Freight Rail 2018 - transnet.net

1 AADUF reight Rail 2018 Highlights Transnet Freight Rail has continued to actively seek opportunities to service existing customers and new customers, which has resulted in a 3,3% volume growth compared to 2,3% in the previous financial year. This was despite the subdued economic climate characterised by low GDP growth and lower than expected commodity prices. This commendable performance was accomplished through collaboration with customers and value chain partners as well as dedication and a continuous improvement culture embedded in accountability among employees. Export coal line railed 77 mt against the target of 76 mt. This reflects a historic tonnage performance achievement for this corridor since its opening in 1977, and surpasses the record of 76,2 mt achieved in 2015. General Freight tonnages recorded 3,1% growth against the previous financial year (well above the national economic growth rate).

2 This is evidence of the successful implementation of the road-to-rail strategy, which targets rail-friendly traffic in various market segments to grow rail volumes and market share. General Freight commodities that contributed to this growth included the following: Non-ferrous metals achieved a 115% improvement, recording volumes of 2,8 mt against the target of 1,3 mt. The Manganese portfolio achieved a record throughput of 13,7 mt against a target of 11,1 mt. This represents an improvement of 23,7% against target and growth of 13,5% year on year (2017: 12,1 mt). The Containers and Automotive business unit exceeded the volume target of 9,0 mt by railing 9,8 mt, reflecting an improvement of 9,0% against target and growth of 7,4% year on year (2017: 9,2 mt). Improvements in containers moved on key national corridors resulted in growth of 6% year on year, from 698 000 TEUs in 2017 to 740 000 TEUs in 2018 (representing an additional 42 000 TEUs railed).

3 The Agriculture and Bulk Liquids business unit reflected growth of 16,3% in the grain sector by transporting 2,1 mt of grain in 2018 (2017: 1,8 mt) against a target of 1,9 mt. A total of 215 new general Freight locomotives were deployed into operations. The coveted awards and certifications that Freight Rail received during the 2018 financial year are in recognition of the development of innovative rail solutions, successful strategic partnerships and implementation of best practice. These include the following four Logistics Achiever Awards (this is the first time since 2002 that Freight Rail has been a recipient of these highly prestigious and important industry awards): Platinum awards: Saldanha Offloading Terminal: for the implementation of a logistics solution enabling the railing of manganese in skiptainers on the export iron ore line to facilitate transfer to the multi-purpose terminal at Saldanha for export.

4 Ceres Rail Development: for reconstruction of the branch line in co-operation with a local private developer, the introduction of a new train service for containerised fruit exports to the Port of Cape Town and the launch of a steam train tourism venture. Gold Awards: Postmasburg manganese common user facility: for the development of a common user facility at Postmasburg to enable access to rail for emerging miners to cost effectively rail commodities to the port for export. ArcelorMittal South Africa Steel Hub: for a rail-based logistics solution partnership between ArcelorMittal, Barloworld Logistics and Freight Rail, based in Isando for the distribution of finished steel Freight Rail Top Employer accreditation for the third consecutive year, proof of collaborative efforts over the years to transform the organisations culture.

5 The certificate of accreditation for Track Technology Management in accordance with SANS-ISO/IEC 17025:2005. The ISO 9001:2015 Quality Management Systems accreditation certificate for Freight Rail s Rehabilitation, Mmanagement and Emergencies unit. In September 2018, Transnet Freight Rail hosted the 11th International Heavy Haul Association (IHHA) Conference, which was declared the most successful conference in the 40-year history of IHHA, with a record of more than 1 200 delegates from over 39 countries across the world. Freight Rail s General Manager: Capital Planning was elected the Global Chairperson of the IHHA s Board of Directors, the first South African to be elected to this position. IHHA has 10 member countries that transport bulk Freight with heavy and long trains, and is focused on promoting technical and operational excellence.

6 Transnet is currently spearheading the development of a Global Heavy Haul Railway Vision 2030-Under the 4th Industrial Revolution, with all the other IHHA member countries. The outcome of this study will be presented and discussed at the next IHHA Conference to be held in Norway, June 2019. Risk and safety management highlights for the year included: Successful certification according to the new, stringent ISO 14001:2015 Environmental Management System, cementing the commitment to enhance Freight Rail s environmental and sustainability best practices. With Freight Rail s development of a mobile risk app, the organisation launched into the digital sphere of risk management in line with the digital thrust of the Transnet Strategy. The app facilitates the seamless process of undertaking risk assessments, resulting in improved risk-based decision-making in the operational areas and improved levels of safety.

7 The Business Continuity Institute recognised Freight Rail s Business Management Framework, processes and resilience in ensuring successful recovery in the event of a business interruption. The introduction of the Transnet Integrated Management Approach and the development of 18 related system procedures will ensure alignment of systems at Transnet level and improvement of operational efficiencies. The development of the risk management culture measuring tools to transition from the risk management maturity index that is process driven to an enterprise approach that influences employee behaviour. The successful launch of the Rail Occurrence Investigation Programme in partnership with the University of Pretoria. Twenty employees completed the programme and graduated in May 2018. The objective of this programme is to create a team of qualified experts who will assist in establishing the root causes of rail occurrences and thereby prevent injury, loss of life and damage to assets.

8 Outreach programmeThrough the two Phelophepa healthcare trains, Transnet has provided primary healthcare services to rural communities along Transnet s strategic rail corridors. In the last financial year, Transnet was able to touch the lives of more than 400 000 people in eight of South Africa s nine provinces (excluding Gauteng). Each Phelophepa train has 19 coaches and offers services through the following clinics: general health and education, dental, eye, psychology and pharmacy. In addition, Phelophepa provides oncology services that include education, screening, diagnosis, early management and prevention of cancer conditions. The education, screening and management of common chronic conditions, such as diabetes and hypertension, are also included in the services table below details the beneficiaries assisted and health services provided through the Phelophepa outreach programme.

9 CategoryNumber of beneficiaries impactedTotal patients reached on board420 000 Total patients reached outreach 517 684 Prescriptions/scripts 61 078 Eye Clinic total patients 51 262 Eye Clinic spectacles dispensed64 246 Dental Clinic total patients 22 768 Health Clinic total patients 74 030 Edu-Clinic number of trained community members1 466 Students for experiential learning2 500 Local labour5 390By working with the National and District Department of Health, the programme has contributed to improving the quality of primary healthcare and addressing the triple challenges of poverty, unemployment and inequality. From inception, the Phelophepa programme has brought highly sought after relief to more than 23 million people. Transnet offers the services as a responsible corporate citizen that cares for the communities in which the Company operates.

10 In every station temporary employment is offered to retired nursing staff and to local people for general work services. Freight Rail also procures various supplies from local businesses to boost the local continues to make a modest contribution in offering experiential learning opportunities to healthcare students as part of their internship overviewFreight Rail is Transnet s largest Operating Division and strives to be a Top 5 railway company globally by 2020. The division s primary business is to provide rail transport of commodities for the export, regional and domestic markets. Freight Rail operates the world-class heavy haul coal and iron ore export lines and is developing the manganese export corridor to heavy haul standards. Freight Rail also transports a broad range of bulk general Freight commodities and containerised Freight .