporting mechanism since the Gauteng province city authority can calculate the load factor measure only based on the data communicated by vehicles to the system. The Gothenburg experience has demonstrated that technology based on GPS, digital pen and mobile phones can be effectively used for the reporting task, as the two units can respond to each other. As this equipment is an additional cost for the operators, the scheme could be implemented on a voluntary basis to avoid opposition. Interestingly, some Gauteng province city administrators have recently tried to create incentives to switch from own account to third party accounts. The presumption here is that third-party accounts are more efficient. The problem of empty running in one leg of the delivery trip (return leg) and of the collection trip (outward leg) occurs in own account operations and is indicative of poor efficiency and poor planning. Another reason is the occupation of parking spaces by own account vehicles which is seen negatively when, during idling periods, the vehicle are parked for many hours in areas with a shortage of parking spaces . An example is given by Rome, where incentives have been given by extending the time windows for third parties. In 1999 in Gauteng, the share of third parties was about 46% and, with incentives, it becomes about 79% (Rossi and Comi, 2010). Another type of governance measure is road- pricing. Different forms of access charging have been implemented in Gauteng's cities. This measure is chiefly aimed at regulating passenger and goods traffic. Underlying the scheme, the following alternative principles apply:

 All those willing to pay have access; payments are possibly subject to exemption and discount for certain categories, or  Only certain users’ categories are granted access and have to pay a charge for it.

This measure affects shippers, transport companies, receivers and end-consumers once it is implemented and could influence the cost of transport and hence the cost of products. It could 42

also modify the revenue of some of the participants (e.g. transport companies), influencing goods movement between white and black circles as illustrated in Figure 2.1. The congestion charging schemes in cities such as Johannesburg and Pretoria is applied to both passenger and freight vehicles. All those who are willing to pay the charge are granted access to the central area. In Johannesburg and Pretoria, there are discounts for residents and exemptions vehicle propulsion categories (electric, CNG, LPG and hybrid). Some cities within Gauteng province issue specific permits, such as those for using loading and unloading zones during pick-up hours. The aim is similar to that discussed in the case of material infrastructure measure with the difference being that the area is subject to specific permits. This is exemplified by the city of Barcelona where, given the lack of off- street loading capacity close to commercial premises, a system for multi-purpose lanes has been implemented. In particular, the system converts the equivalent of 44 on-street parking spaces into unloading spaces during prescribed hours. During peak hours, the lane is used as a priority bus lane, while at night –time it is used for parking private vehicles, we have seen such activities in and around Gauteng province, namely Gautrain bus stations and BRT stations. In the event of scarcity of delivery bays as well as their inappropriate use(e.g. occupied by private vehicles) regulations must be enforced to ensure that they are used only by commercial vehicles designated for the specific road use and, in particular, commercial vehicles that meet certain requirements.

For example, Gothenburg has followed a strategy permitting the use of loading bays only to vehicles whose load factors was no less than 65% (Rossi and Comi, 2010). Lindholm (2010) has reported that issues such as laws and regulations, infrastructure, finance, politics and culture, practical concerns, technology, and impact are the factors that control the centre. Barriers and drivers influencing the above factors have been identified and are one result from this case study. Knowledge of these factors, barriers and drivers could be used when working with sustainable urban freight issues and challenges, as well as describing and developing the area itself. The main stakeholders studied and discussed in this case study are the local authority and their contacts with other stakeholders and actors (transport operators, retailers, trade organizations and others that depend on freight transport). The focal point of the study was the transportation process and planning. The system investigated in this case study was the liquid fuels freight transport operations carried out within the urban areas of Gauteng province and how this system can be handled as efficiently and economically as possible. However, private

cars, public transport or other types of personal transport are excluded from this case study and liquid fuels freight is a centre of discussion.

The study investigates methods of optimising transport and includes certain specific detailed solutions to urban liquid fuels freight transport (e.g. urban consolidation centres or environmental zones). Contributing factors to the urban environment (pollutants, congestion etc.) from freight transportation are discussed and suggestions put forward. The geographical limitations of Gauteng’s urban areas have been discussed (defined as city centre areas together with suburban areas and not countryside areas falling under a municipality). Suggestions and assumptions have been based on the existing infrastructure and optimised according to the physical urban plans of each Gauteng city studied and researched. The focus of this study was on small and medium sized cities within Gauteng, and is based on Swedish municipalities as well as a number of northern European cities that transport relatively large amounts of liquid fuels within city centres. The result should be useful for and applicable in other contexts. The number of inhabitants in small and medium sized cities within Gauteng province varies from less than 10 000 up to around 1000 000. Large Gauteng cities such as Johannesburg and Pretoria represent approximately the size of medium-sized cities in South Africa. Below factors tend to play major role in the liquid fuels freight distribution within Gauteng province;

2.3.1 Delivery times

Logistics operators have a desire for 24-hour delivery times after the consumer has placed an order. However, the public do not want Lorries or trucks on the road during peak hours. Therefore, schemes exist to restrict the movement of trucks in urban areas within Gauteng province (Egbunike and Potter, 2011). Limiting truck movements during the day has reduced congestion and pollution while limiting their movement at night reduces occurrences of noise, disturbance and security. This has raised some concerns from retailers, liquid fuels logistics companies and trade associations who all have concerns on the impact on operations and distribution (Browne, 2005). They require a balanced approached. Freight pipelines, are however unseen and unobtrusive but efficient and reliable, and therefore it is possible that liquid fuels freight may be delivered anytime within a 24-hour window period. This is exemplified by the Transnet rail system, which was in operation for 19 hours a day, delivering liquid fuel across Gauteng province liquid fuel terminals (Egbunike and Potter, 2011).

2.3.2 Transport Costs

Due to the complete automation of this factor, there may be a reduction in manhandling costs as well as driver costs. The absence of a human interface helps reduce the costs involved in truck transportation. Again, there is a fixed annual operating logistical cost. The use of advanced scheduling techniques also makes it possible to reduce unused infrastructure capacity hence maximizing it (Egbunike and Potter, 2011). However, there may be minimum requirements in the distribution network to achieve these savings (Egbunike and Potter, 2011). Given that, the freight pipeline may form part of an intermodal transport flow, these cost savings will need to exceed the additional handling costs for transfer to/from the pipeline.

2.4 Choice of freight modal

USDOT (2004) reported, “Reliability is identified as one of the main principle variables that affect the choice of the transport type and the shipment size of the freight”. The liquid fuels distribution companies identify reliability as an important primary attribute of transport because it affects the amount stock that needs to be transported safely to ensure that consumers/distributors do not run out of product. The reader should consider that restocking deliveries are usually planned by journeys made of multiple trips between delivery stops and trips planned for any given journey are defined according to logistical decisions. In order to simulate the existing dependencies among successive trips (of the same journey) according to spatial-temporal connection among activities of different trips (e.g. with respect to time constraints), the tour based approach has to be used (Nuzzolo et al…2011).

Many logistics companies and liquid fuels companies prefer to use different modes of transport to move different type of liquid fuels products within the Gauteng province. Many factors influence decisions and these are discussed in the paragraph below. Liquid fuels companies prefer to use pipelines and rail transport to distribute fuels from the liquid fuel's manufacturing refineries to their distribution terminals and road transport to the fuelling stations within Gauteng province. Fernie and Sparks (2009), have reported that when considering the delivery of retail supplies over shorter distances, the transport type options are usually road, rail and inland water way service (pipeline transport). They further state that retailers have traditionally

relied much more heavily on road freight services rather than other modes of transport due to the below reasons:  Their distribution centres and shops have lacked direct rail and water way connections;  The distance between the distribution centres and shops is usually too short for rail and pipeline services, which are necessarily long haul modes (to be competitive);  Operators of rail freight and pipeline services have found it difficult to meet some retailers' requirements for rapid and reliable delivery within Gauteng province

In recent years however, certain major liquids fuels retailers including Engine, Shell, Caltex, Total, BP and Sasol have begun to make much more use of those alternative types of transport. The figure below illustrates how liquid fuels freight logistics information flows via different systems in the entire liquid fuels freight logistics chain in order to fulfil all actors involved requirement (services).

Figure 2.2: Third-party reverse logistics

(Source: http://www.fedex.com/us/solutions/downloads/acer.pdf

2.4.1 Characteristics of three modes of transport

2.4.1.1 Railway

According to Tseng et al. (2005), Railway has advantage of carrying capacity, lower influence by weather conditions and lower energy consumption while disadvantages are high cost of essential facilities, difficult and expensive maintenance, lack of elasticity of urgent demands and time consumption in organizing railway carriages.

2.4.1.2 Road freight transport

Road freight transport has advantages such as cheaper investment funds, high accessibility, mobility and availability. Its disadvantages are low capacity, lower safety and slow speed. The excessive usage of land transportation also brings many problems such as traffic jams, pollution and traffic crashes. In the future to improve the land transport in efficiency and reliability, a revolution of transport policies and management is required within Gauteng province e.g. pricing.

2.4.1.3 Pipelines

Pipelines have a strong advantage in that they carry high capacity, are less affected by weather conditions, offer cheaper operation fees and continuous conveyance; the disadvantage are expensive infrastructures, harder supervision, goods specialisation and regular maintenance needs.

Ghiani et al (2004) categorise the different types of transportation as follows: there are five basic types of transport ( water, rail, road, air and pipeline), which can be combined in several ways in order to obtain door-door services such as those provided by, for example, intermodal carriers and small as shipment carriers. Merchandise - or liquid fuels in containers - is often consolidated into pallets or containers for both protection and to facilitate handling at terminals. Containers may be refrigerated, ventilated, closed or with upper openings, etc. containers for transporting liquids usually have capacities between 14 000 and 20 000cm³. When selecting a carrier, a shipper must consider two important parameters: cost and transit time. The cost of the shipper operated transportation service is the sum of all logistical costs associated with operating terminals and vehicles. The price of the transportation service is simply the rate charged by the carrier to the shipper. Air is the most expensive mode of transportation, followed

by truck, rail, pipeline and water transport. According to recent surveys by NDOT, transportation by truck is almost seven times more expensive than by train, which is four times more costly than by ship. Transit time- is the time a shipment takes to move between its origins points to its final destination. It is a random variable influenced by weather and traffic conditions. One must bear in mind that some types of transport (e.g. rail) must be used jointly with other types of transport (e.g. road) which is called transport intermodalism to provide door-door transportation services.

The standard deviation and coefficient of variation are two measures of the reliability of a transportation service. Rail transportation is inexpensive (especially for long distance movements); relatively slow and quite unreliable, as a result the railroad can be regarded as a slow mover of raw materials huge bulk at affordable rates. Trucks are used mainly for moving semi-finished and finished goods. Road transportation can be by truckload (TL). Less than a Truckload is called LTL. A TL service moves a full load directly from its origin to its final destination on a single trip. If the shipment adds up to much less than the vehicle capacity (i.e. a LTL) it is more convenient to resort to several trucking services in conjunction with consolidated terminals rather than to use direct shipments. As a result, LTL is slower than TL trucking (Ghiani et al., 2004). Urban freight logistics within Gauteng province can be broken down into many elements, such as storage, transport and handling. Converting improvement of the logistics process is usually only focused on a single element. However, from a macro perspective the improvement can help bring the best profit to the society or company. Pipeline transport might be more expensive than road transport but the storage costs might be less. Thus in terms of total costs, pipeline might be the most reasonable type of transport for a particular transport purpose, for example, transport of liquid fuels (Tseng et al., 2005)

2.5 Components of logistics in fuels distribution

Figure 2.3 provides an overview of a liquid fuels freight logistics system. Logistics services, information systems and infrastructure/resources are the three components of this system and all three are closely linked together. Ghiani et al. (2004) have reported that the interaction of the three main components in a liquid fuels freight logistics system is as follows. Logistic service supports the movement of liquid fuels from input through production to consumers, as well as associated waste disposal and reverse flows. They include activities undertaken in-

house by the users of the services (e.g. storage or inventory control at the manufactures plant) and the operation of external service providers. Proceedings of the Eastern Asia society for Transportation Studies, vol. 5 pp. 1657 – 1672, 2005 1658, state that logistics activities comprise of physical activities (e.g. transport, storage) as well as non-physical activities (e.g. supply chain design, selection of contractors, freightage negotiations). Most activities concerning liquid fuels freight logistics are bi-direction. The information system includes modelling and management of decision-making. Issues that are more important are tracking and tracing of the product. The information system provides essential data and consultation in each step of the interaction among logistics services and the target stations. Infrastructure comprises human resources, financial resources, packing materials, warehouses, transport and communications. Most fixed capital is for building that infrastructure. These are the foundations of a liquid fuels freight logistics system.

Figure 2.3: Overview of Logistics System

Source: (Russo and Comi, 2006)

Logistics disposal Logistics information infrastructure systems logistics services

consumers

logistics services

distribution

logistics services

51 production

Figure 2.3: overview of logistics systems

Source: (Russo and Comi, 2006) In order to get a full picture of commercial vehicle movements and to understand their influence, it is important to quantify the impact of service vehicles that support business activities on a daily basis (Cherret et al., 2012).

2.5.1 Reliability

Reliability of delivery affects both the supplier and the end user. Egbunike and Potter (2011) stated “the growing number of vans may play a better role than HGV’s in adding to peak period congestion, when the effect of the congestion is to reduce journey time reliability.” We have seen companies such as Engen and BP have 12-ton vehicles are able to deliver during peak hours within Gauteng city centres when demand for fuels is high. However, the additional congestion cause by such large vehicles entering already crowded roadways affects the reliability of delivery.

2.5.2 Environment-

Egbunike and Potter (2011) stated, “Policies are required to support the development of a range of low carbon and high efficiency technologies on an urgent time scale and greater international co-operation to accelerate technological innovations and diffusion which will reduce the cost of mitigation”. This means that the continued use of large tankers on already congested roads needs consideration.

2.5.3 Safety and security Road freight crime is an on-going problem and is estimated to cost the South African economy R250 million a year. This figure includes hijacking and stock theft by unreliable truck drivers and truck assistants (Egbunike and Potter, 2011). This of course, has an effect on suppliers and, to a lesser extent, end-users all of whom would encourage any type of transportation that reduces the risk of theft.

2.6 Drawbacks with urban freight

There are also a number of drawbacks for urban freight pipeline technology within Gauteng province. These need addressing before the technology can be adopted more widely.

2.6.1 Technology acceptance

One of the drawbacks is acceptance of technology as a viable alternative to conventional types of transport where the possible use of the freight pipeline transport can utilised as opposed to the more conventional type such as road transportation. In such cases, it is not envisaged that this technology will completely replace other forms of transport but work in tandem with them in an attempt to optimise the transportation network within Gauteng province (Egbunike and Potter, 2011). Whilst this optimisation is necessary, certain problems exist with the use of such technology. Considering intermodal transfer with existing types of transport, Egbunike and Potter, (2011) have noted that any automatic transport system (such as pipelines transport) will need to interface with other transport modes and the boundary for the design of such a system needs to include this interface. The efficiency and seamless transfer of liquid fuels freight at the interchange facilities or distribution centres as well as the increase in product handling instances are of concern. Whilst these may serve as potential barriers to the adoption of this technology, some trade-offs or a balancing of priorities may be applied here. These trade-offs, according to Voss (2007) are a constant requirement by liquid fuels freight stakeholders when considering competing short and long-term priorities. These may include managing these multiple liquid fuels product handling facilities to the best possible level of efficiency so that as much traffic as possible can be taken off the roads to minimise the effect of environmental pollution etc. These interchange facilities should not affect the just-in-time delivery windows for liquid fuels freight as this system is required to be in operation for close to 24 hour daily and operates at speeds in excess of current type of transport.

2.6.2 Support for adoption

This research has already demonstrated the general lack of interest from policy makers (i.e. government officials) in the use of new technologies. This may be a major drawback as the absence of political push may be a stifling factor towards the adoption of technologies such as pipelines. The fuels retail sector will also need to be convinced, especially if they are likely to be providing the majority of funding for such projects. This is the case with ownership with

current gas and liquid pipelines, where in the majority of circumstances, the operator owns the infrastructure. Some promoters argue that the benefits are not fully understood (Miles and Loose, 2008), while Hogged and Roe (1998) have raised the challenge of stakeholders not fully perceiving the present, issues that may arise in the future regarding liquid fuels freight distribution. However, there are also significant risks in supporting new technologies that may damage the current liquid fuels freight distribution image.

