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South Africa: Transnet rolls with rest of the continent

In depth
This article is part of the dossier: Logistics: move it

By Xolisa Phillip
Posted on Wednesday, 11 March 2020 12:53

A worker walks past a loader levelling the ground during the construction of Gautrain rail in Johannesburg
A worker walks past a loader levelling the ground during the construction of Gautrain rail in Johannesburg. REUTERS/Antony Kaminju

Transnet is phasing out its ‘Market Demand Strategy’ and replacing it with ‘Transnet 4.0’ as it looks to the international market, particularly the rest of Africa, for revenue.

A key component of Transnet 4.0 is international expansion, according to Wilson Mogoba, a programme director at Transnet International Holdings.

The Market Demand Strategy emphasised South Africa and its market requirements, while it did not give international expansion a place of prominence.

However, Transnet has had to confront operational challenges in its home market. These include a struggling economy whose industrial base is in decline.

READ MORE Ghana taps Transnet for rail renaissance plan

Transnet feels the effects of this development on its bulk cargo volumes, which have been on a downward trend in recent years.

In its 2019 annual report, the company noted the year was “turbulent” for Transnet Freight Rail, one of its five operating divisions.

Transnet Freight Rail is the company’s biggest operating division and provides rail and freight services to transport commodities for export.

Transnet cited a “sluggish economy, unstable market conditions [and] operational and governance challenges.”

Volumes handled by Transnet Freight Rail dropped 4.9%.

This affected the division’s revenue intake and dragged it down 0.3%.

“Transnet 4.0 [looks at] new avenues of growth for Transnet to ensure we remain a sustainable company. Hence the rest of the continent offers [opportunities],” says Mogoba.

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