This Logistics Hub project, which is part of the Presidential Strategic Infrastructure Projects (SIP), involves a web of activities designed to ensure the efficient movement of raw material, intermediate inputs and finished goods between suppliers, manufacturers and consumers. This project is intended to improve customs clearance, where varying level of inefficient procedures delay shipments and increase import and export costs.
This project is further intended to leverage the strategic position of the Free State as the most centrally located land-locked province in South Africa, bordering six other provinces and South Africa’s largest industrial and consumer market in Gauteng. The town of Harrismith forms part of the N3 Corridor linking Gauteng, the Free State and KwaZulu-Natal. This corridor underpins what is referred to as the SIP2 project.
It carries 65% of the country’s freight between Gauteng and the Port Durban. The Harrismith Logistics Hub (HLH) precinct will consist of 1000 000m2 at the point where the N3 crosses the N5, a unique position available nowhere else on the N3 corridor. The project is intended to establish a distribution centre for the de-stuffing and break-bulk packaging of inland-bound cargo as well as for the consolidation of outbound cargo, as follows:
- Warehousing and distribution, freight forwarding, customs brokerage, transportation and supply-chain management services
- Domestic and international transportation management, customs brokerage and freight forwarding, supply-chain consulting, warehousing and distribution services
- Warehousing and distribution, air and ocean shipping, supply-chain management, dangerous goods
- Customs clearance of inbound and outbound cargo documentation, freight forwarding, break-bulk distribution and consolidation, in-transit warehousing, cross docking of cargo between road and rail.
The HLH will be supported by the manufacturing hub in Tshiame, 8km from the hub precinct. This facility will enable the relocation of entities in the manufacturing sector for export through the Durban harbour.
A business case is being developed which will determine the ability of the province to create cargo for export in the form of automotive parts, agro-processed and other finished goods in order to ensure the independence of the Hub from the N3 traffic.
Vehicle Parts and Accessories Distribution Centre (VDC)
The Free State is looking to recruit private investors in logistics services to establish and operate a Vehicle Distribution and parts and Accessories Manufacturing facility in its Tshiame Industrial Estate outside Harrismith. This project is intended to ensure that the Free State, and in particular the Eastern Free State, positions itself as the fourth vehicle distribution hub in South Africa after Gauteng, the Eastern Cape and KZN. This will also ensure that the Free State leverages its strategic position as the most centrally located province in South Africa. Studies by logistics integration service providers have indicated that the Free State has the best potential to be a warehousing and logistics centre due to its proximity to the Gauteng market and links through N3 to the Durban port and Coega through the N6.
The VDC will consist of a bonded area operated by customs where new imported vehicles will be exempt from paying import duties until the vehicles are ordered by a customer or dealership. This is intended to improve the cash-flow position of vehicle manufacturers. The critical aspect of this project is to secure the declaration of the VDC centre as a duty-free zone for newly imported vehicles until they are ordered or leave the VDC by the Commissioner of Revenue Services. After interaction with the sector, cross-docking services were added to the concept. The feasibility study has already been completed and the expected capital cost requirement is R600-million.