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 12 of a 12-part series.
As Holley envisions it, the private sector will play a key role in revitalising South Africa’s rail system. He believes the bulk freight sector offers the most immediate opportunities for private investment. There is a clear economic advantage to using rail for transporting bulk goods like coal, iron ore and manganese, as the cost of moving these commodities by rail is significantly lower than by truck. Holley sees this as a critical way to protect the country’s road infrastructure and increase volumes of rail freight.
However, as Holley mentions, private operators are still waiting for the government to resolve key issues related to slots and access. The network statement from Transnet, for instance, only offers one slot per week for each corridor, which is not enough to make operations feasible for private companies. The tempo of these slots, as Holley describes it, must be optimised so that trains can operate on a daily or more frequent schedule.
When will private trains operate on Transnet’s tracks?
As for when private operators will be able to run trains on the South African rail network, Holley is optimistic but cautious. He believes that the first private trains could be operating within this year, once the critical issues are resolved. The company is already engaging with customers to secure commitments for rail volumes, and Holley is confident that they have identified feasible rail flows for certain commodities.
However, Holley emphasises that a single private train operating on Transnet tracks would not be financially sustainable. The real opportunity lies in getting private sector investment into new trains and infrastructure, particularly for the bulk market. This could transform the way freight is moved in South Africa, boosting rail’s competitiveness against road transport.
Holley makes it clear that, before his company can make significant investments in rail, the issue of limited concessions and slots needs to be addressed. He explains that without access to an adequate number of slots—and without the ability to optimise those slots—private operators will not be able to operate efficiently. Moreover, transit times need to be streamlined so that operators can maximise train usage and profitability.
Holley is optimistic, though. He points out that South Africa’s rail freight body is massive. For instance, the Zambian and Tanzanian copper belt, which involves a significant amount of freight moved by road, represents a market of only 8 million tons annually. Meanwhile, the bulk trade market in South Africa alone represents an opportunity of about 50 million tons, illustrating the scale of the potential market.
Conclusion: a new era beckons for SA rail
Holley’s vision for South Africa’s rail system is optimistic. He sees a growing market for bulk freight and believes that private sector investment, once the regulatory and operational issues are addressed, could significantly boost the economy. The key to success, according to Holley, will be resolving slot allocation, maintenance and transit time issues—all of which will make rail a more competitive and reliable option for freight.
In the coming months, as the final pieces of the regulatory framework fall into place, Holley expects to see a transformation in the sector, one that will bring both immediate and long-term benefits to South Africa’s logistics industry.