2.7 Factors determining the choice of freight

Lindholm (2010) reported that there is a general lack of awareness of freight transport issues, especially within Gauteng province. It is also regarded as an issue at national level. Road transport generates more pollution per unit of distance travelled than most other forms of transport. However, there are very few alternatives to current methods of providing liquid fuels deliveries. A positive trend has been the decline of air pollution due to better engine designs and the phasing out of leaded fuels in the whole South Africa. Diesel trucks are significant sources of particulate matter and NOx emissions, an issue compounded by their use as distribution vehicles for liquid fuels (Rodrigue and Dablanc, 2010). According to Strong (2001), there are a number of advantages when moving liquid fuels in truckload quantities. Strong (2001) has further reported that a time benefit is gained by transporting by trucks. If a truck can move directly from the origin to destination, with no intermediate deliveries, it is easier to reach the destination much quicker. Wisner et al. (2009) noted that any urban area depends, for its existence, on a massive flow of commodities into, out of and within its boundaries, yet the transportation of liquid fuels remains a forgotten aspect of urban transportation study. According to Browne, Piotrowska, Woodburn and Allen (2007), movement of liquid fuels freight on roads clearly plays an important role in the functioning of towns and cities like Johannesburg and Pretoria. Gauteng’s cities remain congested areas where space utilisation comes at a premium and where the presence of many stakeholders impose concerted efforts to ensure urban markets remain serviced in an effective and environmentally friendly fashion (Rodrigue and Dablanc, 2010). Liquid fuels distribution companies have to consider and identify the following major components in their total liquid fuels freight logistics costs. This include among others Wisner, (2009)  Ordering process costs

 Capital carrying costs in goods transits  Capital carrying costs in inventory management  Warehousing / storage costs  Loading and unloading costs  Safety stock check costs  Cost of lost and damage sock

These variables – and sometimes a few others - allow the total liquid fuel freight logistical costs of acquiring, delivering and storing the products to be computed by a model and those are the main factors that determine the liquid fuel freight transport choice (Wisner, 2009).

Goldsby (2000:27) has reported that logistics performance is usually measured in terms of speed and accuracy of order execution. There is a requirement that all staff involved in logistics be properly trained for the employer to be profitable. Storage capacity of liquid fuels at various liquid fuels terminals within Gauteng province is a critical component of any liquid fuels freight logistics system. The price of liquid fuels has increased significantly since year 2000 to date; much of this are attributed to increasing taxes, rand depreciation and increasing demand, linked to limited increases in supply capacities. The ability of liquid fuels producers to significantly increase production (i.e. increase the supply) is also questionable (Simmonds, 2005). Urban consumer nodes within Gauteng province that are served by road freight transport include shops, restaurants and fuel stations. We also see equipment, office supplies delivered to commercial premises, raw materials and finished goods to manufactures, and wholesalers, suppliers to schools, hospitals and public buildings, refuse collection, disposal, and domestic deliveries. The Gauteng liquid fuels freight movement is very important for many reasons, among the most significant are:  The environmental effect of urban freight movements (in terms of energy use and environmental impact such as pollution, noise, visual intrusion etc.)  The total cost of freight transport and physical distribution is significant and has a direct bearing on the efficiency of the economy.  The effect of freight transport costs increases the costs of commodities consumed in that region.  It is fundamental to sustain our current way of life.

 The role it plays in serving and retaining industrial and trading and trading activities that are essential major wealth generating activities.  The contribution that an efficient freight sector makes to the competitiveness of industry in the region concerned.  The deleterious effect on a region if its industries are rendered uncompetitive due to poor freight services (Taniguchi, 2004)

2.8 Logistics management

Transport is a means to an end and cannot be regarded in isolation. Logistics and supply chain management is an essential ingredient of the transport mix. According to Kroon et al. (1999), the free movement of goods is the cornerstone of any efficient trading system. Just a pebble thrown in a pond creates ever-larger circles, so the transported deliveries act on the economic area (Kroon et al., 1999). Logistics and freight movement tend to be complicated subjects but are a vital component in ensuring that transport and supply chain management work together simultaneously. From an economic perspective, whatever is moved from point A to point B should be done at a lowest possible cost, often in the fastest possible time. Best economic results come from using the most competent operator. An efficient economic system creates jobs for appropriately skilled individuals (Bourlakis and Weightman, 2004). In order to ensure that fright deliveries are economically efficient, logistics managers or controllers need to know the major cost drivers on the vehicle and manage them in line with the type of transport agent.

If we use a truck in this example, then we have four main components forming a direct cost, but only one income source – income from freight delivered. The main costs drivers are (KPI): fuel, tyres, the driver and the maintenance on the truck. Those are only the basics. According to Hughes (1969), fuel is such a high logistical variable cost that it is desirable to keep a basic record of each vehicle’s fuel consumption on every trip. Logistics and freight movement is actually the entire supply chain that needs to be managed carefully in order to ensure the costs are not excessive when compared to the revenue earned from that load (Hughes, 1969). With the rapid advance of technology in recent years, there is a significant move towards “on line” ordering and door-to-door deliveries. It is useful to note that whilst logistics concerns itself primarily the processes run by a single firm, the term "supply chain management" encompasses the external environment of an organization and consequently includes managing the external flows of materials, information and revenue between various businesses (Bourlakis and

Weightman, 2004). In modern industry, the goods to be transported increasingly require special techniques for handling and protection. This can be facilitated by movement in specialised vehicles, particularly for materials in bulk, such as fuel, oil, cement, and wheat and various chemicals in liquid form (Hughes 1969).

2.9 The broad meaning of logistics management

The Council of Logistics Management (1991) defined logistics as being “part of the supply chain process that plans, implements and controls the efficient, effective, forward and reverse flow and storage of goods, services and related information between the point of origin and the point of consumption in order to meet customers’ requirements”. Johnson and Woods' description (cited in Tetanus, 1997) uses ‘five important key terms’, which are logistics, inbound logistics, materials management, physical distribution and supply-chain management. Logistics describes the entire process of materials and products moving into, though, and out of a firm. Inbound logistics covers the movement of material received from suppliers into the distribution centre or warehouse. "Materials management" describes the management of materials and components within a firm. Physical distribution refers to the movement of goods outward from the end of the assembly line to the customer.

2.9.1 Supply-chain management

Finally, supply-chain management has a somewhat wider scope than logistics and it links logistics more directly with the user’s total communications network and with the firm’s engineering staff (Tseng et al., 2005). Urban freight, transport and logistics operations are concerned with the activities of delivering and collecting goods in town and urban centres. These activities are often referred to as ‘city logistics’ as they entail the processes of transportation , handling and storage of goods, the management of inventory, waste and returns as well as home delivery services. Often many of these processes, or parts of them, are undertaken outside urban areas but they still have an impact on urban operations. Therefore, liquid fuels freight transport and logistics operations within Gauteng province cannot be viewed and studied in isolation, but rather in the context of the entirety of supply chains that typically cross the geographical boundaries of urban areas (Browne and Allen, 2006). Bourlakis and Weightman (2004) have stated that various researchers have posited that

logistics is a key business process that always provides increased customer satisfaction. Harvey (1996) quoted Christopher as defining logistics as the process of strategically managing the procurement, movement and storage of materials, parts and finished inventory (and related information flows) through the organization and its marketing channels in such a way that current and future profitability are maximized through cost effective fulfilment of orders.

2.9.2 Logistics

Waters (2003), states that logistics is the related positioning of resources or the strategic management of total supply chain management. He further states that logistics has always been a central and essential feature of all economic activity. Some participants in the transport business arena suggest that lean logistics puts too much emphasis on costs and is not flexible enough to deal with rapidly changing conditions within operations. The logistics industry has already embraced a wide range of information and communication technologies and reaped major efficiency gains as a result. This is almost certainly the area with the greatest ‘win –win’ potential, i.e. where efficiency gains go hand in hand with environmental benefits through reduced travel distances fewer vehicles movement, better matching of vehicles to work and improved levels of load consolidation (Browne and Allen, 2006). Shaw (1993) defines logistics as the management of the supply chain, from the raw material right through to the point where the product is finally used or consumed. The definition conveys the idea that logistics is about goods in transit as well as goods in storage. It also takes the overview of the entire physical distribution chain: upstream from where the raw materials are obtained, and downstream to the final point of sale. Along this chain, the goods may change hands several times from producers, through intermediaries to consumers.

2.9.3 Logistics and distribution in Gauteng

In Gauteng province distribution of materials such as coal, timber and liquid fuels may be relatively simple, involving bulk transport and storage of commodities that are low value related to their weight and volumes. As value is added and a greater variety of stock lines is manufactured, however, the distribution system becomes more complex. Retailers such as fuel service stations at the end of the distribution chain may handle thousands of different lines of consumer goods. The role of the distribution manager is to ensure that enough stock can be made available where and when the consumer needs it. The goods must also arrive in 58

acceptable condition, without damage or loss. This service must be performed at minimum cost consistent with the standard required. Thus, logistics is concerned with getting the right goods safely at the right time, at the right cost. According to Shaw (1993), logistics broadly consists of the following components:  Transport – the inward movement of supplier and outwards movement of delivery;  Warehousing – the storage of goods in various stockholding points along the distribution chain;  Inventory management – the management of the value of goods held, optimising the level of stock held;  Order processing – the use of information systems to handle orders upstream from suppliers and downstream to consumers;  Packing and material handling – the design of packages and the equipment used to handle items individually or as unitised loads.

Hugo et al., (2004) reported that the integration of logistic activities has brought benefits, both in terms of overall cost reduction and in better service quality to the customer. The term "total distribution concept" has been adopted. Commercial decisions concerning logistics operations are made with the view to reducing costs and/or increasing revenue. These are developments where logistics may bring additional benefits to consumers. In competitive markets, distribution that is more efficient helps bring down prices charged for the final product and quality and availability of the goods will also improve (Shaw 1993). Dent (2011) has reported that, that distribution can play a wide variety of roles for suppliers, depending on the maturity of the product category, product life cycle stage, market share of the supplier and density of the final tier in the distribution system. The distributor’s primary role is as a route to a supplier's market; its effectiveness will be critical to the supplier seeking to reach a segment - or the entire market.

Distributors rarely know the true cost and their shipping charge. Supplements tend to be arbitrary and designed not to alienate customers. Waters (2003) recorded that logistics management is essentially an integrative process that seeks to optimise the flow of materials and supplies through the organisation and its operations to the customer. It is essential that a planning process and information-based activities are practiced at their best in order to accomplish the distribution of liquid fuels freight. Requirements from the market place are translated into production requirements and then into materials requirements through this 59

planning process. Ballou (1999) defines logistics as the process of planning, implementing and controlling the efficient, cost-effective flow and storage of raw materials, processing inventory and finished goods related information from point of origin to point of consumption for the purpose of confirmation with the customer.

2.10 Logistics in the Gauteng Liquid fuel industry

Logistics is concerned with creating value, value for the customer and suppliers of the firm or entity, and value for the firm’s stakeholders and role players. Value in logistics is created in terms of time and place of the product. Products and services have no value unless they are in the possession of the customers when (time) and where (place) they wish to consume them (Ballou, 1999). For example, the truck industry will not create value if there is no product to distribute. Liquid fuels freight logistics management views each activity in the total supply chain management as contributing to the process of adding value. If little value can be added, it is questionable whether the activity should exist. However, value is added when the customer is willing to pay more for a product or service than the cost to place it in their hands. Without bulk trucks and trailers, liquid fuels freight movement within the province would be meaningless as those trucks are the only means to transport liquid fuels freight to all fuelling stations within the province. Unfortunately, in Gauteng province, pipeline transportation does not connect liquid fuels distribution centres and fuelling stations. Road transport is the only means of supplying liquid fuels to the various fuelling stations within the province. The liquid fuels companies outsource the distribution services to third party logistics companies such as Grindrod logistics, Unitrans, Barloworld, Imperial and many others.

2.11 Logistics service providers

As in every sector of the economy, logistics service providers assist in the movement, storage and management of vast quantities of inventory, including transportation carriers (primary trucks), storage facilities (public, private and contract) and third parties of various kinds who administer and/or manage products or information (Bourlakis and Weightman, 2004). As logistics is often considered a supporting rather than a mainstream function, it has been an obvious candidate for externalisation. For many firms such as Shell, BP and Pick-n-Pay, logistics has ceased to be an activity that they directly manage and has become a service that

they purchase from outside specialists like Unitrans's supply chain solution (Waters, 2003). Gauteng province’s external purchase of external transport services is constrained by government controls on the capacity of the industry. These controls generally exclude trucks operated on an own account basis and firms are thus encouraged to internalise their road liquid fuels freight operations. It is very common to contract out transport and - to a lesser extent - warehousing but comparatively rare to outsource order processing. Outsourcing also gives companies access to specialist expertise in firms whose core skills are logistics management. In Gauteng the management of liquid fuels freight logistics has become more demanding as a result of rising customer expectations, the proliferation of regulations controlling vehicle operation, working conditions and product handling, the rapid rate of technological change and uncertainties about future economic and development trends (Waters, 2003)

2.12 Third party logistics

Third party logistics (3PL) involves the use of external organisations to perform some or all of the organisation's logistics activities. In Gauteng province, we have seen that most companies producing liquid fuel use third parties as logistics experts to run their distribution operation under a very strict service level agreement. The rationale for such outsourcing is that, with intensified global competition, organisations are concentrating their energies on the core activities that are critical to their survival, leaving the rest to specialised entities. These third party transport companies provide differentiated services through their investment in dedicated assets, technologies and method of the organisation; even their service rates differ (Hugo at el., 2004). The major reason for liquid fuels companies within Gauteng province using third part logistics company is to run the liquid fuels freight distribution with increased emphasis on time based completion. Liquids fuels companies like Shell, BP, Caltex, Sasol and Total outsource their road distribution to third party logistics companies such as Unitrans, Imperial, Barloworld and Reef tankers.

2.13 Summary

Logistics providers are yet another example of "systems thinking". Within the discipline, transport is treated as one element that is combined and coordinated with others to offer total liquid fuels freight distribution services. As economies develop, the flow of materials, parts

and finished inventory become increasingly complex, as suppliers respond to the more sophisticated demands of efficient consumers who want a wide range of specialist products, many of which have to be moved a considerable distance to the point of sale (Shaw, 1993). Ballou (1999) has stated that logistics is a collection of functional activities that are repeated many times throughout the channel through which the raw materials are converted into finished products and value is added from the perspective of consumers. This further illustrates that logistics plays a huge role in making sure that liquid fuels freight is distributed to all fuel stations within the Gauteng province. Logistics cannot manage alone: it needs transport and supply chain management in order for it to function. Transport is therefore a key element and component of the planning framework for re-urbanisation. Although in Gauteng province logistics could be viewed as a complicated subject, transport tends to function as a system, whose interrelated elements are the trucks, roads and terminals.

Routing and scheduling of vehicles plays a central role in the process of equating customer demand with supply of liquid fuels to end users within the province and beyond. Logistics deals with the planning and control of liquid fuels freight and related information in in liquid fuels companies. Broadly speaking, the mission of logistics is to get the right product to the right place at the right time while optimising a given performance measure (e.g. minimising total manufacturing costs) and satisfying a given set of constraints (e.g. a budget constraint). In the military context, logistics is concerned with the supply of troops with food, armaments, ammunition and spare parts, as well as the transport of troops themselves. In civil organisations, logistical issues are encountered in entities producing and distributing physical goods. The key issue is to decide how and when raw materials, partially finished and finished goods should be acquired, moved and stored. Logistics problems also arise in firms and public organisations producing services. This is the case, for example with garbage collection, mail delivery, public utilities and after-sales services. In recent years, companies have begun to appreciate the importance of logistics and recognise that it is an essential function that clearly affects wider performance. It is now viewed as a single, integrated function that is responsible for all movement of materials through supply chains management, and thus includes the movement and distribution of liquid fuels freight within Gauteng province. Logistics has a clear strategic role in any liquid fuels freight distribution company (Waters, 2003). Stroh (2001) has stated that logistics departments were among the last to join the personal computer bandwagon, the main reason for this is that personal computers had the tendency to be relegated to the corporate

back seat and as such, it was thought that corporations had no need for such high priced accessories.

