A nation's backbone

Monday, 07 April 2008 14:09

South Africa prides itself on its internationally recognised, highly sophisticated customs and laws associated with the transportation of goods – a feature of any vibrant economy.
In South Africa, as in many other countries, customs and excise duties are administered by SARS (South African Revenue Service).

The country applies the Harmonised System (HS) and forms with Botswana, Namibia, Lesotho and Swaziland the Southern African Customs Union (SACU). Products imported into South Africa can therefore circulate freely within these four countries.

On average, customs duties are 20%. In terms of the free-trade agreement signed with the European Union in October 1999, 86% of products imported from the EU should be exempt from customs duties by 2012.

About 33% of customs duties are calculated ad valorem, 3% are governed by simple specific rates (hundred / kg for example) and 23% are calculated with combined rates. The rest benefit at a rate of 0%.

Distribution

The chief zones of economic concentration are located in the main South African conglomerations: Gauteng, Cape Town, and Durban.

In order to distribute one’s production in South Africa, it is strongly recommended to use the services of a local agent. Such an intermediary can provide the exporting company with its own network along with invaluable administration and business contacts. However, more than anywhere else, the choice is tough. Good agents are rare and therefore very much sought after.

The contract between exporting company and agent can take various forms: commission basis, importer-distributor, importer-retailer (either general or representative of one or several foreign companies).

Agent commissions vary from 3 to 30 %, depending on the value and nature of the contract and the quality and reputation of the agent.

Transportation of goods

The authority in charge of maintaining and developing the South African motorway infrastructure is the National Roads Agency. It manages 360 000 km of roads, of which 150 000 km are tarred. The trend is to involve more and more private operators; for instance, the highway N4 connecting Johannesburg to Maputo is managed by the operator Bouygues via its Basil Read branch.

The country’s railway network is 33 400 km long. The public company Spoornet represents more than 80% of the South African railway infrastructure. The rail is particularly used in South Africa for goods transportation; it is notably very well connected to the mining sector. Since 1998, a special cable (Smart Cable) developed by Spoornet has enabled four locomotives (three electric and one diesel) to be linked, and creating real rolling convoys (up to 216 cars). This technique is mainly used for the transportation of iron ore on the Sishen-Saldanha line and makes it possible to transport up to 22 500 tons in one way.

South Africa has seven international ports: the two main ones, Cape Town and Durban, followed by Port Elisabeth and East London. In 1998, over 120 million tons of freight and some 14 000 vessels passed through South African ports. The lion’s share of harbour activity in South Africa is managed and controlled by public harbour authority Portnet and its operations management subsidiary Portcon. Harbour facilities are modern and can take care of all type of vessels and goods.

The three international airports are Cape Town, Johannesburg and Durban. There are secondary airports such as Bloemfontein, East London, Kimberley, Port Elisabeth and Upington. Internal flights are mainly operated by South African Airways, the national carrier.

Standards

The South African Bureau of Standard (SABS) is the organisation in charge of normalisation and certification. It works in association with the international ISO and IEC institutes. It is strongly advised to contact the SABS in order to understand the necessary technical and qualifying rules for marketing a product in South Africa.

World class

South Africa’s ports remain among the best in the world. For example, East London, with a world-class R80-million car terminal, has become one of the major motor-vehicle export and import terminals in South Africa and is recognised across the globe for its expertise. East London handled 399 ships during 2005/06 with a gross tonnage of 8 487 024 tonnes.

Multipurpose ports

Port Elizabeth, with its proximity to heavily industrialised and intensively farmed areas, has facilities for the handling of all commodities – bulk, general and container cargo.

Situated at the centre of the country’s motor-vehicle-manufacturing industry, the port imports large volumes of containerised components and raw material. The bulk of exports comprises agricultural products. Apart from agricultural produce, manganese ore, motor-vehicle-industry-related products and steel are exported.

The container terminal has maintained the highest handling rates in Africa in recent years and is accredited to International Standards Organisation (ISO) 9002.

Port Elizabeth handled 1 390 ships in 2005/06, with a total tonnage of 26 131 718.
Cargo handled during 2005/06 amounted to 3 983 054 t excluding containers, of which 3 116 274 t were bulk cargo, and 866 780 t breakbulk.

