1.

1 Background to the study

There has been rapid growth in Africa’s transport logistics sector in general and South Africa’s
in particular. The growth in South Africa’s freight transport sector is driven by two major forces:
private consumption and the mining sector that has made this development very short and dynamic.
This is evident in the evolution from the use of ox wagons in freight transport in the early years to
construction of railway and rapid expansion of road transport.

The importance of freight transport was reinforced in that, all the early freight transport initiatives
were driven by private sector investors and businessmen who recognized that economic growth
and development was dependent on the availability of efficient freight transport. However, most
of these railways were later nationalised assets placed under official control.

From the takeover of the transport sector by the government between the period from 1910-1980,
the government controlled virtually all transport services in rail, road, air, ports and pipelines.
These services were managed by the Ministry of Transport Affairs, but were not part of the
Department of Transport. This nationalization of the transport sector led to monopoly in the supply
of transport services that many believe has slowed the development of the transport system of the
country and badly skewed national transport policy as there has be official support for the defence
of the SAR&H from private sector competition. This led to continuous search by the private sector,
miners, farmers and business owners on ways to develop their own transport systems on road in
spite of the official opposition to competition with railways. However, in 1985 the National
Transport Policy Study made recommendations to deregulate freight transport of both rail and road
to promote competition and increase the efficiency of supply of transport. The study also
recommended the focus and improvement of regulatory efforts on ensuring the quality of transport
operations.

Following the deregulation of freight transport, coupled with improvement in the industrial
process, there has been a shift in the organisation and shaping of international and domestic trade
patterns (UNCTAD, 1995). Due to these changes in trading patterns, there has been a
corresponding change in transport demand such as longer inland transport distance, shorter lead-
time with more reliable deliveries, new distribution network based on a reduction in the size and
weight of shipment and more frequent shipments and shipment tracking. In line with these, it
became imperative that a more efficient transport system be put in place.

