Counting the true cost of the coal train collision

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JEREMY MAGGS: Today, the industry organisation, the Road Freight Association (RFA) says the collision of two coal trains on the Richards Bay ore line at the weekend is underscoring the vulnerability of the multi-ore line owing to the inherent risks of outdated manual systems, as well as poor operational control. From the RFA, chief executive officer, Gavin Kelly, leads our programme today. Gavin, first of all, as a result of this collision, how many more trucks are on the road?

GAVIN KELLY: Good afternoon, Jeremy. Good afternoon to your listeners. May I take two seconds to wish you all a fantastic 2024 with all the challenges that are coming.

JEREMY MAGGS: Thank you.

GAVIN KELLY: Well, Jeremy, we know that when one of these large coal trains, and this is what we are really talking about here, is taken off the rails that there are easily up to 60 more vehicles, more trucks on the road that come along.

If those rails are kept out of order and a train goes along those rails, probably at least three times a day, we are going to start looking at 180 to 200 trucks that are going to be needed to take what was going along on that train. Those are just very, very rough figures. It depends really on what sort of ore and how often those trains are actually running.

Read: Transnet trains collide, shutting SA’s coal export line

JEREMY MAGGS: Gavin, reading your very blunt statement, it seems to me that you are saying this was an accident that was almost waiting to happen.

GAVIN KELLY: Well, we’ve got very little report in terms of exactly what happened and yes, once again, we know that there are some outdated processes that Transnet uses. For example, the signalling systems evidently are still all manual. There are also a number of areas along the line, a specific area in the coal line, where it’s a single track.

So your risks are still huge in terms of when something goes wrong, the whole line is brought to a stop.

Now that needs to be resolved at some stage sooner than later. Otherwise, we are going to continually have these sorts of hiccups and delays.

JEREMY MAGGS: As far as those delays are concerned, and I guess as well added cost, there’s a detrimental effect there right across the value chain?

GAVIN KELLY: Well, yes, there will be Jeremy. First of all, we are going to be spending a lot more on diesel. Even though diesel has gone down a couple of times over the last couple of months, it is still an expensive commodity. We use the roads, there is a fair amount of road wear, that means maintenance will have to be looked at again and probably more maintenance done. Then of course there’s all the wear and tear on the vehicles itself.

So it adds in those costs into the value logistics chain. It makes that ton of coal that much more expensive in the open market.

This is what we’ve been saying for a fair amount of the last part of the decade, is that we are not competing trucks against trains in South Africa. We are competing South African coal with Australian coal or Indian coal or whoever it may be. That’s really where the big loss is.

Read:
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Transnet CEO fears major job losses in trucking industry after road demand fades
Transnet needs more than a plan to fix South Africa’s logistics

JEREMY MAGGS: As far as the investigation is concerned, and notwithstanding your comments that we still know very little about what actually happened, which is quite extraordinary in itself, what do you think the immediate priorities of this investigation need to be?

GAVIN KELLY: Well, as always, Jeremy, you need to find out what was the root cause, not what the symptoms were. So now we’ve got a couple of railway wagons lying around and we are going to fix the railway line itself. We’ve got to find out what caused this and there are some various interesting statements.

One of them coming out from some sources of media is that it was a load shedding issue. Now how that contributed, I’m not quite sure, but that’s what we’ve got to do.

We’ve got to find out why it happened and then more importantly, how do we prevent that from happening again.

If it’s load shedding, of course we all know what we need to do in terms of that. But if it’s something else, if it’s weak rail lines or there are bent railway lines, then is the process of checking, and I’m just using that as an example please, is the process of checking those lines on a regular basis in place. So it’s finding out what went wrong, fixing it of course, but how do we prevent it from happening again.

JEREMY MAGGS: Gavin Kelly, in terms of keeping the supply chain supplied, I guess, how difficult at this point will it be to switch from rail to truck to ensure that there is seamless delivery?

GAVIN KELLY: Well, once again, that’s not a tremendously difficult thing to do because you can have the trucks arriving at the point of dispatch, so where the mines are, that is not too difficult. But the problem is, and this is why we’ve got such queues at the port at Richards Bay, is because Richards Bay Coal Terminal (RBCT), as it’s commonly called, was developed to receive the coal and the ore by train. It’s got a dedicated system in the port to offload those trains. It’s quite an ingenious process.

So you can do a whole lot of train wagons at one go, it goes onto a conveyor belt, and we’ve heard that’s still a problem, and from there onto the ships quite quickly. With trucks, you need to find a place to offload because the trucks cannot get onto the conveyor belt or into that area. It’s not built for them; it’s built for trains. They will very quickly destroy whatever railway line is there because you would have to drive over them.

So the challenge really is offloading the coal and that is what has given rise to these huge queues of trucks outside the port of Richards Bay because they cannot get in, easily offload the coal into a system that gets it onto the ship quickly and out again. So whilst it’s easy to load the trucks at the mine, if we use that example, it’s not so easy to offload them in an efficient manner at the port itself.

JEREMY MAGGS: Gavin Kelly, thank you very much indeed.