However, times have changed and corporate powers have realized that the liquid fuels freight distribution department can dramatically reduce costs and that by utilising the power of the computer this task can be significantly facilitated and managed properly. Improvements are necessary to accommodate population and employment expansion and meet the changing travel requirements and to support and improve the aim of economic vitality. The growing significance of Gauteng's liquid fuels freight transport and logistics is linked to increased population and sustained economic growth within the province. Liquid fuels freight distribution in Gauteng's cities represents from 10 to 18% of road traffic (COST321.1998).

All liquid fuels freight intermodal moves usually begin with a pipeline and end with the road (trucks) or rail transport. Trucks are used because they are used as ‘doors’ to move the liquid fuels freight from the shipper’s distribution centres to the point of consumption. “Intermodal connectors” is the name given to the access roads to the freight terminals. These "intermodal connectors" require comparatively less investment to generate the significant improvements they cause in the speed and reliability of liquid fuels freight movement. Intermodal connectors do not necessarily have to be roads; they can be the railway lines leading to the terminals. These connectors serve the purpose of linking the entire intermodal transportation network (Rodrigue, 2006). These are generally short portions of roads, their length typically not exceeding two kilometres. These are crucial connecting points in the entire trans-modal transportation system and because of their importance, are often referred to by the freight community as “front doors (Holcomb and Mary, 1996).

This study has reviewed city logistics measures that can be taken to regulate freight transport and logistics, especially liquid fuels freight distribution within Gauteng province. Deciding on the implementation of measures requires a full assessment of social and economic costs and defining who has to abide by them. The proposed classification will allow identification of who should take decisions or who should abide by them, taking into account the possibility of a correlation with the functional relations among the producers and the end-user consumers. Each measure was interpreted in terms of the actors/ decision-makers involved theoretical goals and attainable results. A temporal reference scale (strategic, tactical and operational) was also

recalled. The dominant patterns currently found in the Gauteng province cities are ones where prohibitions are the rule in order to carry out the obtainable measures according to their main promoter that is whether they are based on a public initiative, a private one or a joint initiative.

While some of the measures outlined above are those promoted and implemented by public authorities, other categories are either promoted directly by private agents or are the result of an incentive from public authorities to private agents. In the Gauteng cities, the implementation of urban distribution centres has created an incentive to switch from conducting an "own account" to using third parties. Finally, while some measures are easier to implement and at least show a higher degree of acceptability amongst stakeholders and actors, they could require a sound surveillance system to enforce compliance. For this purpose a consultation forum or public/private partnership could be pursued. The next chapter will discuss this study’s research methodology.

Chapter 3: Research Methodology

3.1 Introduction

A mix of research designs has been addressed and is based on consideration of the literature review and interviews of several stakeholders involved in the liquid fuels freight and logistics industry. The research methodologies that were followed to address the study problems incorporated two main steps. The first step was to collect data. The second one was the use of explanatory research in the form of experience surveys. This case study was built up and analysed using qualitative and quantitative research methods. The respondents were not influenced by the research instruments (Welman, 2003: 55). Quantitative research method represents 10% of this case study while qualitative research represents 90%. The overall research objective of this study was to investigate the extent to which transport contributes to the liquid fuels freight and logistics movement in Gauteng province and the roles of various stakeholders with the aim of improving the efficiency in the movement of liquid fuels. This was achieved through the following main research objectives:  By reviewing the current conditions of freight and logistics movement of liquid fuels and the importance of transport in Gauteng.  By investigating the several agents involved in logistics and freight movement of liquid fuels in a selected case study.  By evaluating how the agents interact throughout the process of freight movement of liquid fuels for the selected case study in Gauteng province.

3.2 CASE STUDY RESEARCH DESIGN

3.2.1 Research approach and methodology

Understanding the difference between the use of both qualitative and quantitative research design methods forms the basis of any sound and successful research design. According to Babbie and Mouton (2008) research methodology is the method by which techniques and procedures are used in the process of implementing the research design, as well as underlying principles and assumptions that underlie the use thereof. The main purpose and aim of any successful research methodology is to describe in detail how the research was conducted, what research data consists of, how the data was collected, analysed and disseminated (Berg, 2004: 307). In order to address this case study fully as well as the research questions and objectives

a combination of two research methods were simultaneously employed. These are qualitative and quantitative research methods. Both qualitative and quantitative research methodologies were applied and active research has been important and played an integral part of this research (Lindholm, 2010). Research studies have been mainly conducted within Gauteng province where all urban freight actors and stakeholders have been the focus and target respondents of this study.

3.2.2 Qualitative approach – freight reviews by interview

Qualitative research has been described as an attempt to study human action or behaviour from the perspective of the participants. The use of qualitative research also suggests that we view “qualitative” as a broad research methodological approach to the study of social actions or human behaviour in general. Qualitative research was used to direct information collection for this research study in order to understand the study’s questions and objectives. The overall research objective of this case study was to investigate the extent to which transport contributes to the logistics and freight movement of liquid fuels in Gauteng province. It considers the roles of various stakeholders and actors with the aim of improving efficiency in the movement of liquid fuels freight within Gauteng province. Twelve in-depth general interviews were conducted in three metropolitan cities (Johannesburg, Pretoria and Kempton Park) and complemented with information obtained during the preceding assessment. Qualitative interviews are described as interactions between interviewers and respondents in which the interviewer has a general plan of enquiry but not a specific set of questions that must be asked using particular words or in a particular order (Babbie and Mouton, 2008).

The interviews included a wide range of urban freight actors and stakeholders, all representing different perspectives of urban freight transport and at various levels and with diverse functions. The urban freight actors and stakeholders that were interviewed were transport local authorities (usually heads of department), members of MMCs from the Department of Transport, second and third-part logistics provider companies, trade union associations such as the National Bargaining Council of Road Freight Logistic Industry (NBCRFLI), and several labour unions SATAWU, TAWUSA, and COSATU. The interviews made use of a semi-structured approach and they included questions about the Gauteng province municipalities' roles in the liquid fuels freight distribution, truck drivers and

their assistance (working conditions, unions, and challenges during delivery time, problems) plans, policies and the Gauteng liquid fuels freight company distribution profile. The interviews together with the literature review present a qualitative view of the urban transport problems and possibilities for local authorities. Qualitative research concerns the study of the human attitude and behaviours and is best understood within their natural setting, as opposed to the somewhat artificial ones of experiment and survey study.

3.2.3 Quantitative method – freight review by questionnaire

The quantitative research methodology of this case study was conducted by means of fifteen numerical research questionnaires for the purpose of describing and explaining the observations of this case study. The research information was gathered by means of distributing the same research questionnaire to different liquid fuels freight stakeholders. Explanatory research was conducted using a survey-based questionnaire. Research questionnaires in this case study were designed and approved by Dr Burger from Statcon and were sent to random senior employees in the provincial department of transport, National Energy Regulator South Africa (NERSA), Transnet, and Petro SA, various liquid fuels companies as well as to other senior employees in mayoral councils of transport in Johannesburg, Ekurhuleni and Pretoria municipalities. According to Davies (2007: 28), a questionnaire is a research component consisting of a various kind of questions and other prompts to gather information from respondents.

A feature of questionnaires is reduced bias as there is standard uniform question presentation designed to eliminate bias. In this case, study the researcher ensured that his own opinion did not influence the respondent to answer questions in any particular way. There were no verbal or visual clues to influence the respondent's response. When respondents received mail, they were free to complete the questionnaire according to their own timetable, without pressure form the researcher. The researcher employed two junior University of Johannesburg students. Their duty was to distribute the research questionnaires to various liquid fuels stakeholders within Gauteng province. Participants who responded well were from Engen Langlaagte and Alrode, Sasol, BP in Alrode, Caltex and Total in Alrode, and most fuel stations managers and owners, Gauteng municipality MMC. 67

3.2.4 Research targeted participants

As described in the explanation above, this study mainly focused on urban freight issues specifically focussing on the liquid fuels freight distributions within Gauteng province. Personal interviews were conducted with:

 Liquid fuels logistic companies;

 Truck drivers;

 Supervisors and managers from transport companies;

 Trade unions; and

 Transnet.

Questionnaires were distributed to:

 Department of Transport;

 National Energy Regulator South Africa (NERSA) and

 Petro SA

 Senior employees of Mayoral Councils controlling Transport in Johannesburg, Ekurhuleni and Tshwane municipalities and

 The top five third party transport and logistics companies.

A pilot study was used to provide information supporting the planning effort of the research and Statcon under the supervision of Dr. Burger (the university department that assists with research) who was consulted to assist with the creation of the questionnaires. The data from responses of those who completed the questionnaires and those interviewed was analysed by the researcher Mr Nicolas Munyai (Senior IT manager at Amscor) using graph pad software to analyse data and this formed part of the research findings, and conclusions.

3.2.5 Privacy and confidentiality

Privacy can be viewed or defined in terms of an individual having total control over the entire extent, timing and circumstances of sharing known information with others. Salkind, 2003, describes privacy as the right of a person to limit access to information by others to aspects of their person that can include opinion, thoughts, or identifying information. Privacy involves aspects of anonymity. In the entire context of this case study, only the researcher has access to link the participants with the research results (Salkind, 2003: 62). According to Cohen (2002), confidentiality is the process of protecting an individual’s privacy. It generally pertains to the treatment of information that an individual has disclosed in a relationship of trust with the expectation that this information will not be divulged to others without permission. This means that all information gathered in this case study would be hidden or otherwise kept in a controlled situation particularly to avoid conflicts of interest. In preserving confidentiality, the number of people that have access to this study data will be restricted (Salkind, 2003: 64). In the context of this research, Statcon (statistical consultation service) personnel Dr. Burger and Mr Nicolas Munyai were the only individuals with access to the confidential information.

3.2.6 Length and content of research questions

The case study research questionnaires consist of nine pages, containing fifteen questions in total. The questionnaires were divided into three sections; Section A was limited to background or biographical information, whilst Section B explored the respondents' perceptions and understanding of liquid fuels freight distribution and urban freight liquid fuels distribution processes. Finally, section C explored the respondents' thoughts on and perception of their roles.

3.2.7 Types of questions

Bacal and Associates (2008) argue that a closed question, or closed-ended question is one that can be properly, easily and sensibly answered with a straight true or false response or a specific short factual answer. The researcher concluded that with closed-ended questions there is only one correct answer and an open-ended question is one that cannot be answered with a simple true or false answer, and often has several answers. This study has applied both a structured and an unstructured research questions approach. The researcher further concludes that structured research questions need to have a definite focus and call for a clear answer and unstructured research questions provide a broad opportunity for the respondent to respond, for 69

example, by using open-ended questions (Salkind, 2003:312). This study contained structured (or closed) questions that had required the respondent to choose from alternatives (yes/no) or choosing from a wide range of answers or allocating numerical ranking using a numerical scale; 1-, 2- and 4 point scale – this model ( a Likert-like scale) was also applied.

3.3 Conclusion

It is acknowledged that scientists use a wide range of variety methods and techniques to complete empirical research. This case study has used both qualitative and quantitative research methodology. The research methodology used differs according to the task performed by the researcher, from methods and techniques of research sampling to data collection methods, data analysis method. However, the selection of this study's research methods always dependent on the aims and objectives of the study, the nature of the phenomenon investigated and the underlying theory of the study (Babbie and Mouton, 2008). This chapter discussed, analysed and unpacked the research methodologies used in this study with specific reference to research approach, qualitative and quantitative methods, target participants, privacy and confidentiality of the research, length and content of research, and the types of research questions adopted by the researcher. The next chapters will provide a summary of this study case study in general in order to understand urban freight liquid fuels distribution within Gauteng province fully.

Chapter 4: Case study

4.1 Introduction

According strong (2001), each type of transport has its own governing or regulatory body. In Gauteng province the Department of Transport (DoT) regulates domestic freight vehicles and the Department of Energy through their agent, NERSA regulates pipeline transportation. The main metropolitan cities' logistics measures included within this case study include: time window access, sub-networks for freight vehicles, road-pricing, incentives to optimize transport efficiency (mainly economic impacts, e.g. increasing load factor per ton or per kg), and specialized permits (e.g. for use of loading zones during peak hours). Many of Gauteng province's cities have regulations on delivery time windows within the city centres, especially for pedestrian zones within those city centres. Whilst such measures are easy to implement, they require a sound surveillance system to prevent any possible violation or distraction by the public. These measures can influence the interests of retailers or fuelling stations owners who might at time control stock receiving times, therefore liquid fuels companies and transport companies must organize their deliveries in compliance with set regulations.

4.2 Limited traffic zones

An example is found in cities such as Durban and Cape Town where freight vehicle access and parking is subject to time-frame windows in the inner city area termed LTZ (Limited Traffic Zone). The same initiative also exists in Gauteng cities' centres where heavy vehicles (more than 3.5 tonnes) are granted parking access from 18h00 until 05h00. Light passenger vehicle (less than 3.5 tonnes) are excluded from access and parking from 07h00 to 10h00 and 14h00 to 16h00, and most of those parking use paid parking. Most fuelling stations and transport companies within Gauteng city centres prefer night-deliveries in order to reduce traffic congestion during the day. However, these activities are limited (e.g., night-time noise levels may increase since it is quiet at night); transport has to cooperate with land use policies as set out in Municipal Acts and, in particular, with the need to adjust the time window frame within which delivery activity can be performed. An interesting example of nighttime liquid fuels deliveries within Gauteng Province are the cities of Johannesburg and Pretoria. Here the filling stations and supermarkets receive their deliveries during the night (between 22h00 to midnight) without the use of appropriate vehicles to reduce noise (trucks produce large uncontrolled noise). Night time deliveries trial measures were implemented in the cities of Pretoria and

Johannesburg and that then gave rise to a follow-up programme that each municipality must complete. Great interest in time-window frames was shown in cities like Cape Town and Durban.

4.2.1 Time-frame regulations

Time-frame regulations are divided into two classes. Some Gauteng cities find it a very good strategy to reduce the number of trucks during normal working hours. Others argue that truck and delivery noise is too high at night and night-time deliveries should be banned. Delivery time-frame windows are very much dependent on the receiving times of the fuelling stations while local habits and cultural differences lead to acceptance or disapproval of night-time deliveries. Rossi and Comi (2010) have addressed regulations based on time-frame windows. They reviewed the state of practice in Dutch cities. The study provided an assessment of possible changes to current policy. Delivery time-frame windows seek to avoid interference with car traffic during peak-hours and to avoid interference with pedestrian traffic within city centres. In this case, prohibitions apply in early hours of the morning. In most cases, a hybrid form of delivery time-frame windows with charging may also be applied within city centres: in certain hours liquid fuels freight transport is free of charge, in the remaining hours there is a paid-for permit required to load and collect. Taniguchi (2004) identifies the main attributes of urban freight as follows:  Frequent delivery of smaller activities – Gauteng cities experience massive traffic congestion due to a high number of deliveries during peak-hours.

 Low utilization of capacity trucks – huge trucks or vehicles are used to deliver small goods. For example: a situation where an 8 tonne truck from Joshua Doore warehouse in VanderBijlPark delivers only a fridge in Morkels within the city centre whereby, a small vehicle could have been used.

 Time windows: for instance, following municipality and bylaw enforcement, most cities have restricted times for deliveries especially for dangerous goods and abnormal loads. Most of those products are delivered during the off-peak period (18h00 – 06h00) where demand is not high.

 On-street parking: according to municipal bylaw enforcement, most Gauteng cities have restricted parking spots. However, there are some areas that do not allow parking 72

between 16h00 – 18h00. In the city of Johannesburg for instance, in recent years much was designed and planned focusing on passenger transport, this makes it difficult for heavy duty vehicles to off-load or load any goods within the city centre because there is no space or off-loading zone for such vehicles.

