State-owned railways utility Transnet Freight Rail (TFR) has signed yet another collaborative deal with a private logistics partner as it seeks to accelerate the implementation of South Africa’s stated goal of shifting rail-friendly cargo from the country’s roads back on to rail.

TFR signed a memorandum of understanding with Barloworld Logistics on Tuesday opening the way for multimodal transport and logistics collaboration between the two entities, having initialled a similar deal with Imperial Logistics earlier in the month.

CEO Siyabonga Gama said the alliances made it possible for private logistics companies to incorporate TFR’s long-haul service offering into their end-to-end logistics solutions, which could reduce costs, improve safety and lower carbon emissions.

Barloworld Logistics CEO Steve Ford stressed that, despite its heavy reliance on road, the company had always maintained an agnostic stance with regards to the transport platforms it used. He added that rail made sense in light of the “enormous” distances that goods needed to travel in South Africa to reach areas of demand.

Ford also anticipated material savings from the proposed multimodal strategy – savings that could even go some way to offsetting the costs associated with introduction of urban tolling on Gauteng’s motorways.

“We believe strongly that moving the right product onto rail will make significant impacts on the cost of distribution. So, I think e-tolling is a fact of life and customers will have to pay for it . . . but the cost/benefit of moving to rail will strongly outweigh any cost of e-tolls,” Ford asserted.

However, both he and Gama stressed that the full cost and efficiency benefits would only flow if appropriate investments were made into associated logistics infrastructure, as well as into modernising and expanding TFR’s rolling stock.

Major logistics hubs were being planned for Gauteng, as well as a number of other provinces, with a nearly R1-billion expansion already under way at Gauteng’s existing inland port of City Deep, which should be officially opened in early 2014.

In additional, TFR was moving ahead with a fleet recapitalisation exercise, with rail-related investment comprising 65% of the larger Transnet Group’s R307.5-billion capital investment plan to 2020.

Transnet was currently adjudicating bids for the supply of 599 dual-voltage electric locomotives and 465 diesel locomotives, which could involve an investment of around R38-billion.

In addition, TFR had already taken delivery of, or had placed orders for, various other locomotives, which were being deployed across its heavy-haul and general-freight corridors. Its wagon fleet was also being upscaled, with TFR anticipating the addition of more than 2 800 wagons in the current financial year alone.

Gama said the investments were creating the basis for the alliances TFR was currently forging with the private sector, as TFR was now in a position to deliver on its commitments.

Ford added that the envisaged partnership with TFR should improve Barloworld Logistics’ business sustainability, as well as the sustainability of the country’s transport system.