In recognition of this need, the integrated freight movement was proposed in regional intermodal
movement and premium package services are necessary to integrate interprovincial with
international trade and also to make the best use of available modal transport operations.
According to Rondinelli and Berry (2000), the four driving forces for Multimodal Transport are
economic globalisation, speed-to-market product delivery,
agile manufacturing and business practice, and integrated supply chain management.
These subtle driving factors mirror the UNCTAD report (1995), which shows that
regardless of trade development, a continuum of network development is crucial
through transport integration with adaptive use of Multimodal Transport systems.
Referring to the Multimodal Transport literature in the area of Southeast Asian transport,
extensive work focusing on Indo-China and parallel research on Baltic trades has been
widely distributed (Carruthers, et al. 2004; Banomyong and Beresford, 2001; Rodrigue, 1996).
From shippers’ perspective, point-to-point transport is one of important
characteristics of Multimodal Transport logistics and containerisation has assisted to
improve the performance of modal transfer of general cargo at ports and terminals.
Nevertheless, Multimodal Transport is highly considered as a catalyst for removing
trade barriers, providing a model for achieving supply chain integration (Islam, et al.
2005).
Multimodal Transport has been a key source of strategic advantage for firms. Firms are
encouraged to understand the importance of material flow integration and how it is
linked to value creation, as a part of the firm’s objective (Whitehurst, 2005). In order to
create value, it is important for service providers to match the requirements of
customers with his or her capability to provide service. According to Rondinelli and
Berry (2000), values were added through Multimodal Transport infrastructure as an
integrated system managed holistically in logistics services. Value creation can be
emphasised through emergence of new capabilities such as production, distribution and
consumption mobility, geographical and functional integration, and economic
perspectives (Hesse and Rodrigue, 2006). However, as transport services become more
integrated through combinations of various transport modes, methods and networks,
their impact on values will become more complex. Services provided by Multimodal
Transport Operators would be very competitive across the industry and to secure their
customer base, establishment and understanding of subtle relationships is important in
strengthening performance (UNCTAD, 1995). Values provided by Multimodal
Transport Services must be shown by shippers on a regular basis and so must top
management within the organisation in order to maintain the desired level of
relationships (Lambert and Burduroglu, 2000).
As mentioned in the report of UNCTAD (1995), an extensive literature on value has
been circulated in the context of logistics and supply chain research. However, only a
small amount of research on behavioural dimensions, such as relationship, in
commercial decision-making has been carried out. This is especially true in the
Thailand where business transactions are often less transparent than in other areas of the
world (Banomyong and Beresford, 2001). Individual interpretation and evaluation of
service and value, rather than simple comparative cost, is often found to be decisive.
Multimodal Transport services such as provisional management, packaging,
warehousing, information and transport service within a supply chain are key
determinants of the competitiveness of a firm’s production process and ability to deliver.
With the increase of international trade in both finished and unfinished goods, issues
such as reliability, safety, security and frequency of deliveries have affected the modem
pattern of transport practices, which increasingly reflect a demand for more integrated
transport services (UNCTAD, 2003). Recent literature (i.e. Banomyong and Beresford,
2001; Rodrigue, 1996; Schijndel and Dinwoodie, 2000) shows evidence that, in the
context of Multimodal Transport, very little equivalent research on the behaviour
dimension in commercial decision-making has been found nor clearly defined. It cannot
be taken for granted that factors such as values and relationship provided by
Multimodal Transport are identical as logistics because it has different definition and
characteristics. These will be further elaborated in the proceeding chapters.
Inevitably, collaborative partner-relationships between shippers and operators have
received considerable attention in determining the effectiveness of Multimodal
Transport on performance. The term of ‘relationship’ in the context of transport has
always been a critical pillar in strategic business environment (Gibson, et al. 2002). An
extensive amount of studies has investigated the critical factors on the potential impacts
of relationships through efficiency, effectiveness, trust, flexibility, control, performance,
fitness and risk (Crosby, et al. 1990; Sinkovics and Roath, 2004; Athanasopoulou,
2009), as well as, different levels of relationships based on the various types of
magnitudes (Lu, 2003; Gardner, 1996). However, according to Athanasopoulou (2009),
there are no universally accepted frameworks for measuring relationships in the current
body of research. Therefore, it is important to understand the impact of relationship
within the Multimodal Transport environment.
In the Asian context, especially in China or other cultural-alike countries, the term
‘relationship’ is an ambiguous business concept, which exceeds more than just elements
of long-term business relationship or short-term transactions seen in the western context.
The term ‘Guanxi ’, briefly translated as personal connections / relationships, is deeply
embedded in the mindset of most Asian countries and in every aspect of their personal
and organisational interactions. Wong and Chan (1999) has describes Guanxi as another
type of relationship characterised by favour, trust and interdependence, which leads to
insider-based decision making in business transactions. This shows a difference
between Western and Eastern management systems in language and culture, which
were poorly conveyed in obtaining the full meaning and ubiquity of the Guanxi concept
(Davies, et al 1995). Guanxi is a continuous process requiring activities undertaken by
the parties in a relationship and cannot be completed without the active and reciprocal
involvement of both parties (Davies, et al. 1995). According to Lee and Humphreys
(2006), one of the main concerns facing investors in Chinese or cultural-alike countries
is the lack of stable legal and regulatory system and the need to rely on trust-based
personal relationship as a means of obtaining resources. Nevertheless, governed by
unwritten norms of reciprocity, Guanxi can be an effective tool to elevate business
performances (Buttery and Wong, 1999). In the context of Multimodal Transport, the
understanding of the impact of Guanxi on business performance is still lacking,
especially in the content of Thailand. With the rise of trade volume, an in-depth study
of Multimodal Transport and trade implementation behaviour using a quantitative
approach is very useful.

Chapter Two
Literature Review
2.2 Conceptual Framework
2.2.1 Integrated, Intermodal, Multimodal, or Combined Freight transport
These terms are related and used by different sources usually in an overlapping way.

According to Brewer, et al. (2001), intermodal transport is an integration of shipments across

modes.
An integrated movement of freight that involve at least two modes of transport under a single
through rate with a goal of providing seamless transport system from point of origin to final
destination under one billing and liability is known as intermodal transport (Brewer, et al. (2001).
Breda, et al. (2009) defined multimodal transport in the same way as an integrated transport system
involving at least two modes of transport and with a single document and liability.