4.2.2 Types of transport

This is often the practice of companies such as Engen petroleum distribution, where a truck will leave the distribution centre with three to four deliveries for one trip; the trailer has four to six compartments within the available truck and trailer combinations. Extra carrying capacity can be gained either by lengthening the trailer or by increasing its height while complying with national road traffic Act. Transport as fundamental to logistics, and it is important that it be utilized effectively and efficiently. This involves understanding the different types of transport that are available and using them to achieve delivery requirements. In Gauteng province, there is a huge demand for rail services that potentially can offer better speeds and lower costs of liquid fuels freight distribution. In all Gauteng cities, the freight forwarders do not use rail transport for their domestic transport any more and have road transport as the only reliable alternative since it delivers from point to point instead of rail, which delivers from terminal to terminal.

Chart Title

Series 1 Series 2 Series 3

14 12 10 8 6 4 2 0 Category 1 Category 2 Category 3 Category 4

Figure 4.1 Growth of traffic flows

The growth of traffic flows as illustrated in figure 4.1 above is a major concern and a huge problem within all Gauteng province’s cities and it is expected to increase in future , hence lack of traffic control infrastructure capacity is a common challenge, which presents a huge problems to both freight and passenger transport within Gauteng city centres. Typically (as per National Road Traffic act, No. 3 of 1996), if a load weighs in excess of 36 tonnes (as illustrated in figure 4.2 and 4.3 below) then it qualifies as a truck load, whether or not the trailer is full. The pictures below represent different specific vehicles designed to transport dangerous liquid fuels freight goods within Gauteng province. Figure 4.4 and 4.5 represents a visible pipeline transport (picture taken in Alrode liquid fuels terminal, Gauteng province).

Figure 4.2 Type of truck

Figure 4.3 Type of truck

Figure 4.4 Pipeline

4.2.3 Regulations and legislation

Liquid fuels freight vehicle activities in fuelling station areas within city centres are often construed as being core-goods related where vehicles are supplying liquid fuels to retailers for customers to purchase for example Engen fuels distribution supplying fuels to all Gauteng Engen fuels garages. The state - in all its forms - tends to police and regulate the movement of liquid fuels freight. Until after year 2005, the South African pipeline transport was regulated by the Department of Minerals and Energy while the Department of Transport regulated the policy. These two were later reconfigured and currently the national energy regulator (NERSA) is the regulator. South African legislation relative to construction, operation and maintenance of petroleum and gas pipelines are:  National key points Act (Act no.102 of 1980)

 Gas act, 2001 (act no.48 of 2001)

 Petroleum pipeline act,2003 (Act 58 of2003)

 National regulator Act,2004 (Act no.40 of 2004)

(Transnet, 2011)

The current acts relating to operations and maintenance of all local, metropolitan and national roads in Gauteng province are:  National road Traffic Act, 1996.  The National Land Transport Transits Act no. 20, 2009 now commonly known as National Land Transport Act 2009 The administration and enforcement of these acts are shared and divided among many government departments as well as state agencies for example the law enforcement departments, local municipality departments and agencies (e.g. Johannesburg road agency), the provincial and national departments of transport and agencies (e.g. South African national road agency Limited –SANRAL) and Transnet. This study's field research investigations have revealed that it is very difficult to deliver a liquid fuels freight load during the day in city centres within Gauteng province. This might be caused by both traffic congestion and by law enforcement (National Road Traffic Act, 1996). Further the study reveals that in most Gauteng cities, there are limited parking bays for trucks, and then in most major streets, trucks of more than nine tonnes are prohibited from driving (by law). This is due to damage caused to roads (figure 4.7) or the increase of traffic congestion. This prohibition adds to the difficulty to deliver liquid fuels freight in city fuelling stations during the daytime. The issues of turning and reversing are also major problems, and ultimately consumers within city centres suffer.

Figure 4.5 Road damage

4.3 Logistics services providers

In Gauteng province several transport offer their services as logistics services providers for companies who wish to outsource this function. These include companies such as African Cement, PPC cement, Shell, BP and others. Those logistics service providers do not sell products; they merely provide a service, namely delivery of what’s has already been sold by the company. According to NBCRFI (2011), there were more than 800 000 transportation and warehousing firms in South Africa with revenue of almost R350 billion. Since the 1980s, many logistics companies have participated in the growing trend to outsource logistics to third parties service providers. This includes among others, food chains, furniture brands, drinks, construction companies, liquid fuels and so on. Strategic partnerships and alliances have developed which resulted in reduced operational costs and improved service level agreements to supply chain members and their customers. Many Gauteng food chains and liquid fuels freight firms have their goods and fuels distributed by contract third part transport companies, many of which are strategic partners and use warehouses managed by third parties e.g. Pick n Pay products are distributed by Unitrans Supply Chain Solutions, whereas Woolworths chain products are distributed by Imperial logistics.

4.4 Distribution of liquid fuels

Several strategic partnerships exist in Gauteng. Unitrans Fuel and Chemicals and Imperial logistics distribute shell and BP fuels. Sasol and Caltex are distributed by Reef Tankers and Engen by Barlow World Logistics. In South Africa the guidelines for the preparation of an integrated transport logistics service was drafted on 23 April 1997. Up to date the documents merely reflect what has been achieved so far. The guidelines need further development, as they are not yet fit for purpose. The former minister of transport, the Honourable Jeff Radebe came proposed the strategy “National Freight Logistics Strategy” to guide the freight industry in South Africa. Although it is recognised that there will be a problem for the immediate future, there is still no freight-planning department dedicated to freight issues. This has a serious impact on the future of the freight industry within both Gauteng province and South Africa as whole. Liquid fuels companies, have two primary drivers of profit, which are time and costs. A full truckload (by volume) always results in a lower cost per unit than a smaller truckload (by volume). In general, the application of freight billing is built on the principle of the higher the weight, the lower the cost per unit principle. This principle derives from transport 78

companies' efficiencies obtained from larger loads. Transportation of dangerous goods is a very precise process and a lengthy subject matter, not covered by this study. It is a subject a future researcher might consider. To conclude the study case we illustrate here some examples of what a complete haz-mat package looks like as illustrated in figure 4.7.

Figure 4.6: examples of Hazchem packages

4.4.1 SADOT and SANRAL involvement

SADOT in 1999 indicated that South Africa will spend R22 billion over the following seven years on upgrading and expanding roads within its busiest province - Gauteng At the time of writing this project is almost over, and millions of motorists are required to pay for that road’s usage (E-TOLL). The South African Road Agency (SANRAL) has identified traffic congestion in certain areas as an effect in the productivity in the work place. SANRAL has worked with the Gauteng provincial government and all its three municipalities, Johannesburg, Ekurhuleni and Tshwane to optimise movement of liquid fuels freight within the province. The figure 4.1 illustrates increases in traffic flow that causes traffic congestion. Traffic congestion affects productivity and freight movement; consequently, this leads to profit loss and reduces product on-time deliveries. In Gauteng, all product producers are affected by the negative features of product specialisation due to the availability of different types of transport to distribute liquid fuels freight. The only means of transport not available in this province is water transport. Certain liquid fuels companies use online ordering systems that are connected to their

customers around Gauteng province. This facilitates clients placing an order and paying on time (Engen, 2012).

In Gauteng province, information technology plays a significant role in the distribution of liquid fuels freight. Many liquid fuels companies provide a computer system (i.e. an online order processing system used in distribution) that can handle a large volume of data quickly and accurately, providing continuously updated - or real time - information which can be made available to authorised personnel in distant locations, such as headquarters, offices, factories, transport depot and retail outlets. The various specialists involved in providing these services can monitor the movement and storage of goods along the entire distribution chain. The information is a reliable guide to day-to-day decisions. The freight system in S.A - especially in Gauteng province - is fraught with inefficiencies at system level. There are infrastructure shortfalls and mismatches; the institutional structure of the freight sector is inappropriate, and there is a lack of integrated planning. Information gaps and asymmetries abound; the skills base is deficient and the regulatory frameworks are incapable of resolving problems in the industries (SADOT, 1999).

4.4.2 Poor planning

The SADOT (1999) document, has further noted that distribution centres are owned privately and are away from transport interchanges, which makes it difficult for integration into the road transport system. This applies especially when future expansion is being considered. The current lack of integrated planning, particularly in spatial development planning and design, results in the facilities being developed in such a manner that they contribute to congestion and costs, including the costs faced by workers travelling to and from such facilities although they make sense at the firm level. This area of work, because it is fragmented and localised, demands micro level analysis with specific optimisation approaches. SADOT (1999) has reported that the policymakers are very concerned about the inflows and the outflows of commerce freight at South African cargo hubs. There appears to be a serious issue with flows and recent studies carried out by the department of transport have found that liquid fuels freight facilities in urban areas - especially in Gauteng's cities - are seriously affected by traffic bottlenecks and problems when vehicles attempt to access freight facilities. One of the reasons for this is that roads that provide access are usually in poor condition and their design is flawed; they are generally not

designed to meet horse and trailer requirements. There are inadequate radii at points of intersection, low clearances and limited shoulder width within most of Gauteng cities roads. The researcher concluded that these roads in general serve very heavy traffic and that their poor condition leads to problems in liquid fuels freight movement.

The Gauteng liquid fuels freight system is highly dependent on these intermodal connectors (especially in Alrode and Langlaagte) because they provide the critical link between modes (road, rail and pipeline transport) and they ensure seamless distribution of liquid fuels freight to consumers. They are vital components of the Gauteng province transportation network and facilitate the movement of liquid fuels. South Africa is fortunate in having very large coal reserves. These have sheltered us to some extent when oil prices are high. Cooper (2007) has noted that the period of low energy prices is rapidly ending, as surplus capacity is whittled away in the electricity sector and new capacity will need to be erected very urgently to meet the growing demand. This new capacity will have to be purchased overseas with the depreciating rand. This will mean that far higher capital costs will need to be recovered from an increase in the price of electricity. An issue which has been apparent in the local economy over the past four to five years has been a rapidly increasing demand for oil products and more specifically, for diesel. The price of diesel has significantly increased continuously since 2000. Much of this demand has been caused by the move towards diesel-fuelled private motor vehicles, which are more efficient than similar sized petrol engine vehicles. SADOT has even suggested that SANRAL can recover the money it invested in improving the major national roads in Gauteng; the funding could be recovered by adjusting fuel charges to the individual user. However, some (of the demand for diesel) must also be a result of increasing economic activity, utilizing large diesel powered vehicles to move goods. Road transport is being used at the expense of rail, especially on the major routes between the port of Durban and the Gauteng economic heartland of South Africa (MPFDB, 2007). South Africa, and especially Gauteng Province, is now at the point where some critical decisions regarding special energy and transport planning is required. A review of options, preferably using a holistic approach to ensure sustainable development, is suggested.

The summary below concludes the case study discussion on pipeline transport storage to distribution.

4.3 Storage facility network system (Alrode, Langlaagte, Tarlton and Waltloo)

4.3.1 Inbound Systems (products into storage facility)

Each liquid fuels storage facility amongst the four facilities found in Gauteng province has the capacity to receive 4 different products (ULP93.ULP95, Diesel 50 and Diesel 500ppm) handled through the Transnet pipeline network system at a rate of about 10 000 lines per minute per delivery. Pipeline transport is the only type of transport distributing very large volumes of liquid fuels freight into the Gauteng depots/ terminals.

4.3.2 The storage system (inventory management)

The liquid fuel facilities can accommodate fuel capacity volume as indicated below Product type Capacity per m³ ULP 93 17 378 ULP 95 11 040 DIESEL 4 065 DIESEL 6 853

Figure 4.7: The liquid fuel tank capacity for different kind of product

4.3.3 The dispatch system (dispatching product out of the storage facility)

The liquid fuel storage facilities (depot) consist of five loading bays all designed with loading arms as indicated below ULP 93 ULP 95 DIESEL 500 DIESEL 50 BAY 1 Yes Yes Yes Yes BAY 2 Yes Yes Yes Yes BAY 3 Yes Yes Yes Yes BAY 4 Yes Yes Yes Yes BAY 5 Yes Yes Yes Yes

Figure 4.8: loading bays equipped with loading arms

The following graph shows how a liquid fuels storage facility capacity is utilised on a day-today basis. This is based on a recent demand period and loading an average of 40 000 litres/vehicles. The average time to load a vehicle is thirty minutes (i.e. the turnaround time at the storage facility). The gantry operates 6 days a week, 22 hours per day. Figure 4.11 is an example of the Alrode liquid fuels facility monthly product flow.

Alrode monthly throughput 128500 128000 127500 127000 126500 126000 125500 125000 124500 124000 123500 123000 1-Jul 1-Aug 1-Sep 1-Oct 1-Nov 1-Dec

Series 1

Figure 4.9: liquid fuel facility monthly product flows

4.3.4 Allocation of unplanned fuel capacity

4.3.4.1 The first come, first served principle is always practiced at each liquid fuels facility

The liquid fuels companies consider applications to accommodate a first come first serve principle. This mean that all applications from a third party transport logistics company that comply to all requirements as stipulated by liquid fuels company policy will be approved, if there is still uncommitted available capacity to store the extra products, the service will be offered.

4.3.4.2 Use the product or lose it principle is always applied

In order to ensure that the facility capacity is optimised and properly monitored, liquid fuels companies have implemented a monitoring system to ensure that tenants utilise capacity as set out in the agreement. A tenant that defaults on this agreement by failing to utilise its share of allocated capacity will forfeit it to a qualifying applicant whose requirement may not have been met due to capacity unavailability or late application.

4.4 Compliance with applicable laws and regulations

A third party transport company with a license must always be in compliance with all set laws and policies applicable to the distribution and handling of liquid fuels freight, including, but not limited to:  South African Revenue Services (SARS) (for cross border liquid fuels),  Department of Energy (DEOM),  NERSA and  Department of Trade and Industry (DTI) requirements (cross border). The third party transport logistics companies must at all times adhere to site HSEQ rules, - which are treated as high priority items as shown in this study's data analysis - since the transportation of liquid fuels freight is regarded as the transportation of dangerous goods.

4 .5 Application and planning period

All third party transport logistics companies are required to form part of a six-month rolling plan and therefore will need to present its requirements in advance in order to get enough time to be reviewed and approved. The following liquid fuels distribution planning process is required:  M-6: indication of transport company requirements and replenishment plan  M-3: Indicative receiving and dispatching plans  M-1: Firm receipt dispatch plans for months M. The third party transport company must supply this information to the liquid fuels storage facilities' supply chain planning management before 20th month M, so management may collate these into a daily stock rights progression and feasibility report before the licenses are granted. The site liquid fuels storage operator is responsible for communicating twelve months' maintenance schedules that may influence capacity to all tenants. In cases of unplanned interruption (breakdowns), the operator must communicate with all tenants immediately with proposed alternative options.

4.6 Custody of liquid fuels products in storage

The liquid fuels companies are the owners of the product, therefore they control and manage stock at the storage facility; there is a high risk that liquid fuels products can become contaminated or even stolen when the product passes the inlet valve at the storage facility. For this reason, a competent official must always operate the inlet valve. The volume of liquid fuels product received at the storage facility is measured by mass flow meters at the storage facility. Dispatched liquid fuels products at the storage facility are also measured by the flow meters at the gantry. The liquid fuels storage facility operator reports on the host’s product movement and stock balances on a monthly basis.

4.7 Tariff charged at the liquid fuels storage facility

Liquid fuels companies submitted the tariff to NERSA in January 2014. NERSA approved the tariff in September 2014. NERSA is the only agent of the Department of Energy who regulates pipeline transport within the Gauteng provinces; they set and determine the tariff.

4.8 Technical requirements for liquid fuels storage facility accessibility

Third party transport logistics, transport contractor’s, owners delivering and or loading liquid fuels product from a liquid fuels storage facility have to first pass a SQAS assessment. This is a standard safety requirement and all are required to comply. This safety process is meant to ensure all fleet/ transport operators have transport management systems in place and adherence is monitored. The SQAS questionnaire covers the following area of management policy (regarding SHERQ) training:  Recruitment  SHE procedures  Safety equipment  Emergency response  Customer response  Operational instruction  Security  Risk Management  Occupational Health and safety  Preventative Protection  Site Facilities

4.9 Assessment process

In general, the SQAS assessment processes consist of the following steps:  Initial SQAS Assessment;  Evaluation of assessment documentation;  Report (including improvement program) to service provider;  A service provider will obtain approval status if at least 90% is achieved during the audit;  Provisional status given between 60% and 89.9%;  In progress, service provider not yet at 60% level;

To achieve approval status can take up-to two years. The senior transport advisor can spend between 8 and 10 days with a service provider to achieve approval status.  Re-audits are done every two years and can take up to 2-3 days per audit by the senior transport advisor  A full SQAS audit is done every four years, which can consume op to 4/5 days per audit

4.10 Vehicle vetting process

Individual vehicles for transporters (3rd and 4th party logistics transport companies) that meet the SQAS requirement are assessed according to the below checklist. Vehicles that meet the loading requirements and are in good condition to load are then issued with a "safe loading pass" (SLP) slip that is valid for a period of twelve months. No third part logistics Transport Company may load liquid fuels products from a storage facility without a safe loading pass. The SLP is issued per unit per set of horse and trailer combination. All applied rules and regulations as requested or prescribed by the South African National Department of Transport, NRTR, Gauteng Provincial Road Traffic Act, 10 of 1997, NRTA1996, PrDPDG and NBCRFLI are covered on the sub contract checklist below.

