Transnet Freight Rail Launches the TFR Transformation Strategy
On May 17, 2023, Sizakele Mzimela, the Chief Executive of Transnet Freight Rail (TFR), launched the TFR Transformation Strategy in Parktown, Johannesburg. The presentation aimed to rally employee commitment for Project 200, a stretch target set by TFR for the current financial year.
TFR plays a critical role in enabling economic activity within the South African Development Community (SADC) and facilitating export activity. It provides rail network infrastructure and operates rail services across major corridors for the transportation of various bulk and general freight commodities, including mining, agriculture, manufacturing goods, bulk liquids, containerized freight, and automotive units and components for regional and domestic markets.
The strategy promotes strategic partnerships to support transformation, as well as innovative and sustainable operating models. Key focus areas include digitization and infrastructure investment.
“We aim to increase train volumes by significantly improving efficiencies throughout our value chain. We will introduce dynamic pricing, profit-driven targets, and a more customer-centric organizational structure. The optimization and investment in a skilled and highly motivated workforce that drives productivity are critical to our success. TFR will strengthen its position as a key value driver and the preferred freight rail carrier locally,” adds Mzimela.
Operationally, the business has been affected by three main limitations that have impacted the bottom line. These include the long-standing locomotives, the underinvestment in infrastructure, and the disruptive effects of vandalism, theft, and sabotage. Systemic underinvestment in infrastructure has led to decreased reliability, increased derailments, and other incidents. Cable theft, vandalism, and sabotage of key infrastructure have caused operational disruptions and dissatisfaction among customers.
TFR is now focused on improving efficiencies through the following initiatives:
- Returning long-standing locomotives to service.
- Introducing outcome-based security measures.
- Prioritizing key infrastructure maintenance.
The transformation strategy outlines five key initiatives that will stabilize rail performance and increase volumes across all corridors. These include the return of long-standing locomotives in specific corridors, the leasing out of the Container Corridor, and the termination of unprofitable commodity flows. Improved security measures, including outcome-based contracts and enhanced collaboration with industry partners, are also part of the plan.
“We are confident that the immediate focus on digitization will lead to improved efficiencies, and the accelerated infrastructure programs will result in increased profitability. We have always been a resilient company, and we will face these challenges with the necessary perseverance,” said Mzimela.
The Transformation Strategy focuses on six pillars:
- Rolling stock, infrastructure, capacity restoration, and maintenance.
- Digitization and technology for safe and efficient operations.
- Overhauling policies, people, and procurement processes.
- Enhancing security and safety measures.
- Price reform, product offerings, and selection.
- Funding, capitalization, and cost reduction.