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LETSITELE CITRUS RAIL WORKSHOP 10h30 - 10 TH MARCH 2011 THE JUNCTION, LETSITELE

LETSITELE CITRUS RAIL WORKSHOP 10h30 - 10 TH MARCH 2011 THE JUNCTION, LETSITELE. AGENDA INTRODUCTION TRENDS IN ENERGY RESOURCES SESSION 1: CITRUS BREAK-BULK RAIL ACTIVITIES Mitchell Brooke – Break-bulk Rail Project Status Update Nelis van Tonder – TFR Focus on Citrus Transport

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LETSITELE CITRUS RAIL WORKSHOP 10h30 - 10 TH MARCH 2011 THE JUNCTION, LETSITELE

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  1. LETSITELE CITRUS RAIL WORKSHOP 10h30 - 10TH MARCH 2011 THE JUNCTION, LETSITELE

  2. AGENDA • INTRODUCTION • TRENDS IN ENERGY RESOURCES • SESSION 1: CITRUS BREAK-BULK RAIL ACTIVITIES • Mitchell Brooke – Break-bulk Rail Project Status Update • Nelis van Tonder – TFR Focus on Citrus Transport • Discussions • Way Forward • LUNCH BREAK: 30 MINUTES • SESSION 2: CITRUS CONTAINER RAIL ACTIVITIES • Mitchell Brooke – Time and Temperature Factors for Reefers Inland Loaded vs. Port Loaded • Mitchell Brooke – Polokwane Hub Project Status Update • Andy Connell – Letsitele Container Train Value Added Services • Daleen Endley – Letsitele Container Train Critical Success Factors • Discussions • Way Forward • EU 24-HOUR RULE - REG EC/1785 of 2006

  3. AGENDA • INTRODUCTION • TRENDS IN ENERGY RESOURCES • Electricity Index • Basic Diesel Price • Transport Costs • RSA – EU Ave BAF Indicator

  4. Consumers can expect a 300% increase in electricity from 2008 – 2012 Likely to add pressure on production, port handling and storage costs

  5. Diesel price at the pump >R3.00 – R4.00 per litre above Basic Diesel price Indications that we could expect a ~R2.00 per litre increase to June 2011 Data March 2011 – June 2011 is an assumption based on trend

  6. By indication, transport costs may increase by 72% over the last 5 years • Fixed cost increased by 52% - Labour cost / Capital Cost • Variable cost increased by 86% - Fuel (100%) / Maintenance (80%) / Tyres (90%)

  7. Influence on Variable Transport Costs • By indication, transport costs may increase by 72% over the last 5 years • Fixed cost increased by 52% - Labour cost / Capital Cost • Variable cost increased by 86% - Fuel (100%) / Maintenance (80%) / Tyres (90%)

  8. The average BAF US$ pp is estimated to peak at the 2008 levels. • The strengthening of the ZAR / US$ has deflated the BAF increase in ZAR terms. • Ave BAF could reach R800 pp by July 2011.

  9. AGENDA • INTRODUCTION • TRENDS IN ENERGY RESOURCES • SESSION 1: CITRUS BREAK-BULK RAIL ACTIVITIES • Mitchell Brooke – Break-bulk Rail Project Status Update • Nelis van Tonder – TFR Focus on Citrus Transport • Discussions • Way Forward

  10. Rail Characteristics Rail transportation requires homogenous (Same) types of cargo transported in bulk volume over great distances to be viable and feasible. Requires wagons lots of ~40 wagons from point of loading to point of off-loading to be efficiency. Where rail lines are not accessed directly, there is a dependence of road transport to deliver cargo to rail sidings – Adds pressure on the rail rate. O Type – 24 Standard Height Pallets Pallet Friendly – 24 High Cube Pallets

  11. Rail transportation requires homogenous types of cargo transported in bulk volume over great distances to be viable and feasible. Northern Limpopo, Letsitele, Hoedspruit and Malelane are bulk rail viable.

  12. If we can’t get it right in Letsitele how will rail operate elsewhere? 2010 Regional production volume of pallets travelled to ports. Areas above 80 million pallet kilometres could be rail friendly.

  13. Northern Region Production Grouping Northern Limpopo from Letsitele upwards to Zimbabwe produce large Valencia crops Central Limpopo from Letsitele to Hoedspruit and Malelane produce large Grapefruit crops Groblersdal, Marble Hall and Zebidiela produce large Navel and Lemon crops.

