Transnet

Topics: Transport, Transnet, Mode of transport Pages: 18 (3954 words) Published: October 14, 2014
Introduction
Transnet is the largest and most crucial part of the freight logistics chain that delivers goods to each and every South African. Every day Transnet delivers thousands of tons of goods around South Africa, through its pipelines and both to and from its ports. It moves that cargo on to ships for export while it unloads goods from overseas. Transnet is fully owned by the South African government but operates as a corporate entity aimed at both supporting and contributing to the country’s freight logistics network. It aims at developing South African industry, reducing the cost of doing business, while at the same time operating efficiently and profitably.

Operations
Transnet operates and an integrated freight transport company, formed around a core of five operating divisions that complement each other. These are supported by a number of Company-wide specialist functions such as Transnet Projects which underpin the group as a whole. The new Transnet is made up of the following operating divisions: Transnet freight rail (formerly Spoornet – the freight rail division) Transnet rail engineering (formerly Transwerk - the rolling stock maintenance business) Transnet national ports authority (formerly the NPA - fulfils the landlord function for South Africa’s port system) Transnet port terminals (formerly SAPO - managing port and cargo terminal operations in the nation’s leading ports), and Transnet pipelines (formerly Petronet - the fuel and gas pipeline business, pumps and manages the storage of petroleum and gas products through its network of high-pressure, long distance pipelines)

PESTEL Analysis
In analysing the macro-environment of an organization, it is important to identify the factors that might in turn affect a number of vital variables that are likely to influence the organization’s supply and demand levels and its costs (Johnson and Scholes, 1993).

Figure 1.1 Pestel analysis

The analysis examines the impact of each of the factors on the business. The results can be used to take advantage of opportunities and to make contingency plans for threats when preparing business and strategic plans (Byars, 1991). Kotler (1998) claims that P.E.S.T.E.L. analysis is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The use of P.E.S.T.E.L. analysis can be seen effective for business and strategic planning, marketing planning, business and product development and research reports. P.E.S.T.E.L. also ensures that company’s performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985).

Political
The year 2004 was also a year in which the general election took place and according to Piper et al (2005), the event was conducive to the consolidation of democracy and was a positive one. However, significant problems were also revealed. Issues remain around the political knowledge, expectations and tolerance of the electorate, voter participation levels, political party strategies and, as perhaps is most widely noted, the overwhelming dominance of the African National Congress (ANC).

Economic
Much like the economic wellbeing of any country is cantered around its growth rate, South Africa's president at the time, Thabo Mbeki, was committed to tackling the problem of unemployment and poverty, hence the interest in seeing a dramatic increase in the rate of economic growths, mostly led by exports, Thompson jr et al (2011). According to Hanival and Maia (2008), since 2004, there has been an increasing focus on infrastructure investment, with Eskom and Transnet being in the limelight. Growth recovered significantly thereafter and has sustained an average annual rate of 5% since 2004. Amongst the individual sub-sectors, Transport, storage and communication, with an average real growth during the ten-year period to 2004 of 6,9%, proved to be the best performer...


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