Table 4.1 Vehicle vetting checklist adapted from source (Sasol: 2015)

Liquid Fuels freight Distribution Storage Facility VEHICLE/DRIVER SAFETY CHECKLIST ROAD TRANSPORT TANKERS/ISOTAINERS/FLATBEDS SECTION A: THE DRIVER Driver PDPD valid Y N Not applicable

ID document/Passport Do driver have valid Y N N/A ID/Passport Do the driver have Y N Not applicable Relevant PrDPG Is the driver medical Y N Not applicable certificate valid (Check expiry date)? Is operator Hazchem Y N Not applicable training/Product certificate valid (check expiry date)?

Is Certificate of Y N Not applicable cleanliness issued or Proof of previous load where applicable (multi-loads only)? Is the driver in correct Y N Not applicable P.P.E.? Are delivery Y N Not applicable documents / load numbers valid? Was Breathalyser Y N Not applicable conducted, what are the results? SECTION B: THE VEHICLE COMBINATION Is the trailer / tanker Y N Not applicable clean and no visible leaks? Is the truck clean no Y N Not applicable oil/water leaks? Is the vehicle Y N Not applicable combination Roadworthy? Certificate valid (COF) Operators disc valid Y N Not applicable Fire extinguishers: Hazardous products: a 1 x 9 kg must be on each vehicle before loading Non-hazardous products: 1 x 9 kg for truck tractor Extinguisher must be Y N Not applicable scaled and have a valid calibration date stamped (SABS1398) Are vehicle Y N Not applicable combination Mudguards and mud flaps valid Tyres condition should comply with the legislation (thread at least 4mm over 100% of contact surface, no deep cuts, no lump or bulge. Fabric or cord not exposed). Did tyre thread depth Y N Not applicable gauge used? Appropriate Hazchem Y N Not applicable labels for hazardous products valid (multi- loads only)? An orange warning Y N Not applicable diamond on truck tractor (SABS0231) when transporting dangerous goods valid? 88

Is battery cover in Y N Not applicable place? General items required by the Road Traffic Act Reflective tape Y N Not applicable Lights and indicators Y N Not applicable Rear chevron board Y N Not applicable Fuel tank secure and Y N Not applicable undamaged

SECTION C: EQUIPMENT FOR FLAT BEDS Are corner plates Y N Not applicable available? Are net or canvas Y N Not applicable available? Are straps Y N Not applicable available? SECTION D: ACTIONS BEFORE DISPATCH Checked for leaks Y N Not applicable done? Hazchem and other Y N Not applicable Relevant stickers are in place? Check for correct Y N Not applicable emergency numbers. Operator card: number on truck? Specialist: 0800 112 890 Y N Not applicable Check G.M.V. not Y N Not applicable exceeding weigh as indicated on loading instruction. Compare seal Y N Not applicable numbers on invoices against seals INSPECTED BY NAME C/NO DATE TIME SIGNATURE DRIVER NAME

The following chapter discusses this study's research results.

Chapter 5: Research results and discussion

5.1 INTRODUCTION

5.1.1 Basic Information

This chapter presents the results of this study. The first section represents the results through cross analysis of qualitative research and incorporates face-to-face interviews and research questionnaire interviews. The second and third section describes the basic information in general adopted from the analysis of each variable through descriptive statistics. This case study has focused mainly on the evolution of differences in SQ; therefore, it can be classified as empirical research (Van der Velde Jansen and Anderson, 2004). The use of a survey questionnaire was identified by the researcher. It was used as the most suitable instrument of measure to collect this case study data (Mouton, 2005; Welman and Kruger, 2001). Welman and Kruger (2001) clarified the characteristics of various instruments used to measure and highlighted the use of a survey questionnaire in order to obtain a variety of information including biographical particulars, opinions and beliefs and convictions about any issue or topic, as well as the attitudes of respondents towards a specific topic or situation. The questionnaire was distributed as a self-administered questionnaire (Babbie and Mouton, 2001). Those questionnaires were designed and approved after several consultations with STATKON at the University of Johannesburg (Dr. Burger). The survey kit (How to sample in survey) by Ariana Fink was also used to survey this research study questionnaire.

5.1.2 Demographic Data

For centuries, men have dominated work in the transport industry. In recent years, we have seen dramatic changes as females become more and more involved (Grutter, 2010). Many liquid fuels distribution companies have empowered woman especially in management and fleet operator positions. Gathering information from various people of various races, genders and nationalities is not an easy subject, as the study deals with different people with different mind-sets.

5.2 Demographic data of research respondents

5.2.1 Age

One-hundred and eighty six respondents participated in this case study. As in figure 5.1 below, it is clear that a large proportion of Gauteng’s liquid fuels role players (regulators, government and agencies, liquid fuels companies and transport/ logistics companies) have an age between 40-49 years and the lowest employment sector being between the age of 60 plus. Youth between the ages of 18-29 years are entering the industry with a more academic background. The study has proved that a middle-aged group as illustrated below generally guides the liquid fuels industry. Seventy-five per cent of the below statistics were achieved based on the research questionnaire survey, and 25% via personal interviews. Most people were reluctant to reveal their age; this may have been due to fear of being judged. Some of the middle age group people were very aggressive; therefore, a research questionnaire was the only solution to receive this important information.

Figure 5.1 Ages

5.2.2 Gender

A total of 108 males and 78 females participated in this research data collection. It is clear and apparent that men still dominate the numbers. Gauteng liquid fuels' employed (including regulators, government and agencies, liquid fuels companies and transport/ logistics companies). Most liquid fuels transport companies have BEE level five statuses, which significantly see women being empowered in this industry. The NBCRFI has more female to male employees.

Figure 5.2 Gender

5.2.3 Highest level of academic qualifications

Most people within the liquid fuels industry and its role players have matric certificates. For some positions, it is a prerequisite to possess a matric certificate. A recent study has shown that the majority of qualifications in the field of transport and logistics are obtained through the University of Johannesburg (including certificates, diplomas and degrees). The number of qualified personnel drops as the level of education increases (from NQF level 5 to 10). Qualifications are usually obtained because of company policy and most companies pay for their students' fees. The larger transport companies such as Barloworld, Unitrans and Imperial Logistics send close to 65 employees annually to the University of Johannesburg to study transport and logistics qualifications. In those companies, 34% of employees possess higher certificates or diplomas within the liquid fuels distribution industry. The proportion of masters 92

and doctoral qualifications are only 7% to 11%. Employees in possession of Bachelor degrees constitute 28%, almost the same as employees in position of Honours degrees.

Figure 5.3 levels of academic qualifications.

5.2.4 Level of employment

A total of 11 departmental heads were interviewed (mostly from public sectors; Department of Transport, members of the mayoral committees, national energy regulator, Transnet, Department of Community Safety, the National Bargaining Council (NBC) , the off-road freight industry and liquid fuels companies within Gauteng province { Sasol, Shell, BP, Engen and Total}). Twenty-five directors/deputies/assistants/managers from the public sector participated in this research data gathering, some by personal interview and others via research questionnaires. A total of sixty-nine transport managers from private liquid fuels distribution companies participated in this research data collection via research questionnaire data gathering and personal interviews. Fifty-three transport supervisors consisting of briefing and debriefing clerks, operations clerks, dispatch clerks/ supervisors, distribution controllers and fleet controllers participated in this research. Twenty-nine truck drivers (NBC bargained) mostly from liquid fuels companies were interviewed in person.

Figure 5.4 level of employment in the industry

5.3 SECTION B: LIQUID FUELS DISTRIBUTION PROCESS

Liquid fuels distribution is built up of four fundamental stages that include Planning, Routing, Scheduling and Distribution, and bound by many rules and regulations (NRTA, 1996; Rail Regulations and pipeline Regulations) with regard to national government policy requirements, therefore, different stakeholders from different fields have been interviewed in person and via research data-gathering methods. PLANNING (KIN) How does the role of liquid fuels distribution in Gauteng province by means of Road, Rail or Pipeline transport affect your organization? As illustrated in the figure below it is clear that about 86% of participants in this study are involved in the distribution of fuels liquids distribution within Gauteng province and only 14% were on average or below average.

Figure 5.5 Effect to organization

5.3.1 Iintensity of competition

The competition for liquid fuels distribution within Gauteng province is very high at 46% amongst road, rail and pipeline transport. Each mode of transport has its own advantages and disadvantages, the study has proved that road transport still dominates due to its accessibility from point to point instead of rail which moves from terminal to terminal. Pipeline transport is currently designed to feed the storage facilities not the end user.

Figure 5.6 Intensity of competition

5.3.2 Competition amongst liquid fuels distributors

Competition is very strong at 95% amongst third party and fourth party logistics companies within Gauteng province. Giant logistics companies’ like Barloworld, Imperial and Unitrans compete for the same clients. The firm that has good presentations and maintains a good client corporate identity image usually wins the contract.

Figure 5.7 Competition amongst liquid fuels distributors

5.3.3 Strength of organizations (OHSA)

Since the distribution of liquid fuels is considered as distribution of dangerous goods NRTA, 1996) safety becomes a number one priority. There is no compromise when it comes to safety in the distribution of liquid fuels within the Gauteng province; therefore, the strength of safety is very high as demonstrated in the figure below.

Figure 5.8 Strength of organizations

5.3.4 Liquid fuels output will likely to be supported by organisations?

Decision-making, market positioning, load secure planning, safety planning, operational planning and strategic planning are the occupations most supported by liquid fuels distributors and all stakeholders involved.

Figure 5.9 Support by organizations

5.3.5 The most common liquid fuels distribution skills

Strategic thinking, knowledge of PPE usage, knowledge of OHSA, legal operating documents and computer skills are shown in this study to be the skills required in the distribution of liquid fuels within Gauteng province as illustrated in the figure below.

Figure 5.10 Skills

5.4 COLLECTION AND GATHERING

The question was asked: "Which of the following primary and secondary sources of information does your organization use to assess the competitive environment?"

As demonstrated in the figure below, the primary and secondary sources of information used by most liquid fuels distribution companies or stakeholders involved are discussion groups, information on regulator, industry analyst report, promotional materials, new group, conference information, market research and exhibitions/ road shows.

Figure 5.11 Collection and gathering

5.5 ANALYSIS

5.5. ANALYTICAL TECHNIQUES

Which of the following analytical techniques are used within your company to analyse the internal and external competitive environment? Most of liquid fuel distribution companies and stakeholders involved use the following analytical techniques to analyse the internal, competitive and external environment: patent analysis, blind spot analysis, Boston group growth share portfolio matrix, competitor profiling, customer segmentation analyses, customer value analysis and macro environmental (STEEP) analysis.

Figure 5.12 Analytical techniques

5.6 DISSEMINATION

5.6.1 Methods used to present competitors funding

Which of the following methods does your organisation currently use to distribute and present competitors' funding? Most liquid fuels distribution companies and stakeholders involved us the following methods to present competitor findings: briefing, competitor benchmark, intranet, phone and presentation/face-to-face, printed newsletter and reports.

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Figure 5.13 Competitors funding presentations

5.7 SECTION C

This section explores the thinking and perception about the role, capability, national position and competition of liquid fuels distribution by means of road, pipeline and rail transport within the Gauteng province. Participants were asked to rate the following attributes or characteristics using the following criteria: 0: Not applicable 1: very low 2: low 3: Medium 4: High 5: Very high

The study showed that the following characteristics of the three modes of transport - rail, road and pipeline - are taken in to consideration when it comes to choose certain modes of transport in the liquid fuels distribution process. They are on-time delivery, reliability of a particular mode of transport, safety and security, total logistics costs (variable and fixed costs), corporate identity, environment and accessibility. Accessibility has been proven the most important characteristic considered when it comes to choosing a particular mode of transport in the distribution of liquid fuels within Gauteng province as demonstrated in the figure below.

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Figure 5.14 Accessibility

5.8 CONCLUSION

Referring to road transport, this study was mainly focused on the distribution of liquid fuels freight within Gauteng province, therefore this study’s target participants were, amongst others, operations dispatchers, distribution supervisors, managers, operations managers and managing directors preferably of the five largest logistics companies found within Gauteng province. Personal interviews with drivers and crews were carried out during onsite dispatch and delivery times at several fuelling stations within Gauteng province. The drivers highlighted that they face lots of problems daily due to enforcement of by-laws which prevents them from doing their daily task properly especially within city centres during peak or rush hours. Appointments with senior managers of those top five logistics companies were set and all goals achieved. The senior managers were very cooperative and requested a copy of the final study. Permission to interview and distribute questionnaires to junior stuff was granted without hesitation. The fact that the research is in the transport and logistics field played a pivotal role in getting easy access to the top five logistics company premises. As not all employees were competent to complete the questionnaires, the researcher and his team assisted by reading each sentence.

Some of the drivers were interviewed. Questionnaires were distributed at liquid fuels storage facilities in Langlaagte, Waltloo, Alrode and Tarlton. The response was within acceptable

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parameters and added high value to this study. Pipelines transport only transport liquid fuels freight to networked distribution facilities (Langlaagte, Alrode, Tarlton, Boksburg, Waltloo, and Laipasvlei) within Gauteng province by means of pipeline transport. These fuels are, at a later stage, distributed to different fuelling stations by means of road and rail transport that requires a specific design of trucks and trailers or wagons. Those trucks and trailers have to comply with the Road Safety Act as covered in the National Road Traffic Act 1996. The driver must be in full personal protective equipment (PPE) and must be accompanied by code EC driver’s license as well as a valid Professional Drivers Permit and Professional Dangerous Goods Drivers Permit. Those documents must have been issued two years prior to an appointment in the fuels and chemicals industry (NRTA, 1996). Personal interviews were carried out and conducted with employees of several liquid fuels companies within Gauteng Province. It was a huge challenge to get all information as subordinates were bound by codes of conduct to limit any information provided. Fortunately, the focus of this study was not directed at revenue, so the researchers managed to garner all the relevant information. There was a huge challenge in meeting with senior managers, who always directed queries to junior managers. In that case, an approach to techniques used was changed. Email addresses of those senior managers where obtained and all questions including questionnaires, were sent and returned in a reasonable period. Transnet field, operation and depot managers in both Langlaagte and Tarlton facilities were very helpful and cooperative.

Appointments were set and all information required was obtained. After a notable lack of cooperation from personnel at various facilities, the researcher took the decision to approach the provincial head office of the Department of Transport where questions were answered. Many documents were provided to the researcher that added huge value towards the conclusion of this study. An interview was set up with the NERSA operations manager; his input added great value to this study. His team of junior managers completed the research questionnaire in reasonable time. It was a huge challenge to approach various key areas but eventually several documents were given to the researcher that added value to this study.