Better insight on the definition of these terms was made by Milan Janic (2001) based on the
connotation given by European Union. According to the author, these terms are used under the
integrated transport system in general for which there is no generally accepted definitions. Janic
(2001) indicated that intermodal, combined, and multimodal transport are terms used generally
with freight transport. The author discussed definitions given by European Conference of Ministers
of Transport (ECMT), the European Commission (EC), and the United Nations (UN).
According to Janic (2001), a definition given by ECMT has distinguished the terms ‘intermodal’,
‘combined’, and ‘multimodal’ transports. Here are three definitions by ECMT (1998) as cited in
Janic, (2001).
 Definition 1: “Intermodal transport is the movement of goods (in one and the same loading
unit or vehicle), which uses successively several modes of transport without handling of the
goods themselves in transshipment between the modes”
Definition 2: “Combined transport is a transport in which the major part of the European
journey is carried out by rail inland waterways or sea and in which any initial and/or final
leg carried out by road are as short as possible”
Definition 3: “Multi-modal transport is a carriage of goods by at least two different transport
modes”

According to Ballis (2005), multi-modal transport is a system of transporting freight with a

minimum of two different modes of transport in an integrated manner; inter-modal transport on
the other hand is defined as a system of transport handing over one commodity with a minimum
of two different modes of transport but within the same packaging, without any break. He stated
packaging can be a vehicle itself/truck, a trailer or container. Ballis also defined combined
transport as inter-modal transport of which the European legs are essentially carried out by rail,
eventually inland waterways or sea, and initial or terminal legs, as short as possible, by road.
Article one of the United Nations Convention on International Multimodal Transport of Goods
(UNCIMTG,1980), defined international multimodal transport of goods as “the carriage of goods
by at least two different modes of transport on the basis of a multimodal transport contract from
a place in one country at which the goods are taken in charge by the multimodal transport operator
to a place designated for delivery situated in a different country.”

According to Kinlström (2003), intermodal transport is a term within logistics which is the
integration of shipments across modes. According to the author, the goal of intermodal transport
is to provide seamless transport under one billing and common liability on the whole movement
from origin to destination. Kinlström (2003) also noted intermodal transport as an alternative to
reduce environmentally hazardous emissions through use of lesser road transport. Kinlström
(2003) also raised the fact that intermodal transporting is attracting interests from many actors
including transport operators, politicians, engineers, and researchers resulted in many concepts and
definitions which needs to be used contextually.
Kinlström (2003) explained multimodal transport is characterized by essentially separate
movements involving different modes while intermodal transport is integration of shipments
across modes. Same explanations with Kinlström (2003) was noted by Brewer et.al (2001) and are
not the same on the definitions given to multimodal transport by the United Nations Convention
for multimodal transport of goods, by EC cited in Janic (2001), and by Ballis (2005). However,
Kinlström (2003) explained combined transport in the same way with Ballis (2005), combined
transport is intermodal transport of unitized cargo when the major part of the journey is by rail and
any initial or final leg is carried out by road.

In this regard, Janssen et.al (2008) also indicated that the increased attention to intermodal
transport, particularly intermodal freight transport is as a result of problems of road congestion,
environmental concerns, and traffic safety. The author noted that an increasing attention to speed
and agility in supply chain is a driving force for firms to reconsider usual logistics service and
intermodal is a result in transport logistics.

