By Eamonn Ryan, derived from the podcast
In a podcast hosted by Peter Bruce of FM, Jamie Holley, CEO of Traxion, shared insights into the challenges and opportunities in the South African rail logistics sector. This article explores the challenges and opportunities within South Africa’s rail system, offering insights that are highly relevant to the cold chain industry. This is Part 11 of a 12-part series.
The South African rail system is undergoing substantial reforms, and one of the key elements in this process is the National Rail Master Plan. This document, which is a critical part of the reform efforts, lays out the long-term vision for the rail network. It is being shaped by the Department of Transport, which is working on finalising two important pieces of legislation: the Master Plan and the Rail Transportation Bill. These aim to create a framework that will allow private operators to enter the market and transform the rail industry into a more competitive and efficient system.
Interestingly, the concept of third-party access—allowing private trains to run on the national rail network—was introduced by President Ramaphosa in October 2020, as part of the Economic Reconstruction and Recovery Plan after the COVID-19 pandemic. However, when Traxion sought legal advice about what changes were needed to facilitate this, the response was that nothing needed to change in terms of regulation or law. This realisation that the infrastructure was already in place for private operators to join the network, but had not been utilised, was a game-changer for Holley and others in the sector.
The slow pace of change and the role of maintenance
While the government has made strides in initiating the reform process, the changes have not come without challenges. Holley emphasises that, despite the slow pace, significant transformation has already taken place. The monopoly of Transnet has been in place for over a century, and dismantling it to allow competition involves substantial political, economic and regulatory shifts.
However, Holley also points out that a key issue, beyond policy, has been maintenance. Over the years, the South African rail system suffered from a lack of investment in maintenance, which ultimately led to a decline in the system’s performance. As Holley sees it, this decline paved the way for road freight to take over, filling the gap left by the rail system’s failings. But he’s confident that with the right reforms, customers who had previously moved their freight to trucks would be eager to return to rail once the system improves.
The role of trucks vs rail
Holley clarifies that the trucking industry isn’t to blame for rail’s decline, but rather the issue stems from rail’s own maintenance failures. He mentions that the Road Freight Association is actually in favour of increasing rail usage, as the current trucking environment isn’t sustainable. In fact, in many parts of the world, rail and road freight complement each other: rail handles the long-haul, bulk freight, while road freight deals with regional distribution and logistics. The two systems can work in tandem to form an efficient freight network.