By Larry Claasen
The new facility’s train offering takes 80 trucks off the road a day, reducing congestion on the roads and in the port.
WHEN Titan Cargo CEO founder Sugan Naidoo first saw the massive derelict 100 000m² warehouse at Transnet’s Belcon inland port in Belville in 2020, he immediately understood its potential.
Although the warehouse was not in a great state, it had a 20km rail link directly to the Port of Cape Town, and Naidoo reasoned that there was an opportunity to move containers off the city’s gridlocked roads and rapidly through the congested port via its rail connection.
“Instead of running trucks into and out of the port, you can run trains with large amounts of containers.”
“This will decongest the port and the port precinct – Paarden Island – as a train would take 80 containers at a time. This means one train would take 80 trucks off the road.”
Knock on failure
Transnet’s inability to provide adequate services is one of the reasons there are so many trucks on the road and has compounded congestion at the ports and on the roads.
“The road infrastructure is not designed to handle articulated vehicle capacity, which hurts our road infrastructure. Our ports also are not designed to handle such large volumes of truck traffic.”
Taking over the warehouse also fits into Titan Cargo’s move to diversify its revenue stream. It started out about 20-years ago as a linehaul transporter, but in 2018, it opened its first warehouse facility and started offering end-to-end container logistics and handling.
Through the Belcon facility, it can offer a one-stop service for importers and exports from freight forwarding to container handling.
A long wait
With this in mind, Naidoo made an unsolicited bid in 2021 to lease the facility. Transnet said it liked the idea but said it needed to go through a formal competitive tender process. Later, it put out two tenders, one for leasing the facility and another for setting up a greenfield warehouse at the inland port.
In July 2022, Transnet announced Titan Cargo as the winner of one tender. Danish shipping and logistic group A.P. Moller – Maersk won the bid to set up a 10 000m² warehouse.
Though Titan Cargo had won the tender, it only took control of the facility on 1 March 2023 as it had to negotiate the terms of the 15-year lease with Transnet. After the negotiations were completed, it then spent R140-million on making the warehouse fit for purpose.
Already full
The substantial investment in time and money has paid off for Naidoo because, in less than a year, the facility is 75% full. The only thing preventing it from operating at full capacity is work still being done at the warehouse.
He says once this work is done, the warehouse will be able to handle 3 000 containers a month, and the total cost of redeveloping the warehouse will probably be about R200-million.
The facility currently transports 600 containers a month by rail. Titan Cargo has enough customer demand lined up to reach its 3 000 containers a month target within the next three to six months.
Aside from the convenience of getting their goods quickly to the port, Naidoo says the group’s customers also benefit from the “preferential terms” negotiated with Transnet.
Titan Cargo’s customers also gain by reducing their carbon emissions. This helps them when it comes to selling their goods in markets like the European Union, where strict environmental regulations require them to keep track of their carbon emissions.
The success of the group’s Belcon facility has already led Titan Cargo to consider expanding its operations there.
“We are already in discussions about that. We are looking at expansion. There is some real estate available to us in the same precinct. It’s part of the transaction, but it needs development. We will be developing that to increase our footprint.”