At NBCRFI – a personal interview was conducted with two senior commissioners; they cooperated and gave positive feedback. The NBCRFI’s duty is to make sure that all companies conform to a fair code of conduct. NBCRFI do not get involved in the day-to-day operations of industries. They work hand in hand with Unions. It is noted that all top five liquid fuels

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companies and their associated third party logistics companies' junior employees are unionized. Their concern was that in recent years they received several cases where employers had fired employees due to not complying with code of conduct when it comes to PPE usage. The onus is in the hands of the employees to make sure that they wear those PPE for their safety. The other challenge they face is that they cannot communicate with employees directly as that is the responsibility of the unions. According to NBCRFI, most of Gauteng liquid fuels distribution companies’ employees are NBC bargained, whereby males are allowed to take retirement between the age of 58 and 60 and woman between the ages 50 to 55. As per demographic data results above out of six liquid fuels distribution companies interviewed, 25% were women and 75% men. The case study research techniques listed below have been identified and used during data gathering on urban liquid fuels freight movement within Gauteng province and these techniques were applied in this case study (Browne,2007)  Interviews with liquid fuels freight and logistics transport company managers  General face to face interviews with government stakeholders and the regulatory body/ agents  Interviews with NBCRFI  Interviews with truck drivers and petrol service stations  Group discussions / brainstorming(including discussions with truck drivers, representatives from a supply chain companies, representatives from different transport and logistics companies)  Questionnaires sent to liquid fuels freight transport and logistics company managers  Accompanied the driver during delivery of products to several fuelling stations  Perform Parking and loading activity surveys during action  Traffic count ( manual and automatic)  Parking and loading infrastructure and inventory survey  Urban freight transport modelling

Much of this case study research and date collection took place within Gauteng liquid fuels freight operations territories in a wide range of sectors that are transport and logistics related to liquid fuels freight than focusing on specific sectors. Sectors that had received much attention included, amongst others, liquid fuels companies, liquid fuels distribution companies, the Department of Transport, mayoral committees, the National Bargaining Council for Road Freight Industry including trade unions, the National Energy Regulator, the Gauteng

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Department of Community Safety and Transnet where personal interviews, emails and research questionnaire were distributed. Some responses were negative, some positive (as explained above). If one technique was not working, a second option was used (proposed personal interviews changed to email or telephone). The complete liquid fuels freight transport aspect gives interesting insights on how liquid fuels freight transport is regarded compared with other transport types within Gauteng province (passenger and freight comparison). One hundred and eight-six-in-depth interviews / research questionnaires were conducted during the data collection process, completed with information collected during the preceding self-assessment. The actors interviewed were the Gauteng province local and provincial authority representatives (head of departments, decision makers), haulers and logistics provider companies, trade organizations, Department of transport and agencies involved (Transnet, NERSA); liquid fuels companies (Shell, Sasol, Total, and Caltex) and Gauteng Department of Community Safety. The researcher with the help of two University of Johannesburg junior students conducted interviews.

The interviews were designed to be semi-structured and included some questions about liquid fuels companies and liquid fuels freight distribution companies, provincial and local government authority representatives, the National Bargaining Council of Road Freight Industry including trade unions, Transnet and the National Energy regulatory of South Africa; based on drivers, impacts, problems, plans, and policies. Some additional questions were asked on personal interviews and in other cases, it was not possible for all actors to respond to questions by themselves, as they feared victimization. The face to face interviews, together with the peer reviews assessments represent a qualitative research vie of Gauteng province liquid fuels freight distribution challenges and possibilities for the local authority to start considering and taking into account the importance of initiating integrated liquid fuels freight distribution planning within Gauteng (Browne, 2007). To further develop and confirm the identical lack of integrated urban freight planning and development, knowledge and awareness of Gauteng liquid fuels freight transport issues, a survey research questionnaire was performed simultaneously with research interviews within the Gauteng province in order to gather appropriate and relevant information/ data. The final response rate was 85%. Liquid fuels freight transportation is considered to be in greater demand in larger cities like Johannesburg and Pretoria; higher than the national average, yet few spend more than 60% of their lifetime at work (Browne, 2007).

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Proper integration, planning of traffic flow and freight transport issues between government departments and private sectors as well as the involvement of liquid fuels urban stakeholders and actors is one important step towards better prerequisites for a sustainable, reliable, efficient, and effective liquid fuels freight transport industry. Regarding strategies for urban liquid fuels freight transport, currently it seems considerations such as safety, noise and attractiveness affects Gauteng areas. Improvements for walking, cycling and accessibility are important factors in determining planning procedures and strategies. Sixty five per cent of these case study research respondents consider liquid fuels freight distribution to be a problem area within Gauteng province especially in city centres. When asked to specify the problems, traffic disruption, noise and safety are by far the most frequent occurring problem areas. Twenty six per cent of these case study research respondents do consider that there are major barriers affecting liquid fuels transportation within the Gauteng province. The main issue is considered economic. A basic requirement was the need to work with liquid fuels freight transportation if it is to be aware of the problem areas. In this matter, the statistics regarding liquid fuels freight transportation in Gauteng province are important. Only 30% of Gauteng cities have any type of statistic available regarding liquid fuels freight transportation. Finally, it was interesting to note that 75% of these case study research respondents had a logistics/ transport qualification. Logistics is a broad, far-reaching function that has a major impact on society's economic and social standard of living, in modern society. We have come to expect excellent logistics and transportation services and tend to notice logistics only when there is a problem or transportation issues. (Grant, Lambert, Stock and Ellram, 2006). The following chapter includes recommendations and concludes this research dissertation.

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CHAPTER 6: RECOMMENDATIONS AND CONCLUSIONS

6.1.1 Research findings discussion

It is apparent that the distribution of liquid fuels freight within Gauteng province involves many stakeholders and participants. The case study research questions, aims and objectives have been met and answered, as are general problems such as the way industry participants interact with locations, how the physical liquid fuels freight industry is interwoven with informational structures and to what degree liquid fuels storage/ terminals are linked to the social systems inherent in liquid fuels production? (Hollingsworth and Boyer, 1997). Each respective liquid fuels stakeholder plays a huge significant role in the distribution of liquid fuels freight. Each stakeholder is discussed in detail in the following sub-headings; these cover the study's main objectives that are:  To review the current conditions of freight and logistics of liquid fuels and the importance of transport in Gauteng;  To investigate the agents involved in logistics and freight movement of liquid fuels in a selected case study;  To evaluate how the agent interacts throughout the process of freight movement for liquid fuels in a selected case study;  To develop a framework for improving efficiency of the logistics and freight movement of liquid fuels for the selected case study in Gauteng. This study makes the following recommendations:

6.1.1.1 Regulation for increased ROI

Findings from the study found that NERSA was the only agency operated by professionals. Its vision is clear and easy to adopt. This agent of the Department of Energy is a competently run energy agent and consists of efficient field researchers. They conduct a diversity of pilot studies on the ground. This study recommends that NERSA should effectively regulate the industry for increased Return on Investment (ROI). NERSA needs to ensure good use of assets, mainly through its mandate to issue construction licenses, for example if an entity wants to build another pipeline on the same route as an existing one. NERSA is well positioned as a role as a regulatory body since they are tasked with the regulation of tariffs and this study recommends that they need to make sure that sufficient return on investment is given to the investor such

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that there is a reasonable return on capital. NERSA as the regulator of the Transnet pipeline network calculates and defines the operational tariff. Findings from the study found that NERSA was free from political interference and was not associated with political scandals, which might well be a result of being run, by professionals and intellectuals. The study recommends the agency as an effective regulator as this make NERSA competent in overseeing investor finances. Their main duty in the distribution of liquid fuels freight within Gauteng province is to regulate the Transnet owned pipeline transport (they set up operational tariffs). The current operational status is regarded as one of the best.

6.2 Construction of pipelines to Gauteng’s fuel stations

Findings from the study found that the Pipeline Freight Logistics Company was the owner of all liquid fuels pipeline transport within Gauteng province. They are state owned. The pipeline transport map showed that pipelines ran from the refinery facility in Durban, into four storage facilities within the Gauteng province, which were, Langlaagte – which fed Laipasvlei storage - Tarleton, Alrode, and Waltloo. The four facilities supplied fuels to all the service stations within the Gauteng province and wider afield. The budget for these operations were with Transnet, who determined whether they wished to construct or expand this mode of transport. The Pipeline Freight Logistics Company was the owner and maintainer of all liquid fuels pipeline transport within Gauteng province. Professionals who possess different engineering degrees run its facilities. Given that their main role is to provide pipeline transport and not a product, this study recommends that NERSA should consider constructing pipelines to fuelling stations. This could minimize the risk of running which tends to result in unwanted negative economic impact. This could also serve as a backup when road freight industries are on strike. Findings from the study found that for many years, Gauteng province had experienced fuel shortages in fuelling service stations due to road freight industry strikes. This study recommends that NERSA needs to gradually commit budget allocations for the construction of pipelines that would effectively transport liquid fuels facilities to fuelling service stations in the immediate future because of strict budget limitations.

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6.2.1 Guidelines for pipeline transport

It is clear that this type of transport only transports liquid fuels freight to networked liquid fuels distribution facilities (Langlaagte, Alrode, Tarleton, Waltloo and Laipasvlei). After delivery to the liquid fuels, distribution facilities the fuels are distributed to different fuelling stations by means of road transport in specifically designed trucks and trailers). This study recommends that these trucks and trailers should comply with the Road Safety Act as covered in National Road Traffic Act 1996, the driver should be in full personal protective equipment (PPE) and they must have in their possession a code EC drivers licence as well as valid professional drivers permit and professional dangerous goods drivers permit. These documents must originally have been issued more than two years prior to driver being employed in the fuels and chemicals industry (NRTA, 1996) (NBCRFLI). This study recommends competition in the pipeline industry. The agreement between BP and Sasol on sharing and using the same liquid fuels storage facilities in Alrode and Waltloo has created a competitive environment within third party and forth party logistics companies and liquid fuels companies within the Gauteng province.

With the increased focus on climate change, Gauteng province can experience extreme weather conditions. This study recommends assessing the environmental benefits of pipelines fully. It is assumed that due to the use of electric energy, there will be little or no emissions from the use of freight pipelines given an increasing focus on using nuclear and renewable sources of electricity in the near future. In the context of this case study, it is interesting to note Egbunike and Potter (2011), who stated, “Policies are required to support the development of a range of low carbon and high efficiency technologies on an urgent time scale and greater international co-operation to accelerate technological innovations and diffusion which will reduce the cost of mitigation”. In the case of pipelines, the current state of technology at NERSA makes the latter point particularly relevant

6.2.2 Technological migration of the urban freight pipeline system

The findings from this research demonstrated the general lack of interest from policy makers (i.e. government officials) to migrate to new technology relevant to the urban freight pipeline system. Findings also showed that there was a major challenge due to the absence of the necessary political push for new technology and this was a stifling factor towards the implementation period. 109

This study recommends that parliament should promote energy agencies in the adoption of technologies that are viable alternatives to conventional types of transport where the possible use of the freight pipeline transport could be utilised as opposed to the more conventional type such as road transportation. The study recommends education that fosters a cultural shift in the perceptions towards innovation as the attitudes towards technology is vital to the optimization process that would follow. Agencies and relevant stakeholders need to be convinced that new technology in the urban freight pipeline system would not ultimately replace other forms of transport but would work in tandem with them to best optimise the transportation network within Gauteng province. Challenges confronting the technological migration process need to be confronted and not postponed. For example, one challenge is that there needs to be intermodal transfer with existing types of transport. This study recommends that corporation should ensure that automatic transport systems such as pipelines transport interface with other transport modes. The boundary for the design of such a system would eventually be required to comprise of this interface. The study found that efficiency and seamless transfer of liquid fuels freight at the interchange facilities or distribution centres as well as the increase in product handling instances were of concern. This study recommends some trade-offs or a balancing of priorities that could be applied to confront factors that may serve as potential barriers to the adoption of this technology. These trade-offs, according to Voss (2007) are a constant requirement by liquid fuels freight stakeholders when considering competing short and long- term priorities. These may include managing these multiple liquid fuels product handling instances and interchange facilities to the best possible level of efficiency so that as much traffic as possible can be taken off the roads to minimise the effect of environmental pollution. This study recommends that agencies need to ensure that these interchange facilities - or distribution centres - should not affect the just-in-time delivery windows for liquid fuels freight as this system is ideated to be in operation for close to 24 hour daily and operates at speeds in excess of current type of transport. The study noted that apart from cultural and attitudinal challenges to the adoption of technology, there was a need to recommend the establishment of a framework that would work to convince the industry with regards to resourcing especially because they are likely to be providing the majority of funding for such technological projects. This reflected ownership with current gas and liquid pipelines, where in the majority of circumstances, the operator owned the infrastructure. This study recommends education and frameworks for perceptual changes against the background of promoters that have argued that the benefits are

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not fully understood for example Miles and Loose (2008). Hogged and Roe (1998) have raised the challenge of stakeholders not fully perceiving the present issues that may arise in the future regarding Liquid fuels freight distribution. The number of drawbacks for urban freight pipeline technology within Gauteng province need to be overcome and technology can be adopted by navigating more widely on those challenges. Education can expand on how technology could leverage the significant risks that come with supporting new technologies that may damage current liquid fuels freight distribution image.

6.3 Comprehensive regulation of road transport

Findings from the study showed that road transport played a huge, significant role in the transportation/ distribution of liquid fuels freight within Gauteng. The advantage of road transport was that it was accessible and connected from point to point. Road transport was the only type of transport that currently distributed liquid fuels freight from storage facilities to end users (e.g. transport companies, service stations). Third and fourth party transport and logistics companies such as Grindrod logistics, Unitrans Fuel and Chemicals, Barloworld Logistics, Imperial Logistics, Reef Tankers and Fuel Logic are the main domain third party liquid fuels distribution companies within Gauteng province, all using road transport. They subcontracted to the liquid fuels companies including Shell, BP, Engen, Sasol, Caltex, and Total. Most of lower level workers (supervisors, drivers and general workers) of these transport and logistics companies were employed under the auspices of the National Bargain Council of the Road Freight Industry of South Africa (NBCRIFSA) and fell under CEPPAWU union. Given the congestion on the roads, the study found that road transport was marred with hazards. Horse and trailer/trucks and bulk trailers are regulated by the Department of Transport under the National Road Transport Act 1996. This study recommends that the regulator needs to ensure that there is no overloading on these vehicles, as it becomes a huge risk for other road users and present an opportunity to damaging existing roads structures. This study also recommends that weighbridges systems in transport companies’ storage facilities need to be adequately maintained such that the accurate weight figures are reflected. Most of the liquid fuels transport companies complained that the public weighbridges (that are controlled by DoT) delay the delivery of the products. This study recommends that Road Traffic Official need to be resolved in diverting overloaded vehicles from their direct route in order to pass through weighbridges as precaution from potential roads hazards. Transport companies that try to dodge or avoid weighbridges need to be fined in accordance with the law to deter danger on the roads.

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This study also recommends the use of on the spot weighbridge inspections and gives examples of where they have worked. As per press release on the 21st. of October 2014, a Gauteng provincial member of the executive council for Roads and Transport, Mr Ismail Vadi, had conducted spot inspections at weighbridges in Meyerton and Bapsfontein (Ekurhuleni). This as part of the province’s law enforcement campaign in the wake of the horror crash on the N12 in which four people died and 48 cars damaged. Vadi stated that almost 25 per cent of trucks inspected were found to be overloaded and several had mechanical defects. Of the 25 trucks tested at the Meyerton weighbridge in the first two hours, eleven were issued with fines for overloading; two trucks had tyres that were in poor condition, and two drivers were not in possession of the necessary clearance certificates. In one instance, the truck had no number plates and no permit to transport heavy goods. In Bapsfontein, of the first 48 trucks inspected, ten were overloaded and Gauteng Traffic Police issued three warning notices to drivers. The inspections showed that in spite of the horrific crash that took place on the N12 two years ago, truck operators continue to overload their vehicles and place un-roadworthy trucks on the road. This study recommends the stepping up of weighbridge inspections in the Gauteng province and penalties and law enforcement measures on drivers and operators must be implemented. The drivers and operators must be warned in advance as a deterrent measure. This study recommends that the provincial department of roads and transport should effectively re-activate weighbridges that are not functional together with the large number of weighbridges in Gauteng, which today are not operational given that hundreds of trucks pass through them daily.

6.3.1 Safety and security

This study recommends that the industry allocate more cargo to the pipelines. As they are underground, pipelines offer an improvement in the safety of people and the security of liquid fuels freight. Findings from the study found that road freight crime was an on-going problem which was estimated to cost the South African economy R250 million a year. This figure included hijacking and stock theft by unreliable truck drivers and truck assistants (Egbunike and Potter, 2011). This of course, has an effect on suppliers and, to a lesser extent, end-users all of whom would encourage any type of transportation that reduces the risk of theft. From a safety perspective, the number of accidents involving road freight vehicles has decreased

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within Gauteng province; 10 700 HGVs and 14 600 vans carrying goods were involved in road accidents between 2012-6(Egbunike and Potter 2011).