Panayides (2002), also defined intermodal transport in the same way as “the transport of unitized
loads by the coordinated use of more than one transport mode so that the comparative advantages
of each modes are maximized and the transport chain is guided as one unity”.
From these definitions, it is clear that these terms are used by different people at different contexts
mostly to say the same thing. The terms involve many concepts in common though lesser
differences in conceptualization/definition exist among authors, particularly on ‘multimodal’
versus ‘intermodal’. The involvement of at least two modes of transport, concern for environment,
single billing, single liability and integration among the modes are major issues and features that
attracted the attention of most authors. There is difference on these points conceptualization
particularly for multimodal transport of goods. For instance, Breda et al. (2009), Ballis (2005),
Janic (2001), and United Nations Convention for Multimodal Transport of goods defined
multimodal transport as transport system involving multiple modes, integrated movement, single
billing and liability. However, Brewer et al. (2001) and Kinlström (2003) defined multimodal
transport as a separate movement involving more than two modes but not integrated and not by
single billing and liability. The fact that intermodal transport involves same packaging without any
breaks and combined transport is the term used by EU member states with aim to use a possible
route that minimizes road transport as much as possible can be indicated as distinguishing features
of these transport systems. Therefore, in this study ‘multimodal’ and ‘intermodal’ transport is used
to refer to transport system involving multiple modes, integrated movement, single billing and
liability. This is because the concern of this study is on multimodal freight transport practice in
Ethiopia where the operational definition of the term multimodal is the same with intermodal
transport as it was made by some authors discussed above, i.e., as an integrated transport involving
single billing and liability.
A. Importance/Advantage of Intermodal Transport
The objective of intermodal arrangements is efficient and effective goods flow from one country
to the other for facilitation of both national and international trade. These are key arrangements to
development as no country can develop without trade and transportation is central gravity of
effective and efficient trade. Intermodal transport service gives combined responsibility for
transport activities under one operator with the responsibility of operator to manage and coordinate
the total activities from shippers’ door to buyers’ door.
The United Nations convention on international multimodal transport of goods (1980) stated that
its aim was to set international standard and rule of law that member states needs to follow in
facilitation of international multimodal transport of goods. The convention report states that all
state parties to the convention recognize points in relation to multimodal transport of goods
(UNCIMTG, 1980). Some of these points clearly reflect the importance of multimodal transport.
These include:
a. International multimodal transport of goods is recognized as a way of smoothing
systematic expansion of world trade,
b. The requirement of trade for smooth, economic and efficient multimodal transport service,
c. The attractiveness of guaranteeing logical development of international multimodal
transport in the interest of all countries and the need to consider special problems of transit
countries,
Though the points raised by this convention were important and appealing, the convention fails to
be ratified and today countries are using multimodal transport under their local laws and
contractual laws with other countries. The point here is that the convention clearly stated the
importance of multimodal transport.

The rise of international multimodal transport service is the result of its benefit over the segmented
mode arrangements. Many studies showed that multimodal transportation of goods saves both
money and time. For instance, Palmer and Degulio (1989) as cited in Hoeks (2009) indicated that
ten transportation days can be saved on cargo shipment from Far East to New York by using
multimodal arrangement over an all-water segmented arrangement routes.
Efficient transitions between modes, flexibility and possibilities for door-to-door service,
environmental advantage, and the possibilities of combining the advantages from separate modes
are noted to be advantages of intermodal transport system by Kinlström (2003). Similarly,
Panayides (2002) noted that intermodal transport system is a response to customers’ demand to
get one-window, integrated, just-in-time, efficient and all inclusive door-to-door service at
predetermined price.

Hoeks (2009) indicated that the use of multimodal transport has a benefit of enhancing
competitiveness of the freight industry as a whole through use of most efficient mode of transport
at each stage. The author explained the benefit of multimodal transport from legal point of view
and claimed these five major benefits of multimodal transportation arrangements: avoiding of
separate arrangements of contracting with many transporters, avoiding the hassle of the shipper
for placing goods at the right place at the right time for each of the contracting transporting
segments, avoiding the inconvenience of storing goods between different segments of the transport
stages when the segments don’t fit seamlessly, the negotiability of bill of lading of multimodal
transport arrangements to acquire a documentary credit from banks contrary to other consignment
notes such as road carriers notes which are not negotiable, and finally it avoids the difficulty of
assigning responsibility/liability in case of damage which may be complex under unimodal
arrangements with difficulty of identifying at which stage of the segment the damage occurred.
Janic (2001) indicated that intermodal transport has an aim of “demand-led” logistics chain with
high quality and cost efficient ‘door-to-door’ services for customers. The author also indicated the
utilization of transport infrastructure can be improved by use of integrated transport systems.

