Transnet and RailRunner South Africa (RRSA) signed an agreement on bimodal rail service that will create an end-to-end supply chain solution on South African market.
Wtihin a 20-year agreement with Transnet Ltd RailRunner’s high-density bi-modal trailers will be put into service on the Cape Corridor. RailRunner values the contract at USD 400 million in service revenues, and equipment sales by licensed third parties. The first use of RailRunner technology will be on the 1,400-km Cape Town to Gauteng line, targeted for launch in 2018.
The two companies intend to form a joint venture to explore, develop, and execute an integrated rail/road door-to-door solution for the African market. This joint venture will be in the form of a registered entity, in which each of the parties will hold a 50% shareholding.
This technology will be implemented in Africa for the first time on the Transnet rail network operated by Transnet Freight Rail. A bimodal service will offer customers a complete logistics solution on road and rail. The Cape (Cape to Gauteng) Corridor has been identified as a pilot route due to the flexibility and need for end-to-end solutions that this domestic market requires. This corridor integrates the long distance rail with the shorter first and last mile road legs that deliver cargo directly to a customer’s doorstep.
In addition, a privately owned operating company trading as “RNS” will also explore, develop, and execute an integrated road to rail door to door solution for the African market. The shareholding of this entity will be advised once negotiations relating to this shareholding have been completed. RNS and Transnet’s joint venture will compete in the market on an equal footing.
In line with Transnet’s Market Demand Strategy (MDS) this bimodal solution will realise Transnet’s strategy to get rail friendly traffic off the road and onto rail.
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