Logistics company EIT Group is set to expand its intermodal village in Estcourt, KwaZulu-Natal, into a multibillion-rand operation.

South Africa’s first fully operational intermodal freight village in Estcourt, KwaZulu-Natal, is not only actively addressing the inefficiencies and congestion along South Africa’s busiest road freight corridor between Durban and Gauteng but is about creating more jobs and reducing the cost of transport, EIT states.

“This will set an important precedent for containing logistics costs and making local manufacturers more competitive,” says EIT Group CEO Wessel Jacobs.

The freight village, which is modelled on similar facilities in Eastern Europe, comprises a multi-mode logistics centre that provides a broad range of transport, logistics services and value-added supply chain services for both national and international cargo.

It currently caters for containerised cargo, with the ability to include bulk commodities on the horizon.

The expanded intermodal freight village is expected to not only create jobs and grow the small town of Estcourt – a strategy that is at the heart of government’s economic recovery plan – but cut transport costs to South Africa’s main port by as much as 50%.

EIT Group CFO Manka Sebastian says this will make local manufacturers far more competitive regionally and internationally.

“When you look at Europe, transport costs make up 10% of imports and 8% of exports. In Asia, logistics accounts for 19% of imports and 16% of exports. In Africa, 45% of our import costs come from transport and 35% of our export costs do too.

“If we play our part and make logistics between 30% and 50% more cost efficient, we could nullify the punitive tariffs imposed by the US administration,” she explains. 

The Estcourt intermodal freight village is located on the former site of the Masonite board manufacturing facility.

Jacobs and Sebastian deem it critical to locate facilities such as this at the most economically efficient point along the route – in this case, along the N3 and rail corridor junction, 567 km by rail from the Transnet City Deep container terminal and Sentrarand switching yards, in Gauteng, and 176 km from the Container Terminal and Bayhead main rail terminal at the Durban port.

The EIT Freight Village represents a long overdue marriage between road and rail that addresses two of South Africa’s largest logistics conundrums: an inefficient and run-down rail network, which is expected to take more than ten years and R80-billion to turn around, and an ever-growing army of trucks that are not only a safety hazard but damaging road infrastructure.

Currently 7 000 trucks operate along the N3 every day, moving about 27.5-million tons of freight every year.

Road transport accounts for more than 85% of all freight moved, with rail accounting for less than 14%.

Goods trucked from Gauteng to the small KwaZulu-Natal town can be transferred to rail at Estcourt to complete the journey to the busy Port of Durban. The opposite takes place for imports.

Jacobs says that avoiding this small stretch of the freight journey, which is characterized by steep inclines and high fuel costs, accidents, delays and days-long congestion at the port, and which ultimately accounts for 50% of the costs, is a game-changer and will take trucks off the roads.

Moreover, warehousing and other essential infrastructure in Estcourt is available at a fraction of the cost when compared to main city centres.

Jacobs says that the former Masonite site is perfect as it has an existing rail link that has been completely refurbished. The first phase of the development is now complete, and the freight village has been fully operational since March 2024. 

“This was the proof-of-concept phase. We are now moving on to further expansion plans. We are going to enlarge terminal one which is already 60 000 m². We have also taken an option to expand to the other side of the rail line,” Jacobs confirms.

He adds that this will provide a 500 ha site on which EIT Group can build a second terminal. “We want to use terminal one for clean cargo and terminal two for minerals and other ‘dirty’ cargo.”

EIT Group’s first test train ran in November 2023, and operations officially began in March 2024.

Negotiations with Transnet Freight Rail delivered three slots to run trains on the main line to Durban each week with well-advanced plans to increase this to three trains daily in the near future.

Sebastian concludes that EIT Group has cultivated strong collaborative relationships with both the public and private sectors.

“Security is on call to address any safety concerns surrounding train stoppage and ongoing work with Transnet Freight Rail addresses any other challenges.

“To date, we are yet to miss a single vessel at the port.”