Making Inter-state Transport Work in Africa


South African logistics is a huge lever which can improve regional performance, said Gauteng Roads and Transport MEC Dr Ismail Vadi at the inaugural Regional Connectivity Forum held in October. The Forum, a high-level event, comprised leaders from both the public and private sectors.

The one-day Regional Connectivity Forum provided a unique platform, where government and industry stakeholders shared thoughts and aligned strategies to achieve their respective objectives in improving regional connectivity. It was all about a fair and equitable discussion between the private and public sectors. In his opening address, Vadi said that intermodal transport was the most flexible and cost-efficient solution to boost connectivity in the SADC region, adding that intra-regional trade accounted for around only 16% of total regional trade value. “We are not tapping into our own markets in Africa,” said Vadi. “What can we do to change this and propel ourselves forward? If we can get the right kind of infrastructure and integration, we can achieve short-term growth. This is key.” Vadi emphasised that South Africa has significant capabilities – we have fairly modern systems in place. “The challenge is that there is disjuncture,” he said.

Although Sub-Saharan Africa ranked poorly as a performing region in terms of logistics, it had a high level of variability and heterogeneity among countries in terms of logistics performance and at intra-country level among different logistics and mobility ambits, signalling the existence of bottlenecks. The good news however was that, “heterogeneity indicates vast opportunities and room for intervention that could be unleashed by a common strategy, policy streamlining and aligned standards and regulations,” said Vadi. Infrastructure deployment was key – closing the infrastructure gap in the region would bring SADC countries an additional GDP growth of 2.6% per annum.

Major hindrances
Vadi said that, with a co-ordinated approach and collective efforts however, major hindrances could be solved. These included:

  • sub-optimal private investments in infrastructure in Sub-Saharan Africa. Investments into the SADC region accounted for only 2% of the world total in 2017, down by 36% in 2016 and by 67% in 2015.
  • poor level of integration and standardisation in rail. Currently, 80% of intra-SADC trade uses roads and trucks.
  • high transport and trading costs, which are higher than any other region in the world. This is partly due to the shortage of skills and competences in logistics and digital technology.

Logistics Excellence the Lever to Performance
South African logistics performs even better than OECD (Organisation for Economic Cooperation and Development) countries and the EU (European Union). The country’s strategic location at the core of major routes affirms itself as a key hub for local, regional and global trade flows. In addition, South Africa ranks 15th globally in terms of rail network extensions.

Private investment in transport infrastructure across world regions ($ billion) aggregate value 2008 – 2018

Opportunities for EU SADC Cooperation
Vadi highlighted several opportunities for cooperation between SADC and the EU, including:

  • Infrastructure projects in SADC countries provide opportunities for private players
  • Air transport could be a strategic area for co-operation boosting growth, productivity and jobs
  • Cross-country programmes for professional education, vocational training and upskilling
  • Small and medium enterprises (SMEs) in the rail sector, electrification, digital logistics, ports, intermodal hubs and services, engineering and construction and ICT (Information and Communication Technology)

Larger EU companies should act as trailblazers for European SMEs in these sectors. Vadi added that the SADC region is a potential growth point over the next decade. To achieve this however requires shared vision, political will and commitment of all stakeholders, provincially, nationally and region. Effective partnerships between government, industry, academia and communities are essential.

There are important opportunities for targeted investments in transport infrastructure, rail and freight and the logistics sectors.

Education, skills development and training however remain key, as is integrating ICT platforms in SADC region and developing new digital platforms.

“Governments in SADC are also seriously looking at improving rail connectivity and increase investment in rail network, rolling stock and systems,” he added.

Policy reform and compatibility across SADC region/ common operational procedures will also need to be developed.

Road networks need to be improved, and an inland port in Gauteng developed.

“To take advantage of these opportunities we need to be flexible and agile,” noted Vadi. “We also need to set targets and work towards them: if we don’t, we won’t make progress.”

World Bank Logistics Performance Index (relative score: 0 = poor, 5 = good), 2017 or latest available data

Barbara Mommen – MCLI
Partnerships are key to the success of regionally connectivity, said Barbara Mommen, Chief Executive Officer of the Maputo Development Corridor Logistics Initative (MCLI), a non profit organisation focused on the promotion and further development of the Maputo Development Corridor (MDC) as the region’s primary logistics transport route.

Sharing some of the successes of MCLI and the Corridor, Barbara said that key factors that had contributed to Connectivity were infrastructure and communication. Infrastructure included improved systems and an improved trade facilitation environment, as well as effective institutional arrangements which have delivered on stakeholder mandates. Regular engagement between stakeholders is key.

“Regional connectivity will not happen without infrastructure – soft (systems, processes, partnerships) and hard infrastructure,” she said.