  14. Northern Region Production Volume Overview Early season Grapefruit from Letsitele, Hoedspruit and Malelane

  15. Northern Region Grapefruit Production Overview

  16. Northern Region Grapefruit Rail Volume Overview Letsitele / Hoedspruit / Malelane to Durban 50% GF Production for Japan & other markets

  17. Northern Region Valencia Production Overview

  18. Northern Region Valencia Rail Volume Overview Letsitele / Polokwane to Durban 30% Val Production for Russia & other markets

  19. Northern Region Total Rail Volume Overview Service 2 20% of citrus volume to Durban = 5,500 citrus road trucks off our roads

  20. Northern Region Break-bulk Rail Overview Valencia 2 Wk 25 - 36 Grapefruit 1 Wk 17 - 25 • Grapefruit Rail Service 1 Wk 17 – 25 • Valencia Rail Service 2 Wk 26 – 36

  21. Durban Port Rail Siding Overview ECS 30km South

  22. Rail Proposal for Letsitele • Principle: • To rail exporters and agents have to contract capacity at a cold store with a rail siding. • There should be more focus on acquiring train lots ~ 40 wagons to these cold stores to ensure better efficiency. • FPT / 333 Logistics / 328 Logistics / MFT / ECS. • Grapefruit week 17 – 25: • Japan Grapefruit to Durban ambient store – rail siding available! (333 Logistics). • Japan Grapefruit to MFT. • Accumulation of Grapefruit to other markets for a specific cold store. • Valencia's week 26 – 36: • Valencia to Russia (standard pallets) accumulated from packhouses. • 95% of fruit sent to Russia is loaded at FPT Terminal. • Accumulation of Valencia’s to other markets for a specific cold store.

  23. AGENDA • SESSION 2: CITRUS CONTAINER RAIL ACTIVITIES • Mitchell Brooke – Time and Temperature Factors for Reefers Inland Loaded vs. Port Loaded • Mitchell Brooke – Polokwane Hub Project Status Update • Andy Connell – Letsitele Container Train Value Added Services • Daleen Endley – Letsitele Container Train Critical Success Factors • Discussions • Way Forward • EU 24-HOUR RULE - REG EC/1785 of 2006

  24. The Intermodal Concept Flow Model Road Journey Packhouse Inland Transfer Hub Fruit transferred from Road to Rail (Breakbulk & Containers) Packhouse Packhouse Inland Facility Rail Journey Port Cold Store Port Dispersion Siding - wagons are routed directly to Receiving Point Fruit Terminal Container Terminal Overview of Citrus Rain Transportation? • 3 Mode Approach: • Ambient break-bulk • Packhouse stuffed Reefer Containers • Reefer Containers stuffed at inland facility Definition : Intermodal freight transport involves the transportation of freight in an intermodal container or vehicle, using multiple modes of transportation (rail and truck), without any handling of the freight itself when changing modes. The method reduces cargo handling, and so improves security, reduces damages and losses, and allows freight to be transported faster. Reduced cost and increased efficiency is achieved by utilizing this method of transportation. Main delay factor is at the port routing points

  25. Reefer Container Loading Comparison(Pre-cooling and Shipping Timeframes) Port Stuffed Reefer Inland Stuffed Reefer Packhouse Stuffed Reefer Packhouse Packhouse Packhouse Container Stuffing </= 3 DAYS NIL DAYS Cold Store Inland Ambient Store Pre-cooling Temp </= 4 DAYS </= 4 DAYS </= 1 DAY Container Stuffing Cold Room or Container Stuffing Container Terminal </= 3 DAYS </= 4 DAYS >/= 6 DAYS Zero Handling and Storage Charges It must be noted that cooling times may vary depending on refrigeration environment – Forced air or static cooling rooms. Pre-cooling Temp >/= 10 DAYS Pre-cooling Temp </= 8 DAYS Best for Fruit Integrity It must be noted that fruit could be </= 7 days of age before being stuffed Best Carbon Footprint Factor Best Shipping time to Markets Container Terminal >/= 10 DAYS Container Terminal </= 7 DAYS High Risk Logistics > Handling and Storage Charges < Handling and Storage Charges < Fruit Quality and Damages due to excessive handling? Better for Fruit Integrity Highest Carbon Footprint Factor Better Carbon Footprint Factor Better Shipping time to Markets Logistics Nightmare Note: this assumption is based on Letsitele - Durban average times during peak season. Medium / High Risk Logistics

  26. AGENDA • SESSION 2: CITRUS CONTAINER RAIL ACTIVITIES • Mitchell Brooke – Time and Temperature Factors for Reefers Inland Loaded vs. Port Loaded • Mitchell Brooke – Polokwane Hub Project Status Update • Andy Connell – Letsitele Container Train Value Added Services • Daleen Endley – Letsitele Container Train Critical Success Factors • Discussions • Way Forward • EU 24-HOUR RULE - REG EC/1785 of 2006

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