Toyoto's road to rail switch for finished vehicles in SA

Irma Venter


Toyota South Africa Motors (TSAM) switched from road to rail in a decisive manner as it signed an agreement with Transnet Freight Rail (TFR), in which TFR’s Container and Automotive Business Unit, or CAB, would now directly handle the transportation of certain locally manufactured Toyota vehicles destined for the export and domestic markets, as well as vehicles imported into the country.


Under the previous arrangement Toyota vehicles were moved by a logistics service provider with a fleet of road carriers, which only considered rail for surplus volumes.

TSAM said the new agreement was in line with CAB’s stated strategy to offer an end-to-end supply chain solution. To that end the unit had increased its value proposition to customers by, for example, including vehicle loading and yard management in its portfolio of activities.

TSAM expected to benefit from the “significant bulk-carrying capacity” offered by TFR.

“This will translate into long-term savings on vehicle movement and general logistics overhead costs.”

Also making the move to rail an attractive option was the fact that it would lessen TSAM’s carbon footprint, said TSAM president and CEO Dr Johan van Zyl. Adding rail to the transport mix offered "significant benefits" as one consignment of vehicles moved per rail was equivalent to 10 vehicle carriers on the road, he explained.

“We believe that the new arrangement will lighten our reliance and impact on the road transport network and allow for significant cost savings in the longer term. As such we also believe that we will set an example as the leading vehicle retailer and exporter in South Africa to other manufacturers in South Africa to make use of the significant rail infrastructure that is available in the country,” he added.

The contract execution would be in three phases, with the first phase focused on the transportation of cars for the domestic market from Isipingo, in Kwazulu-Natal, to Kaalfontein, in Gauteng; phase 2 the transportation of imported cars from Durban to Kaalfontein and phase 3 the movement of imported cars, as well as cars for the export market, between Isipingo and Durban.

The Toyota plant is located in Durban.

Phase one had already started as a pilot project on October 17, when the first cars were loaded onto the train at the Isipingo terminal, and railed to the Kaalfontein terminal.

This service currently moves 500 vehicles a week, already removing 60 trucks from the N3 over the same period.

This would now be followed by phase 2.

The third and the last phase would be implemented at a later stage, as fit-for-purpose flat and open wagons were currently in the design phase.

“One should keep in mind that this year TSAM will manufacture close on 155 000 vehicles and will retail in excess of 100 000 units in the local market,” said Van Zyl, putting the volumes involved into perspective, even though not all of these vehicles would be moved by TFR.

“Each of these vehicles has to be distributed on time and without damage to each customer, either here or in our export markets.”

TSAM exports vehicles to 57 markets, including Germany, Namibia and Russia.

The company did not want to quantify the estimated cost savings such a move would provide the company.

Source: http://www.engineeringnews.co.za/article/toyota-signs-up-to-move-vehicles-by-rail-2011-12-14