Janic (2001) discussed multiple importance of intermodal transport of freight. First, the fact that
MTOs use their own communication links and coordinate interchanges smoothly at transshipment
points minimizes time lost at transit shipment points; it also avoids the risk of loss, pilferages and
damages to cargo at transit points. Second, intermodal transport of goods provides faster transits
of goods from source to consumer; hence the long distance between origin of material and
consumer is now longer and longer with the time of the transport very much lesser as a result of
intermodal transport development. Third, modal integration also reduces the burden of
documentation and formalities as the issuing of multiple documentations and other formalities at
each stage of segmented transport of goods is limited to only one document and formalities only
with a single operator. Fourth, intermodal transport also saves cost, i.e., the efficient and systematic
linkage based operation of integrated transport operators make them to deliver the service at lower
cost than it could have been under segmented operations that involve huge individual overhead
which should have been covered by the customer. Fifth, the fact that intermodal transport
establishes a single agency relation to deal with transport operator in all issues related to the
movement of the goods that include settlement of claims for loss of goods, damage or delay in
delivery at destination increases the convenience for customers. Finally, Janic (2001) indicated
that multimodal transport also reduces the cost of export, i.e., the nature of integrated transport
operation which is efficient reduces the cost of exports and improves businesses’ competitive
position in international markets.

2.4.2 Intermodal concept and development in Ethiopia

Intermodal transport concept is just at its infant stage in Ethiopia. The system was started on
January, 2011 by Ethiopian Shipping and Logistics Service Enterprise (ESLE, 2013). The system
is 100 % under the control of the Ethiopian government. Multimodal transport system in Ethiopia
means when freight is transported between foreign ports and Ethiopian dry port under a single
transport rate, liability, and document. According to Fortune (2011), the multimodal transport
system was introduced with the aim of easily moving freight from port Djibouti on time. The
system was started after the issuance of Multimodal Transport Implementation Directive on July
2010. According to the source, the directive defined the multimodal transport system as “a system
where by transportation of goods is under a single contract but performed by more than two means
of transportation; the carrier is liable for the entire journey including the shipment’s delivery at
final destination; the transportation can be made by sea, rail, and trucks (roads)”. Fortune (2011)
stated that the directive made all shipments that belong to government to be transported through
Ethiopian Shipping and Logistics Service Enterprise (ESLSE) and to be delivered to dry ports and
warehouses authorized by Ethiopian Revenue and Custom Authority (ERCA). On the other hand,
ESLSE performance on multimodal system is not encouraging so far. Sources indicated that the
system is inefficient and ineffective yet. Report by Addis Ababa Chamber of Commerce and Sector
Association (AACCSA, 2012) indicated that many businesspersons spoke their frustration with
the multimodal transport of goods service by ESLSE. According to AACCSA (2012), on business
luncheon on December 31, 2012, at Hilton Hotel, many businesspersons spoke furiously on the
problem of multimodal freight transport system in Ethiopia. According to the report by AACCSA
(2012), many businesspersons believe that the major problem of the multimodal transport was the
monopolistic operation of the system by the government, lack of infrastructure, daring to engage
in operation by ESLSE without proper readiness, lack of experience, insufficient freight vehicles,
and procedures at custom terminals were among the problems raised in the luncheon. From the
chamber report, businessperson also forwarded their recommendation for the ESLSE authorities
who attended the luncheon. Opening the system to private sector/ liberalization, inviting foreign
actors, solving infrastructure problems are among the solutions forwarded. On the other hand, it
seems the government of Ethiopia also aware of the problem of implementing the multimodal
transport system by ESLSE. The government has accepted technical proposals from six
international consultants to improve the regulation of multimodal system in Ethiopia (Fortune,
2012).
2.2.3 Freight Transport in South Africa
The Moving South Africa (MSA) freight transport strategy for 2020 envisages that the transport
system will meet the needs of customers for sustainable, highly reliable and rapid transport services
at low systems cost through intermodal networks comprising road, rail, sea and air interchange
infrastructure.
The following is envisaged:
  A limited number of highly developed multi-modal transportation
corridors – between domestic centres and international destinations.
 Corridors must be connected to a limited number of highly specialized
ports – international container hubs, bulk ports, feeder ports and niche
ports.
 Lower density route lines must feed traffic into main corridors and
nodes.
 Efficient transfers between modes at the major ports and inland
terminals must be achieved.