The study recommends that it is very important to enforce the requirement under the code of conduct - for all employees to wear their PPE (Personal Protective Equipment) whilst working to avoid unnecessary injuries at work. The study recommends that where an employee does not adhere to the policy corrective actions should be taken against them by their line managers. The study found that the Department of Roads and Transport regulates all roads within the Gauteng province through its three spheres of government i.e. the provincial Department of Community safety, National Traffic Police and several municipalities within Gauteng province (Tshwane municipality, Ekurhuleni municipality, Johannesburg municipality, Mogale City municipality, Randfontein municipality, and Midvaal municipality). They controlled and oversaw 33 weighbridges within Gauteng province. The study recommends the enforcement of the special driver’s licence for drivers of special vehicles that are regulated by the Act (PrDPG) to ensure that competent drivers are safely in charge of vehicles on the roads. This is because the findings from the study found that the distribution of liquid fuels freight by the use of road transport is regarded as dangerous goods movement. The study recommends the implementation of specific laid down time frame limit for dangerous goods/ liquid fuels freight delivery within Gauteng province to ensure safety on the roads. Several interviews with drivers and their crew from the study were carried out by the researcher during onsite delivery at fuelling stations. They face lots of challenges daily due to municipal enforcement of laws that are always not on their side, and poor urban infrastructure which makes it difficult for them to do their work properly (i.e. delivery within city centres and fuelling stations near major busy roads).

6.3.2 Political will at Gauteng’s Department of Roads and Public Transport

This study found that Gauteng’s department of roads and public transport had failed the freight industry within the province for years. This dates back to 1994. This study recommends that Gauteng’s Department of Roads should commit more towards logistics and liquid fuels freight transportation in their infrastructure development plans. Focus had historically been mainly on passengers and individual vehicles. Study manuals on urban or general transport geography,

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have more recently raised more freight related questions than they did in earlier editions (Hanson, 1995); (Taaffe et al., 1996); (Hoyle and Knowles, 1998); (Moving South Africa, 2010). This is particularly with regard to trade, terminals and ports of freight within Gauteng province. The problem goes back to early 1996 when the former minister of transport Honourable Mac Maharaj introduced a transport white paper policy. The "1996 White Paper on National Transport Policy" supported investment in transport infrastructure to encourage public transport and discourage the excessive use of private transport but states nothing when it comes to freight distribution. This study recommends the implementation of the strategic objectives of this policy document which are to improve accessibility and mobility, empower and assist disadvantaged operations to participate and ensure that operations are economically viable with minimum financial support from the government - especially in Gauteng province. This study also recommends that freight be encompassed in this document’s implementation and focus must be expanded deeper from the initial mandate on public passenger transport. In 1997 another document produced by the National Department of Transport called Guidelines for the Preparation of an Integrated Transport plan 1997 (DoT 2014) was produced, and most recommendations were not acted upon. This study recommends that official commit to implementing the recommendations therein.

The focus in this document should be amended to comprehensively target issues related to freight transport. In 1999, SADOT produced another document with nothing of importance regarding freight movement. It was called: "South African National Freight Logistics Strategy, 1999". In 2010 the DoT produced a document called "Moving South Africa, Highlighting Vision for 2020 Transport Improvements" – which also failed the freight industry. The study recommends that Gauteng’s Department of Road and Transport draw from previous input and merge it with Gauteng’s 25-year Integrated Transport Master Plan 2013, and the support of Guidelines for Law Enforcement in Respect of the Overloading of Goods Vehicles, February 2004 (as prescribed by the National Overloading Control Technical Committee) under the leadership of MEC Vadi. The question that remains with us; “is 25 years not too long for transport development?” The study recommends that Gauteng’s Department of Road and Transport be open to a short-term plan that could be easily managed, implemented and monitored. Those in charge within the relevant departments should then meet their responsibilities and resolve the reality of the deteriorating status of the freight industry within Gauteng province. This study also recommends consistency and continuity in political

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commitment towards long-term plans. Findings from the study showed that as a minister left office, he or she left with his/her initiatives and new administrators came with new initiatives. This is detrimental to continuity. This study recommends that leaders at Gauteng’s Department of Road and Transport confront patronage through political deployment as it is a debilitating practice. People with the relevant educational and knowledge background should not be ignored when they have the relevant competencies and academic qualifications to work at the department.

6.3.2.1 The role of law enforcement

This study recommends the efficient implementation of guidelines for law Enforcement in Respect of the Overloading of Goods Vehicles, February 2004; as prescribed by the National Overloading Control Technical Committee (NOCTC) needs to be implemented. This document was published in 2004 but nothing much has progressed in the freight industry. The Road Traffic Act, 1996 (Act No. 93 of 1996) and the road Traffic Regulations approved in terms of this Act prescribe the maximum mass limits of freight vehicles used on public roads. The Act also determines the powers of traffic officers regarding the enforcement of the mass limits. This document is a hope for the future of the road freight industry, but interest in the implementation of this published document is dwindling. It contains proposed guidelines for law enforcement officials to be followed when enforcing legislation with regarded to the loading of freight vehicles. The aim is to ensure that overloading control will occur in a uniform manner throughout Gauteng province. A standard approach provides clarity and certainty to everyone concerned with the loading and control of freight vehicles. It is indispensable for good order in the freight transport industry. Overloaded freight vehicles do considerable damage to the country’s road infrastructure. The damage is estimated annually to be R600 million (1997 rand value) (DoT, 2004). Money is not freely available from central government to repair the road damage as well as for the construction new roads. If the damage is not prevented, the road system in the country will gradually deteriorate to the detriment of everyone, and this will affect all road users. The main aim of overloading control is to control or ease the damaging of roads caused by overloaded vehicle and avoiding unnecessary accidents that can take the lives of innocent citizens. This study therefore recommends that it is essential that constant effective law enforcement be carried out throughout South Africa in order to stop this economic sabotage and protect one of the country’s most valuable assets – its road network.

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Findings from the study showed that transport or logistics companies that overload their vehicles can transport more freight at the same cost and can consequently charge lower prices per ton or per box of transported freight but the risk remains of serious accidents and loss of life. In this way, the over-loaders benefit at the expense of the companies that do not contravene the law. The result is that law-abiding companies are forced either to overload their vehicles as well, or to close down their businesses due to market pressures. The study therefore recommends that law enforcement should control freight overloading in order to protect law- abiding transport companies against the unjustified advantages obtained by non-law abiding companies and to prevent the transport and logistics industry from collapsing into total anarchy. An overloaded vehicle is unsafe and is more likely to be involved in serious accidents at any given time. The aim of overloading control is therefore also to ensure that safety regulations are not contravened. This study recommends that legislation for road safety be implemented. The study also recommends that more campaigns and road shows be done and all stakeholders’ need to be active. The law states that the transport company owner (or proxy) of any vehicle can be charged if found not to be complying with the law. The truck driver of an overloaded vehicle or truck is also charged as the law-breaker since it is his/her responsibility to refuse to drive such vehicle. If the driver is convicted, he will have to face a fine or jail sentence for an offence that has benefited the owner of the transport or logistics company and not the driver. Admissions of guilt and previous offences traffic and fine tickets for admission of guilty are registered against the driver and not against the company that owns or operates the vehicle. The below question was raised in the Parliament of South Africa (Cape Town) by a member of parliament to the Minister of Transport:  Has she investigated the need for a weighbridge to stop overloaded vehicles entering the towns of Parys and Vredefort from the direction of Johannesburg?  What other mitigating factors has her department investigated to alleviate the burden on the roads of (a) these and (b) other small towns countrywide that carry additional traffic as result of toll roads and toll fees? The Minister has answered above questions as follows  Yes, National Overload Control Strategy (NOCS) was developed, in partnership with Provincial Departments, during 2004 to identify the need for weighbridges across the country, which includes the region near Parys and Vredefort.

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 The NOCS proposed two weighbridges, one on the R82 near Sasolburg and another on the R59 near VanderBijlPark. These weighbridges together with the existing scales in the Gauteng province act as the barrier to control overloading in that region of the country.  Traffic surveys are done by SANRAL ahead of any toll opening and again after the toll road has been opened. If these surveys indicate significant diversion of traffic then assistance is rendered to the local authority to increase the capacity/ structure of the affected roads/ routes. The Minister responded to the questions asked above, the Guidelines for Law Enforcement in Respect to the Overloading of Goods Vehicles, February 2004; as prescribed by the National Overloading Control Technical Committee (NOCTC) has been published. The study recommends that these two proposed weighbridges be built immediately to alleviate the consequences therein. This study recommends that when it comes to Gauteng province, the role of Johannesburg Road Agency (JRA) be comprehensive and be less selective. Authorities need to be accountable and responsible for road infrastructure within city centres. The study also recommends that new leadership is needed to come up with new strategies to turn around those key performance indicators.

6.4 Rail transport

The findings from the study found that the rail freight industry has been declining in the past 25 years. However, this study recommends the revamping and use of rail transport because it transports liquid fuels freight in relatively large quantities at low rates. Rail freight transport is owned and managed by Transnet freight rail in Gauteng province. Rail freight has been described as the biggest division of Transnet. The distribution of liquid fuels, especially jet fuel, diesel and paraffin from Durban to Gauteng province (Isando railway station) is done by rail transport. It competes with pipeline transport. When the cargo arrives in Gauteng, it is stored at Isando rail stations and distributed to various liquid fuels facilities at a later stage by means of road transport. O.R. Tambo international airport receives fuels from Isando station at their fuels depot after transport by train (approximately 4km).

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6.5 Internal vetting by transport companies

This study recommends that transport companies/ third and fourth party logistics should ensure that the right vehicle should be driven by a professional driver who has enough experience to do so. Findings from this study showed that fake documents (drivers licence and ID) had contributed too many recent heavy-duty truck accidents. This research recommends that transport companies should alleviate this by conducting strict internal vetting processes. The logistics companies needs to use effective screening methods verifying required driving documents. References need to be conducted during the recruitment process, refreshment; preventive and defensive driving technique courses need to be conducted regularly every three months (not six months as is currently happening). This study recommends that logistics and transport companies’ vehicles need to be regularly checked by a designated official from liquid fuels companies and transport companies in order to make sure that corporate image is maintained. The code of conduct as set out by NBCRFLI should always be practiced. Findings from the study showed that most horrific accidents on the roads within Gauteng province were caused by small, unregulated logistics and transport companies not complying with the NBCRFLI code of conduct (news24.com/SA2015). Fatigue seemed to be the other factor that contributes to these horrific accidents, usually resulting from correct labour law not being practiced. This study recommends that transport companies should commit ensure that drivers’ resting schedules are adhered so that alert personnel is always in control of vehicles on the road. A number of transport companies in Gauteng province are currently employing foreigners and this study recommends that foreign driving licences should be vetted through the regulator according to the law so as to avoid horrific accidents that emanate from inadequate driver’s training.

6.6 Department of Infrastructure Gauteng Province.

The Gauteng province 25-year Integrated Transport Planning document has seen the birth of taxi re-capitalisation in 2004, the Bus Rapid Transits System in 2009 and the Gautrain project in 2010. Some of the roads in Johannesburg and Pretoria have already been erected with demarcation lanes, for cycling and walking. Nevertheless, when one considers the city centres, there has been less done for liquid fuels freight offloading zones. The Bus Rapid Transit system has demarcated roads in both Johannesburg, and Pretoria, whilst Ekurhuleni is also under 118

construction. Considering freight: All that is visible is an old L sign marked near supermarkets or clothing shops. Those off-loading zones are only designed for small delivery van vehicles and not for truck and trailer delivery. According to the Gauteng MEC for infrastructure's budget speech, South Africa's infrastructure project for pipeline transport will cost R4.7rn. Attention to the urban freight transport infrastructure has yet to be developed. The department of infrastructure should send field researchers to suggest possible solutions regarding offloading zones for trucks and trailers in the Gauteng inner city centres. These solutions could also reduce traffic congestion during peak hours. The planning and vision is there within the department but it becomes a question of the implementation date. A dedicated team of transport economists, transport engineers and town and regional planners has to be teamed up to come up with the proposed solution to solve this continuing urban freight parking problems. The victims are the truck drivers and truck operators who are constantly abused by law enforcement officers and taxi drivers within city centres.

6.7 Prioritization of dangerous goods vehicles

This study recommends that when it comes to weighbridge control, such vehicles should receive special treatment, since it is probably much more dangerous to let them travel on than to park them and to let the load be adjusted. Officers should use their discretion to ensure that the parking of a vehicle would not create a danger and seek professional advice. The RFA suggested the following in this regard: Safety should be a first consideration. If the vehicle is within the GVM – charge the driver and give him a fine but the vehicle should be allowed to carry on with its journey.

If the vehicle is within 16% of the permissible mass load the following should be considered:  Payment of fine on the spot  Demand from the transport owner to apply for an extraordinary (abnormal) load permit for the entire trip  The truck owner should be required to pay for an escorting function  The vehicle then proceeds to the nearest, safe designated decanting point

6.8 Liquids fuels freight

With regards to liquid fuels freight, this study recommends that:

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 Vehicles with liquid loads may be provisionally weighed (statically or dynamically) while the load is moving to determine whether they are probably overloaded.  Although the reading does not stabilize immediately because of the movement of the liquid, it may be determined with reasonable certainty whether the vehicle is overloaded.  If it is found that the vehicle is probably overloaded, the vehicle should be held back until the load stabilizes. Findings from the research found that the South African National Department of Transport publish draft regulations intended to curb road traffic accidents in South Africa – and almost 90% of South African citizens were not happy with the draft. This study recommends that a proper research and pilot study be conducted that would accompany a new draft. The department of transport should undertake a comprehensive campaign for the draft regulation, as the previous attempts were failure from the absence of vibrant, knowledgeable leadership within the Department of Transport. The drafted proposals includes amongst other: slower speed limits on all roads and no more children or passengers in a bakkie load bed. The department should amend the tenet of the draft that seeks restricting heavy trucks during peak hours on all roads as it is draconic. This study recommends that the department open the Bus Rapid Transit system in Gauteng’s major cities to include heavy trucks in the draft. Heavy trucks should be allowed to share demarcated bus lines with buses. This study recommends that efforts in the draft such as practical driving test when renewing a driving license be removed as they are a waste of public resources and disrupts the economy of the country. The study recommends focusing on lowering the speed limit instead. The National Transport Department spokesman, Ishmael Mnisi told Wheels24 news that the proposed legislation would have to be presented to his party’s Cabinet, but to date this has not happened (neither the discussion in parliament nor the public input). The department of transport is hoping to implement these regulations - which have already published in the Government Gazette - by the end of 2015.

These are the main changes: driver evaluation before renewing a license, no more than five adults in a bakkie load bed, no children to be carried in a bakkie load bed, speed limits cut – 60 to40km/h in towns, 100 to 80km/h on rural roads, and 120 to 100km/h on city freeways. Freight vehicles heavier than 9000kg GVM should be banned from roads during peak traffic hours. Persons with intellectual ability, vision and experience (including qualified transport

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economists and engineers) are needed to lead our National Transport Department (not 'comrades' or 'friends or the party faithful' as is happening now). Until then, we will continue to witness more casualties and horrific accidents on our roads. Lead time for delivery vehicles within city centers will also deteriorate if proper infrastructure within city centers is not in place or developed (Wheels24: 2015). South Africa as a whole has three spheres of government, namely national, provincial and metropolitan/district municipalities. This results in several challenges to the management of freight transport in the Gauteng province and the country as whole, particularly in city traffic law enforcement and the overloading control system where each level of government has a different role to play - i.e. National on a strategic level; provincial on a strategy implementation/ coordinating level and; metropolitan/district authorities on an operational level. It is important to note that the metropolitan traffic police have also formed the core of the recently established metropolitan police forces with wider responsibilities within Gauteng, and that there are infrastructure agencies such as the South African National Roads Agency Limited (SANRAL) and the Johannesburg Roads Agency (JRA) that also add value in smoothing out liquid fuels freight distribution.

