Coal imageMining giant ArcelorMittal South Africa (AMSA) plans to migrate the transportation of some of its products from road to rail.

As a result, on Friday it launched its Isando Distribution Centre in Johannesburg which will be instrumental in the company’s initiative to decrease the transportation of cargo on South Africa’s road network.

AMSA said its move to transfer more of its cargo to rail was in an effort to preserve road infrastructure and improve the level of safety for road users.

“The migration of cargo to rail will result in significantly reduced carbon emissions, and related socio-economic and environmental benefits,” the company said.

When the new distribution centre is operating at full capacity, it will result in an annual reduction of about 40,000 truck trips across the country’s road network.

The centre has been developed specifically for AMSA by Barloworld Logistics. It is designed to receive some 700,000 tonnes of steel products per annum by rail, primarily from the company’s production facility in Newcastle.

According to AMSA, products will be stockpiled at the distribution centre and then distributed to customers in the Gauteng area.

“Enhancing customer satisfaction through reliable and efficient deliveries played a key role in ArcelorMittal’s decision to locate the distribution centre in Isando,” AMSA said.

The centre will be launched in conjunction with Transnet Freight Rail, Barloworld Logistics and Grindrod Intermodal.

AMSA said that Transnet Freight Rail was a key partner in the success of the distribution centre through its Market Demand Strategy (MDS). Through this strategy, Transnet worked with AMSA to design appropriate rail solutions that would support road volumes on rail.

Barloworld Logistics was appointed by AMSA to manage the rail flows from the company’s production centres through to its arrival at the distribution centre. Transnet Freight Rail has come on board to extract efficiencies from the rail system and lower the costs of logistics, and Grindrod Intermodal was selected to operate the distribution centre due to their steel handling experience.

AMSA said that to date, more than 50 new jobs have been created through the establishment of the distribution centre and more positions will be created when volume increases at the centre.

The opening ceremony was hosted by the mining company’s CEO, Wim de Klerk.