The following strategic imperatives to support the above strategy were outlined by MSA:
(i) Building density in the transport system

(ii) Building economics of scale in the different parts of the transport system

(iii) Ensure sufficient investment to maintain quality of infrastructure and operations

(iv) Building capabilities in logistics

(v) Focus on the various modes to optimize their inherent advantage

(vi) Remove bottlenecks currently in the system

2.3.1 Container traffic: MSA East-West Ports Option

MSA has proposed the consolidation of international

container traffic through two container ports, as per 2.3(ii)
above, one each on the Eastern and Western seaboards of
South Africa. Hence traffic bound for Asia and the East
would flow through the East-facing hub which would be the
Port of Durban and traffic bound for the Americas and
Europe would utilize the Port of Cape Town as the West-
facing hub. Currently over 50% of vessels calling to South
Africa stop at three ports viz Durban, Port Elizabeth and
Cape Town. This increases the costs to the shipping lines,
which in turn is passed onto the cargo owners. Reducing the
number of ports of call to only one can enhance the
competitiveness of South African goods and also
substantially reduce delays (up to 5 days), which helps
goods to get to markets quicker.

MSA data analysis revealed that there are three opportunities

which are available to reduce costs to the customer:
(i) Reduce distance

(ii) Reduce the number of ports of call

(iii) Increase the average size of ships

Global shipping trends are moving in the direction of larger

ships, fewer ports of call and the use of hub ports to direct
traffic into feeder systems. Consolidation of freight along
specific corridors enhances efficiencies, utilization of the
corridor, and the price competitiveness of goods transported.
For South Africa to achieve consolidation it requires the
entire transport channel from inland to the ports to be
optimized to offer maximum advantages to the customer as
well as shipping lines. The inland freight system is already
largely consolidated and will add impetus to port
consolidation, hence the “East – West Port Option”. The
corridor approach is envisaged to yield savings of between
2% to 11% in costs and 3 to 5 days in transit time depending
on the use of designated ports by shipping lines. Benefits of
the corridor vision are summarised in Table 2.1 below.
Table 2.1 Benefits of the Corridor Vision
Maritime Inland
Build density Trade flow balancing raises Separation of core rail lines
around corridors prices by 18% to 25% from from branch lines reduces costs
2004. by 15% Investment in corridor
Reduction in multi ports freight network reduces vehicle
calls: 2% to 11% in cost and operating costs.
transit time
Appropriate use Increased vessel size Rail operational use of unit
of Models and decreases vessel costs by trains improves service
Modal 17% reliability
Economics of Feeder and specialized ports Road user charges for
Scale save from 3-5 days infrastructure and externalities
increase 0.5 to 1 cent per NTK
(Net Tonne Kilometers)
Improve Firm- Port investment, fixed Rail operational improvements
level vessel arrivals and operating reduce general freight costs by
Performance efficiencies eliminates 25% Road freight productivity
excess port delays improvements reduce costs by
25% Inland terminal
improvements improve service
reliability and reduce road
freight costs

Source: Moving South Africa – The Action Agenda Part 4.

The costs benefit analysis of the corridor vision proposed by

MSA shows that 95% of exporters will benefit from this
vision and that 5% will not. The 5% will end up paying more
for transport because by virtue of their location they have to
be connected by a feeder system to a hub port.
Lowering total cost viz transport, handling and storage creates cost
savings in the transport chain thus enhancing the price
competitiveness of goods. The benefits of cost savings must
then be spread among the various stakeholders. There has to
be an evolving system to continually enhance service
delivery and reliability to take customer needs into account.
In analyzing the export competitiveness of value-added
products it was found that 60% of the transport chain cost is
attributed to shipping which is currently charged at a
discount rate due to spare capacity on the backhaul leg. This
backhaul discount is projected to disappear within the next
5 to 7 years as tradeflows begin to balance, leading to higher
tariffs in the largest cost generator within the transport chain.