Other role players include private sector companies such as the toll concessionaries, which have a vested interest in traffic law enforcement (especially overload control). On a political level, congestion management and traffic law enforcement are two major priority challenges in Gauteng as congestion on roads is choking economic growth and traffic law enforcement should address the severe overloading and the high death rate (DoT 2014). The solution to this problem may be to allow trucks and buses to share demarcated lines and the use of yellow lines during rush hour; the researcher has experimented on this exercise whilst commuting (between Johannesburg city centre to Pretoria city centre during rush hour on a truck as a passenger).

6.9 Competence in transport SOEs

This study recommends that state run enterprises such as Transnet should be led by professionals - not politicians especially its seven-year pipeline transport project. The study found that political involvement and interference has resulted in this project failing to meet many deadlines; this project must be left to professionals and its completion will see huge efficiencies in liquid fuels freight distribution within Gauteng province. The EPWP program was initiated by the Department of Roads and Public Works to maintain and construct access

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roads within Gauteng province, and this is an opportunity to increase labour utilisation. The Department of Transport is in charge of a complex and dynamic sector; it represents a major challenge for the several intergovernmental existing systems. The study recommends that the transport department should require that parastatals in all three spheres of government work together effectively and plan in a coordinated way for the delivery of an efficient integrated transport system that leads to the smooth delivery of liquid fuels freight within Gauteng city centres. The Gauteng Province MEC for finance in 2015 said Gauteng would allocate R38, 2 billion for the delivery of infrastructure over the period and R263, 4 million was set aside respectively for rehabilitating, building new roads, renovating, and constructing new health facilities (GSDC, 2015). This study recommends that this funding be effectively used for much needed renovation of transport networks.

6.10 Transport planning capacity This study recommends a transport-planning proposal that should consider the accessibility and mobility of society as a whole – i.e. at the micro level –both organisations and individuals to avoid an incident such as where the community of Rosebank were boycotting the Gautrain infrastructure. Proper consultation should be done with all affected parties. It is government’s responsibility to plan social, economic and physical transport improvements continuously within Gauteng province. This study recommends that this should be done to bring about change that would otherwise not happen and ease delivery pressures within city centres. It gives rise to conflict of interests over the allocation of scare resources – here it becomes political. Decisions relating to the allocation of limited resources for the implementation of transport policies and proposals mean that some people benefit from those decisions while others do not. Transport is a means to an end, without proper vehicles, cargos, good driver, supervisors, managers, directors, regulators, and well maintained facilities it cannot function efficiently.

6.11 Future recommendations

Joint operations amongst law enforcement agencies, the Departments of Infrastructure, Transport, Energy and the public in general must be encouraged to increase efficient, effective and public & private partnership initiatives for liquid fuels freight distribution within Gauteng province, particularly when considering overloading of vehicles, corruption, fraud and traffic control management. It is again important that existing transport infrastructures such as the

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BRT system demarcated lines as a transport development project be fully utilised before new facilities are considered, and consideration should be given to the upgrading of existing transport infrastructure. The accommodation of modern transport movement, transport intermodalism, should also be considered since reliability could spill over to different types of transport and this will speed up the overall product delivery process within Gauteng province. Urban development agencies, road transport agencies, NERSA and road, rail and pipeline transport of liquid fuels freight distribution companies should work together in order to smooth out the delivery of liquids fuels freight within Gauteng cities. However, it is very difficult to merge the three modes of transport to work together as different bodies whose services vary control them. The overall controlling body - which is the department of transport - should ensure that the three modes of transport are competing amongst themselves. Gauteng provincial department of transport and public works should change its focus in terms of transport development and infrastructure; much has been done for public transport infrastructure and now is the time for the freight transport industry to be considered and to be taken seriously. It is an economic generator for both Gauteng and South Africa. Proper freight road show campaigns should be conducted quarterly and transport economists, transport engineers, town planners and other stakeholders and actors should be consulted in order to smooth out the liquid fuels freight distribution within Gauteng province cities. South African petrochemical group Sasol Oil have merged with BP South Africa, disclosing that both companies are joint owners of the Alrode liquid fuels depot in Alberton and the Waltloo liquid fuels depot in Pretoria. South Africa’s Competition Commission has approved the merger agreement; Sasol and BP now have equal accessibility to those two depots that has been described as being of logistical benefit to both competing companies. Expectations are high over an anticipated improvement in those two giant petroleum companies’ access to their customers (Sasol, 2015). Before the deal was sealed, Sasol owned Alrode liquid fuels depot whilst BP owned Waltloo liquid fuels depot. Under the new partnership, Sasol petroleum and BP petroleum now each have 50% interest in each of the liquid fuels storage facilities. Liquid fuels facilities at the terminal include a storage tank farm, offices, petrol, diesel and additive storage tanks, road and rail gantries and a workshop. Both those liquid fuels depots and terminals have access to the Transnet pipeline. The merge will ensure safe and quick distribution of liquid fuels freight products to customers and will be beneficial to Transnet who intends to invest and erect a future pipeline infrastructure in order to deliver liquid fuels freight directly to service stations around or near storage facilities within Gauteng province.

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The development of this kind of pipeline infrastructure requires billions of rand to construct, but it is an impressive initiative in the liquid fuels industry in Gauteng province. It is hoped that in the near future we will witness other mergers within liquid fuels companies in Gauteng province. According to DoT (2014), the transport sector has agreed to implement a new system for classifying the road network that is expected to ensure it is planned and managed rationally and efficiently and will accommodate various types of transport. This could be the beginning of Gauteng transport intermodalism development. The proposed framework classifies roads according to the functions they perform and employs the appropriate authority to take full responsibility of those roads. Therefore, BRT demarcated lines can also be used as bus and trucks lines during rush hour. Some provincial roads will be included in the road network for which the national government is responsible. The DoT's (2014) study concludes that approximately 13 000 km of provincial roads have been thus identified, bringing the primary national road network up to a total of approximately 20 000 km.

The new classification will also ensure that unproclaim roads, which are mostly rural, are properly categorised within the rural road network and assigned to the appropriate authority for overseeing and maintenance. Recently the government has agreed that the public can hold the relevant deportment responsible for fixing roads and compensation (court of law case sanction 13/03/2017 Western Cape). Gauteng province is required to hand over its budget to various departments for transport infrastructures, operating subsidies and traffic regulation and safety in order for relevant agents to develop reliable and efficient liquid fuels freight distribution. Road expansion by national and provincial governments has, in recent years, increased significantly, rising from R3,7 billion in year 2000/01 to about R6,9 billion in year 2003/04 (DoT, 2014). This can be confirmed by referring to the Gauteng provincial development's Bus Rapid Transit system infrastructure in all Gauteng's major metro cities. Investment in roads, rail and pipeline transport development within Gauteng province should continue to be a government priority, as there is still a need to address backlogs in maintenance of existing structures and to improve access to rural development. By increasing investment in the transport system, the resulting development will offer a great opportunity for the distribution of liquid fuels freight within Gauteng province.

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The Gauteng Premier has mentioned the establishment of the Gauteng Infrastructure Coordination Commission, who will carry the responsibility for the coordination of infrastructure development and investment programmes across Gauteng cities and several regions. This might have come up at the right time, as transport infrastructure is in need of development within Gauteng province city centres. The government must use the integrated transport planning processes for land use and transportation planning within Gauteng city centres to develop easier and smoothed out product delivery. Integrated transport planning should be achieved through the proposals and planning guidelines of the following bodies: the Department of Transport (DoT), Committee of Land Transport Officials (COLTO), provincial department of transport and public works and provincial transportation co-ordination committees (TCCs).

6.12 Recommendations for future work

These case studies have used recent available data and information from interviews with the liquid fuels freight distribution industry, stakeholders and participants to assess the extent of barriers to entry, growth and expansion in liquid fuels freight distribution within Gauteng province. As described herein, there is a transport intermodal relationship and competition amongst the three main types of transport- (pipeline, rail, and road transport), where road plays a pivotal role because of its accessibility and reliability. Transnet – the owner of the pipeline transport - and NERSA – the regulator of the pipeline transport - (both agents of the state) have a meaningful impact and play a significant role in the distribution of liquid fuels freight within Gauteng province. Gauteng province's 25-year integrated transport master plan (2013) is a published document that is aimed to target the problems and issues of road freight transportation within Gauteng. It provides guidelines to a range of interested stakeholders on the best practices for analysing the province's freight distribution and issues and for initiating, designing and implementing transport integrated strategic planning to solve those issues (DoT, 2013). Best practice recommended by the researcher includes inter alia:  Reducing the noise emissions during off-peak deliveries (i.e. at night).  Consolidation of several consignments into one delivery.  Combining freight traffic with passenger traffic within Gauteng province to reduce the demand for transport (e.g. trucks using BRT lines during peak or rush hours, or trucks use yellow lines during rush hours); and  Proper integrated planning for land use and transport planning.

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(Source: DoT, 2013)

To drive the initiation and implementation of the ITMP25, thirteen elements have been approved to mutually supporting this strategic document. These elements are:  Land use development planning;  Subsidized housing provision within urban core areas;  Land use densification in support of freight transport planning;  Strategic public and freight transport network;  Mainstreaming non-motorized transport (NMT);  Reinforcing passenger rail network as the backbone of the freight movement system;  Extending the integrated rapid and road-based public and freight transport networks;  Freight transport challenges and issues;  Strengthening freight hubs, existing and developing new ones;  Proper road transport management;  Travel demand management planning, and  Continued provincial wide mobility for freight transport planning; The safety of liquid fuels freight transport and logistics companies during deliveries is another area that needs serious consideration, since truck hijacking has increased within Gauteng province. The researcher refers the matter of safety for liquid fuels freight distribution to an Irish study entitled '‘Contributions to the Safety and Efficiency of Horse and Trailer Operations." This identifies a number of issues and incompatible requirements that are affecting the safety and efficiency of the liquid fuels freight delivery operations in Ireland. Traffic levels within Gauteng province, transport policy measures within the province, ineffective regulation, customer demands, internal management and work processes are identified as major issues affecting the ability of the distribution of liquid fuels freight function safely and effectively within Gauteng province (DoT, 2014). The researcher recommends that the town and regional planners' work together with transport engineers and transport economists to solve the parking and traffic movement issues within Gauteng city centres.

Considering the Gauteng Local, Provincial and National Law Enforcement Agency – it has been reported that corruption within the law enforcement agency is out of control. Law enforcement officers issue delivery drivers with fines for obstructing traffic, the reality being there is no parking space designed for those specific vehicles, and the product needs to be 126

delivered in order to meet customer requirements. Those that are deployed to weighbridges accept bribes and let defaulting vehicles leave - which puts other road users (and the entire public) in danger. Those weighbridges must be controlled and supervised by senior law officers and the involvement of RTMA should be taken into consideration. Experienced and educated intellectuals should be deployed to supervise weighbridge facilities. All overloaded vehicles that exceed the permitted tolerance mass should be forbidden to travel further until the load has been adjusted to the permissible legal limit plus the permitted tolerance before a scale printout is issued and the vehicle is released. Although there are no exceptions to the abovementioned rule, cognisance should be taken of the Criminal Procedure Act, Act 51 and Section 30 of South Africa. Corruptions at Gauteng license traffic testing stations continues to be a looming issue, where driver’s licenses are issued to incompetent drivers. A random check need to be conducted regularly by RTMA to prevent such corruptions.

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APPENDIX

Questionnaires for the research Confidentiality: all information will be treated with confidentiality and will only be used for the purpose of this study.

PLEASE ANSWER THE FOLLOWING QUESTIONS BY CROSSING (x) THE RELEVANT BLOCK OR WRITING DOWN YOUR ANSWER IN THE PROVIDED SPACE.

SECTION A: Biographic or background information This first set of questionnaire refers to background or biographic information. Age (years) 18-29 30-39 40-49 50-59 60+

Gender MALE FEMALE

Please indicate your highest level of academic qualification Higher certificate National Diploma Degree Honours Degree Master’s Degree PhD

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Please indicate your level of employment in the industry Departmental Head

Director/Deputy/Assistant/Manager

Transport manager

Transport Supervisor

Truck Driver

Indicate the number of working experience you have been in the organisation 1-5 Years 5-10 Years 10-15 Years 15-20 Years 20+ Years

SECTION B: LIQUID FUELS DISTRIBUTION PROCESS

Liquid fuels distributions is built by four fundamental stages which include Planning, Routing, Scheduling and Distribution, and bound by many rules and regulations (NRTA, 1996, Rail regulations, and pipeline Regulations) with regard to national government policy requirements.

Planning (KIN) (please mark all the answers with an X) Please indicate how does the role of fuel liquids distribution in Gauteng province by means of Road, Rail or Pipeline transport affect your organisation?

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Above Average Average Below Average

How is the intensity of competition for liquid fuels distribution in the Gauteng province by means of Road, Rail, or Pipeline transport? Very Low Low Average High Very High

How has the competition amongst liquid fuels distribution companies being in the Gauteng province? Dominant Strong Favourable Tenable Weak Unviable

How is the strength of your organisation (OHSA) when it comes to the distribution of liquid fuels in the Gauteng province? Very Low

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Low Average High Very High

Which of the following liquid fuels distributions outputs will likely be supported by your organisation? Choose only six, Decision Making Strategic planning Operational planning Tactical planning Market positioning Qualitative decisions Quantitative decisions Business integration Load secure planning Safety planning

What are the most common liquid fuels a distribution skill does the distribution personnel process (name top 5)? Strategic thinking 141

Presentation Oral skills Knowledge of PPE usage Knowledge of OHSA Legal operating documents Computer skills Industry specific knowledge Thinking outside the box

2. Collection and Gathering 2.1 Which of the following primary and secondary sources of information does your organisation use to assess the competitive environment? MOSTLY AVERAGELY NEUTRAL LEAST NOT USED USED USED USED Discussion groups Electronic bulletin and notice boards Virtual libraries Cooperate website Information on regulatory bodies Customer demographics News group Research reports Exhibitions/Road shows/trade shows Trade journals Promotional material

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Cooperate Annual/Quarterly reports Industry analyst reports Survey summaries Market research reports Local newspapers Conference information Journalists Others (please state)

3. Analysis 3.1 Which of the following analytical techniques are used within your company to analyse the internal, competitive and external environment? NOT AT VERY SOMEWHAT GREAT VERY ALL LITTLE EXTENT GREAT Benchmarking (Best practices) Blind-spot analyses Boston consulting Group Growth/Share Portfolio matrix Competitor Profiling Customer Segmentation Analyses 143

Customer value analyses Experience curve analyses Financial Ratio and Statement Analyses Financial Analyses and valuation Functional capability and resource analyses GAP Analyses General Electric Business Screen Matrix Growth vector analyses Industry analyses Macro- environmental (STEEP) Analyses Management Profiling Patent Analyses Product Life Cycle S-Curve (Technology Life Cycle) Analyses Scenario Planning War gaming

4. Dissemination 144

4.1 Which of the following methods does your organisation currently use to distribute and present competitor findings? NOT AT VERY SOMEWHAT GREAT VERY ALL LITTLE EXTENT GREAT Email (directly to user) Internet Printed news letter Reports Presentations/face to face (e.g. periodic or scheduled)

Phone Competitor benchmarking Warning alerts Counter intelligence Briefings

SECTION C This section explores your thinking and perception about the role, capability, national position and competitions of liquid fuels by means of Road, Pipeline and Rail transport within Gauteng province. Please rate the following attributes or characteristics using the following criteria: 0: Not Applicable 1: Very Low 2: Low 3: Medium 4: High 5: Very High

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Characteristics of NOT VEY LOW MEDIUM HIGH VERY Road, Rail and APPLICABLE LOW HIGH Pipeline transport within the Gauteng Province On time delivery – has speed really affected by on time delivery of liquid fuels distribution within Gauteng city centres Reliability – has the consumer choice being determined by the reliability of a certain transport mode for liquid fuel distribution? Safety and security – has safety and security affected consumer choice for liquid fuel distribution? Total logistics costs – has the total logistics costs of shipment

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affected consumers choice CI – does corporate identity of certain modes affected consumers choice for liquid fuels distribution Storage capacity – has storage capacity for liquid fuels distribution affected consumers choice Environment – have environmental conditions determined modes choice in liquid fuel distributions Accessibility – have the appropriate terminal or points been accessible?

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