A proposed regulatory framework for road and rail freight transport in South Africa

Abstract

The increase in the number of freight vehicles on South Africa’s rural road network has received substantial attention. Insinuations persist that long-distance road freight haulage is of a somewhat unsavoury economic nature, and that strict economic re-regulation of the land freight transport is necessary. During the 1970s road transport replaced rail carriage as the dominant form of long-distance freight transport (excluding minerals and ore) in South Africa. On long hauls road freight carriers transport certain primary products of an organic nature (such as timber, fish and agricultural produce), some semi-finished goods, many finished goods and most consumer goods. Road freight carriers are continuously gaining market share on long-distance links where rail transport is the more cost efficient mode. The greater value added by road freight carriers in comparison with rail transport through service effectiveness is often more than the cost premium paid for utilising their service rather than making use of rail transport. Throughout history, governments have involved themselves in transport. A diverse range of arguments have been advanced for this involvement in transport, including the following:

1. Control of excessive competition,
2. co-ordination of transport,
3. integration of transport with economic policy,
4. maintenance of safety, security, and order,
5. provision of costly infrastructure,
6. provision of public goods,
7. recovery of the true resource cost of transport inputs,
8. regulation of harmful conduct and externalities,
9. restraint of monopoly power, and
10. social support.

A set of nine instruments can be identified that governments apply to influence the performance of the freight transport industry:

1. Legislation,
2. direct supply,
3. fiscal measures,
4. monetary measures,
5. moral appeal and persuasion,
6. policies relating to strategic commodities,
7. procurement policy,
8. provision of information, and
9. research and development.

The best prospects for a sound development of land freight transport activity in South Africa will be offered within the framework of a free-functioning freight transport market.