South Africa’s key lever in reducing shipping costs lies in the

configuration of its port system. As far as bulk exports are
concerned, existing flows are highly consolidated e.g. coal
at Richards Bay, and iron-ore at the port of Saldhana. A
consolidation strategy is also required for general cargo i.e.
to reduce shipping costs by reducing the average number of
ports of call by shipping lines.

Any port consolidation strategy must have the backing of

major shipping liner operators. They are an important part
of the decision making process to identify the major core
container ports and general cargo handling ports and the
competitive feeder services that would have to be developed
in order to maximize the benefits of consolidation. Such
 consolidation must achieve high levels of efficiencies and
lower costs.

The tenets of the MSA Strategy is based on best planning

practices and concurs with the requirements of Planning
Management of Port Development discussed under Section
2.9 of this study which further emphasizes the value placed
on optimizing investments and enhancing the competitive
pricing of value added export goods.

The “East-West” strategic option is therefore to optimize the entire

transport chain in order to reduce the total cost of
transportation by as much as 30% for some customers, in
particular for containerized import-export flows. These
actions must be delivered to reduce shipping costs as stated
above i.e. reduce distance, reduce the number of ports of call
and attract larger ships.

The following tables reflect the transport chain costs for the export and
import of containerized freight.

Table 2.2 TRANSPORT CHAIN COSTS FOR EXPORTS

Average 20 km 720 km 500 m 11 200 km

Distance 10% 17% 13% 60%
Portion of
transport costs Cross Inland Port at key Ocean
haulage and terminal and side transport
cartage trunk leg
Source: Moving South Africa – The Action Agenda Part 4.

Table 2.3 TRANSPORT CHAIN COSTS FOR IMPORTS

Average 20 km 720 km 500 m 11 200 km

Distance 7% 12% 13% 68%
Portion of
transport costs Cross Inland Port Ocean
haulage and terminal and transport
cartage trunk leg
Source: Moving South Africa – The Action Agenda Part 4.

From a rail perspective capital should be made available to

upgrade the key routes and nodes, which carry the majority
of freight volumes to assist densification and to achieve
economies of scale. Accelerated investment is required for
signaling systems, locomotive and rolling stock. Funds
spent here will reduce operating costs and increase
performance substantially. The level of funding for the
major railway corridors should be economically justifiable
i.e. linked to the amount of business generated by that
corridor. Savings from operational efficiencies must flow
back into the rail business units that generated them and
ultimately to customers in order to make their goods more
price competitive.

The supporting rail network (branch lines) that provide

feeder and distribution services are generally low-density
lines. MSA research found that 40% of the rail network only
carries 5% of its total tonnage. As lower density lines require
 lower fixed and variable costs to operate it would be prudent
to separate the supporting rail network from the core rail
operations since the lower levels of fixed and variable costs
could be employed to make the low density lines more
competitive with road transport. To achieve this it is
envisaged that operating costs of the branch lines could be
reduced by between 15% to 20% through separation by
means of concessioning or other bid processes.

From the above it can be seen that it is imperative for Rail to

enhance its network and densify freight volumes. The
corridor between Gauteng and the Bayhead Marshalling
Yard, which services the Port of Durban is a critical link to
the Gauteng hinterland and according to Spoornet is
operating well below capacity.

CHAPTER THREE

RESEARCH METHODLOGY

3.1 Introduction

This section present details of the research design, background of the case study, target population,
sample size and sampling procedures, instrument of data collection, method of data collection,
data analysis techniques and ethical considerations
3.2 Research Design

The researcher will adopt a correlational survey research design which often involves describing,
comparing as well as examining the relationships between variables under study. The reason for
adopting this research design is because: The design it often is useful in describing phenomenon
such as characteristics of the program “Politics Today” on channels television as well as the
characteristics of the sample selected, thus making the results statistically significant even when
analyzing the major variables in this research. Also, this research design allows the researcher to
examine the relationships between variables. This design allowed the use of various methods of
data collection like questionnaire, IDI, KII, check list and FGD which were adopted in this
research. This design allowed the researcher to report and describe the phenomena as they are.
However, for the purpose of this study three instruments would be used; KII and FGD would be
used.
3.3 Background of the case study

