Rail key to driving Southern African trade - Maersk

Cape Town - Railway infrastructure development is an important building block to improving trade across the Southern Africa hinterland territories, comprising three landlocked countries, namely Malawi, Zimbabwe and Zambia.

This is according to Emmanuel Ntshangase, country manager of Maersk Line Hinterland Territories. He says access to the hinterland countries is extremely vital for the growth of the African continent, as each of these countries have a great deal to offer the rest of the world.

“For example, Lake Nyasa in Malawi contains more fish species than any other lake in the world, making it a prime location for the export of fish. Furthermore, Zambia is Africa’s second largest copper producer and Zimbabwe is the world’s sixth largest tobacco producing country,” says Ntshangase.

Poor inland connectivity and the related cost to move products inland are among the biggest challenges currently facing landlocked countries with regards to trade.

“The World Bank Trading Across Boarders Report, which ranks economies on their ease of doing business, suggests that hinterland Countries currently have room to improve when it comes to moving products inland,” says Ntshangase.

Cargo

He attributes the majority of these issues to the high proportion of cargo that currently moves inland via road.

“The border crossings and customs processes in these landlocked countries were not designed for the amount of traffic and cargo that currently moves via road, which has occurred due to the use of railways having diminished over the years,” he says.

Ntshangase explains that increasing the use of rail, which reduces the amount of cargo on the road provides a solution to the majority of these challenges and brings about numerous advantages in the form of lower costs, diminished risk and social benefits.

“Rail transport is a cost-effective option in comparison to truck transport, particularly for heavy containers, and railways are more and more willing to work with customers to find better transport solutions. Risk is also reduced in terms of port storage as well as possible standing time at the border posts and finally, from a more social aspect, roads will not be further damaged and by reducing trucks on the roads, there will be fewer truck-related accidents,” Ntshangase explains.

He points to East Africa, a region in which great progress has been made in terms of the development of rail infrastructure.

“Closer to South Africa, Transnet Freight Rail are continually performing maintenance and upgrading lines as well as locomotives whilst all the other Southern African rail operators, which include the National Railways of Zimbabwe, Zambia Railways, and the Mozambican Ports and Rail Company, are starting to work much closer together as they have realised that they all are part of the total supply chain. Collaboration between these rail operators is therefore vital,” he says.

SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.

Read Fin24's top stories trending on Twitter:

ZAR/USD
17.00
(-0.09)
ZAR/GBP
21.24
(-0.12)
ZAR/EUR
19.14
(-0.13)
ZAR/AUD
11.81
(-0.13)
ZAR/JPY
0.16
(-0.20)
Gold
1774.74
(+0.03)
Silver
18.05
(+0.01)
Platinum
808.00
(+0.25)
Brent Crude
42.78
(-0.79)
Palladium
1914.01
(+0.62)
All Share
54521.90
(-0.17)
Top 40
50179.89
(-0.26)
Financial 15
10150.02
(-0.64)
Industrial 25
76554.73
(+0.52)
Resource 10
50138.02
(-1.24)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1592 votes
I am taking a hit, but should be able to recover in the next year
23% - 2085 votes
My finances have been devastated
35% - 3133 votes
It's still too early to know what the full effect will be
25% - 2257 votes
Vote