Historical Throughput of the Maputo Corridor
Barbara highlighted some of the successes of the Maputo Port Development Company, since the commencement of the concession period:

  • Volume growth of 200%
  • Investment to date of more than US$735m
  • Dredging, sheds, slabs, roads, gates, IT systems and equipment, berths.
  • Dredging of the Channel -14.3m.
  • Dredging of berths allowing a move in reception from Handymax and Handy size vessels to Panamax, Pos Panamax and Cape Size Vessels.
  • Efficiency improvement of cargo handling rates with the acquisition of 2 x mobile harbour cranes (with two more to arrive in January 2019).
  • Human Capital development contributing to efficiency gains (crane moves per hour increased from 10 to 22).
Historical Throughput of the Maputo Corridor

In the years since its establishment, MCLI has encountered a number of challenges, including lack of political will, corruption and non-compliance, lack of implementation of agreements and disconnect between policy and implementation. “Regional integration is difficult when it is not aligned with national interests,” said Barbara.

She explains that regional connectivity can only be achieved through communication, transparency, accountability, as well as genuine, workable institutional partnerships between public and private sector. “Regional Connectivity demands vision and maturity and an enormous conceptual shift to look at things differently,” she concluded.

Tripartite Transport and Transit
Facilitation Programme (TTTFP)
Progress to date on the Tripartite Transport and Transit Facilitation Programme (TTTFP) were shared by Godwin Punungwe -TTTFP Transport Co-ordinator for SADC.

TTTFP was formed to facilitate the development of a more competitive, integrated and liberalised regional road transport market in the COMESA (Common Market for Eastern and Southern Africa), East African Community (EAC) and Southern African Development Community (SADC) regions.

Godwin said that the entire project hinges on the harmonisation and liberalisation of road transport. These include the signing of agreements, domesticating a range of laws, regulations and standards, developing and integrating transport information systems, as well as variable geometry.

The Programme had adopted a four-phase approach:

  • Stage 1: Establish Statutory Basis
  • Stage 2: Institutional Capacity and Development of Systems (eg, Operator, TRIPS, Interfaces)
  • Stage 3: Project Implementation of Systems
  • Stage 4: Execution in selected corridors, Monitoring, Evaluation and Roll-out Strategy

Cross-Border Initiatives
The newly-established Cross Border Road Transport Regulators Form (CBRT-RF) was established to address the region’s multitude of impediments facing cross-border road transport operators as they conduct operations between and across countries in SADC and the Tripartite. According to Sibulele Dyodo, Executive Manager of Stakeholder Relations at the Cross- Border Road Transport Agency, one of the key functions of the CBRT-RF is to support, promote and implement the development of SADC Guidelines on regulatory frameworks for inter-state road transport. The CBRT-RF comprises representatives from Zambia, Namibia, Mozambique, Malawi and Zimbabwe.

Establishment of a Private Sector Grouping in the ESA region
The establishment of a private sector grouping in the ESA (East South Africa) region would play an important role in bringing trade to our region, said Juanita Maree from the South African Association of Freight Forwarders. The WCO (World Customs Region) currently has 22 members

SMART Corridors are the Future
Trudie Nichols, a Partner at Bowmans, outlined some of the responses to the existing challenges of cross-border compliance, ranging from Continental, Triparite and REC level initiatives. “Neither Continental nor Regional agreements have been successful because they have not been implemented,” she said.

Focusing on the future of Cross-Border transport, Trudie said that success would be achieved by embracing the 4th Industrial Revolution: the Internet of Things, SMART Corridors, and a paperless supply chain. “SMART Corridors are focused on Safety, Mobility, Automation, and Real-Time Traffic Management,” she explained. “The advantages of SMART Corridors include saving transport time and costs, increasing safety and security, simplifying trade while enhancing competitiveness.”

Hubs and SEZs (Special Economic Zones), as well as Free Trade Areas in Africa, are critical success factors.

“Agile governance is what is needed to fully address our challenges,” said Trudie. “The impact of the 4th Industrial Revolution is exponential: It will have a huge impact, with things changing daily. Governments will therefore need to respond far quicker. This is about governments understanding this is a multi-stakeholder approach. They need to focus more on policy and less on regulations.”

Industry 4.0 and Cross-Border
Tracking and Tracing
There are a myriad of opportunities for Trade Corridors to benefit from the application of Industry 4.0 principles. These were highlighted by Alwyn Hoffman from North West University, who presented a number of success stories. “All industry 4.0 principles developed for the Manufacturing sector are equally applicable to Logistics Tracking and Tracing solutions,” explained Hoffman. “A good example of a practical application is a system that offers Trade Corridor Performance Benchmarking and Collaboration services.” Services could include Fuel, Cold Chain and Driver Management, Asset Utilisation, E-Marketplaces and Green Lanes.

“Commercial trade corridor stakeholders who use these services will simultaneously improve asset utilisation, reduce costs and delays and improve governance and compliance,” said Alwyn.

