South Africa's freight rail reform : a demand-driven perspective
Date
2014-11
Journal Title
Journal ISSN
Volume Title
Publisher
AOSIS Publishing
Abstract
During the 20th century, freight transport in South Africa was employed to attain politicoeconomic
ideals, resulting in the overprotection of rail and overregulation of road transport.
Increasing industry pressure, combined with the international deregulation trend, led to
deregulation in 1988. Myopia resulted in a rail investment hiatus and exponential growth
in high-value, long-distance road transport, causing excessive logistics and externality costs
for the country. The aim of this study was to propose a freight rail reform agenda based on,
(1) lessons from past freight transport policy efforts and (2) the results of freight transport
market segmentation driven by models developed over the past two decades. For the study,
freight flows were modelled by disaggregating the national input–output model into 372
origin–destination pairs and 71 commodity groups, followed by distance decay gravitymodelling.
Logistics costs were calculated by relating commodity-level freight flows to the
costs of fulfilling associated logistical functions. The standard management approach of
founding strategy development on market-driven segmentation provides a neutral input
to steer rail reform discussions in South Africa. Market segmentation points to a dualistic
rail reform agenda, enabling both a profit-driven core and a development-driven branch
line network. Freight flow insights are steering the policy reform debate towards long-term
freight strategy development and optimal freight logistics network design.
Description
Havenga, J.H., Simpson, Z.P. & De Bod, A. 2014. South Africa’s freight rail reform: A demand-driven perspective. Journal of Transport and Supply Chain Management, 8(1):1-7 (Art. #153), doi:10.4102/jtscm.v8i1.153.
The original publication is available at http://www.jtscm.co.za
The original publication is available at http://www.jtscm.co.za
Keywords
Railroads -- Freight -- South Africa, Transportation and state -- South Africa, Freight and freightage -- South Africa
Citation
Havenga, J.H., Simpson, Z.P. & De Bod, A. 2014. South Africa’s freight rail reform: A demand-driven perspective. Journal of Transport and Supply Chain Management, 8(1):1-7 (Art. #153), doi:10.4102/jtscm.v8i1.153.