Channels Television is one of Nigeria’s independent and multiple award winning 24hrs news
channel based in Lagos and owned by John Momoh. In 1992, the parent company Channels was
incorporated which was a year before the Nigerian government deregulated the broadcast media
and in 1995 they commenced broadcasting

The primary focus of the station is to produce news and current affairs programs on major national
and some international issues. The Channel's mission is to act as a watchdog on governmental
activities and policies. Channels TV is the first and only thriving national TV brand dedicated to
the dissemination of news and stream its television programmes live for 24hours. Seven(7) years
ago, NN24 (Network News 24) commenced news broadcasting and posed as a serious competition
to channels TV, unfortunately, the company folded up after facing challenges from the
government.

“Politics Today” is a weekly show on Channels TV that analyses from political perspectives recent
significant developments and activities in the world of politics in and around Nigeria. The show
is anchored by Seun Okinbaloye, one of Nigeria’s renowned award winning broadcast journalists
who is known for his hardcore interrogation styles and ability to get information out of his guests
even when they prove difficult.

3.4 Study of the Population

The population of the study would include the owners and the crew of “Politics Today” program
on Channels Television who are sixteen (16) and all the major stake holders in issues of national
interest such as security officers, the clergies, the head of each of the three major ethnic groups in
Lagos, Political Analysts, media scholars and legal practitioners all of whom watch the television
program under study. It is obvious that this population is not definite and cannot be estimated.

3.5 Sample and Sampling Technique

Purposive sampling would be used to select 13 management crew members; two (2) top level
management crew members, five (5) mid-level management crew members and Six(6) low level
management crew members of the program “Politics Today” on Channels Television who would
be administered the structured interview. Also, the research would purposively select eight (8)
respondents for the focus group discussion; this people are selected based on their exposure to the
television program under study and the key roles they play in national integration. These people
include: a security personnel, a pastor, an Imam, the head of each of the three major ethnic groups
in Ikeja, a Political Analyst and a lawyer.

3.6 Research Instrument

This research will use two different types of instruments which include; Focus Group Discussion
(FGD) and Key Informant Interview (KII). The first instrument that will be used is Focus Group
Discussion (FDG) titled Focus Group Discussion for “Politics Today” Program and National
Integration (FDPTPNI) which will involve a security personnel, a pastor, an Imam, the head of
each of the three major ethnic groups in Ikeja, a Political Analyst and a lawyer. The FGD is meant
to primarily elicit in-depth information from the respondents based on “Politics Today” Program
and National Integration. The second Instrument used for this research is the Key Informant
Interview (KII) titled Key Informant Interview on “Politics Today” Program and National
Integration (KIPTPNI) for the purpose of collecting data, this instrument will enable the researcher
to cover more area that may not have been covered by the FGD.

3.6 Method of Data Collection

A letter of introduction and request for permission, explaining the purpose of this research and the
reason for administering the instruments on the selected respondents would be given to the head
of the crew of the program as well as all the categories of respondents that would be needed for
the FGD. After the permission is obtained, the researcher would use the two instruments; FGD and
KII to collect data. The research instruments will be administered directly to the respondents by
both the researcher and trained research assistants who assisted to ensure FGD and the KII are well
coordinated. The data will be collated and transcribed for the purpose of analysis.
3.7 Method of Data Analysis
Data analysis is a process of formalizing the information gathered so as to give meaning to such
data. Since the data collected is qualitative, qualitative data analysis approaches would be adopted.
The qualitative data gathered from the responses of the Focus Group Discussion and the Key
Informant Interview will be analyzed using content analysis.

3.8 Ethical Considerations

Before the commencement of the study, the consent of the respondents would be first obtained. It
is intended that they will be guaranteed the right to opt out of the study at any stage if there will
be reasons to do so. The confidentiality, privacy and anonymity of the respondents will also be
strictly observed. Such will be assured by avoiding the use of names and house numbers or any
other personal identity in identifying the respondents. Traditions, norms, customs, values and the
beliefs of the every respondent will also be respected in the course of conducting this study.