Located mid-way between Cape Town and Port Elizabeth, the port of Mossel Bay previously specialised in serving the local inshore and deep-sea fishing industry, as well as limited commercial cargo.However, it now serves the oil industry as well as other client-orientated marine cargo handling. It is the only South African port to operate two offshore mooring points within port limits. Both mooring points are used for the transport of refined petroleum products.

During 2005/06, Mossel Bay handled 2 323 vessels with a combined gross tonnage of 2 780 478 t. South African trawlers totalled 1 643 vessels with 197 817t.

The port handled a total tonnage of 1 483 234, of which 1 396 077 t was bulk cargo (almost entirely oil products) and 87 157 t breakbulk.

Some 388 109 t of cargo was landed at the port, and 1 095 125 t was shipped.

The importance of interlinking

Interlinking transport nodes has huge benefits for the entire country.

For example, the Johannesburg International Airport represents a huge economic asset for the Gauteng Province and the country as a whole. It has direct spin-offs for the people for Ekurhuleni, Johannesburg and Tshwane.

It is therefore critical that the government, the Airports Company and the various metropolitan areas work together to harness the economic benefits and potential of this asset for the years ahead.
The importance of these kinds of infrastructure projects to the country needs to be contextualised within the National Freight Logistics Strategy, the Transport Master Plan and the integrated transport planning currently being followed in the country.

The DOT is presently finalising a National Freight Logistics Strategy that combines infrastructure, operations and regulatory interventions to increase the efficiency and capacity of freight movements in the country. This particular road, the JIA Airport interchange, will provide free-flowing access to the airport and will certainly increase the ease of air cargo movements through the airport.

The importance of airfreight is often ignored in many analyses of the transport system in South Africa. The importance of this sub-sector means that a clear and unequivocal approach toward building air cargo as a backbone for inter-regional production and enhancing the movement of high-value goods across the continent is vital.

The DOT and Gauteng Transport’s freight-flow data analysis recently identified the constriction that the lack of interchange had on timely freight movements and its impact on congestion.

The approach of the DOT has identified the huge impact of inter-modal integration on reducing costs and the freight-carrying capacity of our existing key infrastructure. This imperative of cost reduction and removal of inefficiencies in the freight system is a clear response to the requirements of the government’s Micro Economic Reform Strategy.

Road K90, as proposed in the PWV road network planning, forms an important south-north road link, connecting long-distance traffic from the N17 freeway in the south with the N12 and P157-2 freeway in the north.

The JIA is probably the most important destination along this route. Road K90 also serves as a major collector for cargo originating along this route, for which a south-north movement is essential.

In the long term, it will also serve as an eastern support route for south-north route P157-2/PWV 13 once route PWV13 is extended southwards from the N12 to the N3 national freeway.

According to the original PWV road network planning (Route Location Report No. 399 dated August 1976), road K90 (north of JIA) was to be aligned to link up with the future road PWV15, just south of the proposed P157-2/PWV15 systems interchange.
The structure of the economy has changed fundamentally since then, but these changes have not totally filtered through to our infrastructure network.

Since 1999, numerous discussions were held between the newly formed Johannesburg International Airport Development Forum and an associated Technical Work Group regarding improved access to the JIA precinct.

As a result of the above, the JIA Development Forum and Technical Work Group facilitated the development of an improved access interchange between roads K90, K157 and P157-2.
According to the original proposed PWV road network planning, only road K90 was to gain access to road P157-2 (only to and from Pretoria), whilst road K157 was to form a T-junction with road K119 north at Bonaero Park.

In view of developments taking place in and around the JIA and with proposed route K90 and existing road K157 as the main access/distribution roads to serve the airport as well as the adjacent areas on its eastern side, it was decided that both these routes should have direct access to the P157-2 freeway in all directions.

This eventually resulted in the geometric configuration, which addresses the objective of linking both routes K90 and K157 to road P157-2 with the additional advantage of providing good access to the northern and eastern development areas by means of the proposed east-west Link Road.

According to the Department of Transport, the role of any infrastructure and road system must be played out within its proper context. That would be interlinking the various modes and nodes within South Africa’s freight logistics network.

Within the Gauteng environment, the maintenance and upgrading of roads needs to be a clear response to key transport challenges such as congestion, public transport and freight costs.

The role of DOT is to facilitate and stimulate economic development, not merely respond to planning that may or may not be outdated, disintegrated and unaligned with respect to the needs of all parties.

This exchange is very important for all those reasons, but is only one part of an integrated approach to planning and implementation across the DOT and all provinces and local authorities.

David Capel