“Collaboration is key to the success of road transport operators, said Justin Blythe, CEO of Manline Energy, outlining some of the challenges trucking companies face cross-border. “We need a stable IT platform, we need harmonisation and we need standardisation of paperwork requirements,” he emphasised.

Doing cross-border trade and transport is high risk, with road freight operators encountering challenges both at the border posts and in country. Numerous challenges are experienced at border posts, including: poor networking functionality, systems not harmonised, human capacity constraints, lack of capacity of clearing agents, large cash requirements, queries and associated delays, as well as poor/limited parking and ablution facilities.

Once in a country, drivers encounter a different set of challenges in different countries: different road transport authorities with different rules and regulations, unscrupulous law enforcement, road infrastructure challenges, quality of fuel and fuel costs, high communications costs (data), limited technical support and limited medical support.

Big Data – Big Opportunities,
Big Challenges
Big data has a massive role to play in Regional Connectivity. The opportunities are limitless and the outlook exciting. “We are in the early days of realising the value of big data in the Transport sector,” said Johann Andersen, CEO of Techso. “Technology allows for on-time and accurate monitoring, diagnosis and evaluation. Currently there is very little leverage by government on sensing, communication and data technologies in freight transport.” The opportunities are there to create open data platforms and improve data exchange and to connect islands of technology. Data sharing however is key. Once again collaboration is vital: institutional collaboration and Public/private collaboration.

Johann highlighted initiatives around the world such as London’s Open Data, in which open data sets are available to developers to realise innovative Value Added Services (VAS) and gain insight from data that could have commercial benefits. Data is provided free of charge, according to Transport Data Terms & Conditions. At the end of 2017, there were 11 000 developers, 600 travel apps had been developed in the UK, and 42% of Londoners were using apps powered by this data feed.

According to Johann, Dubai has also recognised the power of open data. Citizens can now see how their tax dollars are spent. They can access government services more conveniently. Software developers can create new apps and online services for urban residents

In October 2017 the Dubai Data Law was passed, which requires all government departments to share their data with each other and with private sector organisations and city stakeholders. This allows for an integrated digital platform for data access. “It is vital however that there is a balance struck between making data available and maintaining data security,” Johann emphasises.

“We are moving from data poor to data rich. We are transitioning from being data averse to data hungry. Advances in sensors, telecommunications and the connected vehicle are driving a new wave of data. Many of the challenges have already been addressed outside of transport. We are entering a “results-driven” era in transport in which there is a need for quality decision information and the movement towards management of transport as a system,” concluded Johann.

Aviation and Regional Connectivity
Aviation connects African business to world markets and plays a critical role in facilitating and driving Regional Connectivity, said Bongiwe Pityi Vokwana General Manager, OR Tambo International Airport at Airports Company South Africa. Bongiwe outlined the Single African Air Transport Market (SAAMT), a grouping that was formed with the aim of ensuring intra-regional connectivity in Africa. Launched in January 2018, SAATM is a flagship project of the African Union and aims to create a single unified air transport market in Africa.

“South Africa’s geographical location can enhance its ability to develop a well-connected network, ie, the establishment of a hub by capturing both intra- and inter-regional trade,” said Bongiwe. She highlighted ACSA’s Airport Master Plan, key to which was integration with the surrounding transport network. “With global passenger travel expected to double by 2035, reaching 6 billion, we need to address the challenge of longer queues and waiting times for passengers at each step of their journey,” she explained. “The vision of the Fast Travel initiative is that, by 2020, 80% of global passengers will be offered a complete suite of self-service options. These include self bagdrops, self-boarding and Smart security”.

“Transport is usually regarded as responding to demand (derived demand) and this is in particular true with passenger transport,” said Gerard de Villers of the Chartered Institute of Logistics and Transport: South Africa (CILTSA), who facilitated the Forum. “However, in the case of freight transport, it could be said that transport is an inducer of development, as good accessibility and mobility surely contributes and encourages development. The link between transport, development and trade is clear and there is no doubt that the effective functioning of corridors or supply chains depends on good access and mobility to facilitate development and stimulate trade”.

Way Forward
“It is no longer companies that compete in today’s global markets, but supply chains,” said Freeman Masuku, Chief Director at the Gauteng Department of Roads and Transport. “If we don’t resolve the challenges, we won’t succeed. Our focus needs to be on reducing the cost of logistics. South Africa’s competitiveness is being eroded by other regions. Dialogue between the public and private sectors and collaboration is key to achieving true Regional Connectivity”.

About the Regional Connectivity Forum
Held in partnership with the Gauteng Freight Forum, representing the Gauteng Department of Transport and Roads, the government delegation was headed up by Freeman Masuku, Chief Director, Policy and Planning from the Gauteng Department of Roads and Transport. This interactive, high-level, boutique event is an initiative of FESARTA (the Federation of Eastern and Southern African Road Transport Associations), “Supply Chain Today”, CVLC Communication and was facilitated by logistics expert, Gerard de Villiers. These discussions were the closing highlight of Transport Month.