The Johannesburg to Durban route is the busiest economic corridor in the country and Harrismith is right in the middle. Harrismith also links in a star-like formation with other major economic cities such as Bloemfontein, Klerksdorp, Maseru and Richards Bay.
As a result, the Maluti-A-Phofung local municipality and Harrismith are well situated in terms of freight volume movement through the area. The Harrismith Logistics Hub will be able to provide valuable value-added logistics services to the freight volumes originating within the area as well as a proportion of freight movement through the town to other destinations. The HLH will be able to service surrounding areas logistics requirements. International freight flows coming in from the Durban coastal port is distributed to the rest of South Africa, largely by trucks and containers. The HLH will be able to provide value-added logistics services to freight volumes destined for those areas surrounding Harrismith and the Hub. These value-added services might include stuffing/de-stuffing and freight clearing and forwarding.
The core focus and infrastructure of the HLH is focused around a container handling terminal with a number of peripheral services being offered on the fringes (i.e. bonded and free standing warehousing, stuffing and de-stuffing of containers, etc.). One peripheral service which was strongly highlighted by logistics service providers is the potential viability of distribution centres for national retailers at the hub.
Harrismith is ideally located to ensure speed-to-market for products imported through Durban port. Currently, the majority of containers are transported by road deep into Johannesburg from which the contents are unpacked, repackaged and distributed to the various retail outlets. Instances exist where goods are transported to Johannesburg only to be distributed back to areas in the Free State or Mpumalanga provinces. A distribution centre at Harrismith will provide these national retailers with a location which could decrease the cost of transportation. The concept of a distribution centre in Harrismith will allow a national retailer to either transport imported goods via road or rail into the Hub. Goods can then be unpacked, repackaged and stored as inventory in designated warehouses prior to being distributed to the various outlets. With its central location, the distribution centre will be able to make its deliveries within 12-24 hours to the major city centres in Gauteng, Free State, Kwa-Zulu Natal, and Mpumalanga.
Stakeholders have indicated that national retailers would consider moving their distribution centres out of the Johannesburg area for two prominent reasons which will contribute to increasing costs:
1. The high congestion on Johannesburg highways.
2. The implementation of e-tolls in the greater Johannesburg area.
Johannesburg highways are notorious for bumper to bumper traffic during the morning and afternoon peak times. Cargo coming into Johannesburg from Durban is frequently caught in traffic during peak times. This increases the number of hours spent on the road, the amount of fuel used and wear on the trucks’ mechanical parts. All these factors lead to increasing transportation costs.
The implementation of e-tolls on the greater Johannesburg highways will add to the already high costs of transport into City Deep and the surrounding areas. E-toll is an electronic toll collection system which has been rolled out since 2013 on many of Johannesburg’s busiest roads. The cost in movement of imported goods into, around and out of Johannesburg will significantly increase once the process is completed particularly the goods entering Johannesburg from Durban and then distributed back towards the coast.
Harrismith’s location provides an opportunity for national retailers to mitigate a proportion of the costs outlined above. Logistics companies will be able to plan their departure times from the distribution centre in Harrismith as to either enter Johannesburg prior to peak times or immediately following the morning and afternoon rush hours. These companies will also be able to reduce the double cost of tolls on goods entering Johannesburg and then distributed back towards the coast. Inventory can be stored in Harrismith and only traffic destined for the Johannesburg area will be subject to tolls whereas traffic to the rest of South Africa will not be subject to e-tolling costs.