Inefficiencies at the Port of Durban aren’t only bad for trucking companies. They drive up the cost of doing business, raising prices and causing shortages. The bottom line? It makes South African exports less competitive and our countrymen poorer, writes Matthew Hattingh.
In May 2021 President Cyril Ramaphosa told parliament of the need to restore the country’s ports to competitive levels, saying it was critical to economic recovery.
Transnet, the state-owned logistics giant, has since presented an updated masterplan for the Port of Durban, which positions it as a modern, deep-water container shipping hub.
Dry bulk shipping would be relocated to Richards Bay and the navy shifted from Salisbury Island to a site at the current coal terminal on the Bluff. The move is pencilled in for 2024.
But these are only a few pieces of a much larger puzzle that must be put into place to achieve the more than threefold increase in container capacity the Transnet planners envisage.
To accommodate bigger container ships, berths and channels must be deepened and widened. Piers and wharves need to be reconfigured, machinery refurbished or replaced, container depots expanded, and supporting road and rail networks improved. The cost of all this work will be eye-watering – Ramaphosa mentioned a figure of R100-billion. But that’s going to take some doing to rustle up and timing will be an issue too.
Transnet’s latest port expansion masterplan envisages a much more rapid roll-out of container capacity than earlier plans, although as one harbour-watcher sees it, development would need to be in step with growth in market demand, so the masterplan must still be tested in detail. Planning approvals and environmental impact assessments would be needed too.
Even with the best will in the world, catching up on many years of underinvestment won’t happen overnight. And some headwinds can be hard to anticipate. In the more than 18 months since Ramaphosa’s speech, the Port of Durban has been buffeted by the Zuma riots of July 2021, tripped up by what Transnet called a “cyberattack” on its IT systems a week later, and closed and disrupted by the flood in April 2022. In October 2022, a 12-day strike halted operations.
Pepi Silinga, chief executive of the Transnet National Ports Authority, briefing MPs in June last year, said the masterplan would involve multiple phased investments, including container operations at the Point and Maydon Wharf.
Among the first big jobs on Transnet’s to-do list would be to bring in an international operator to run Durban Container Terminal’s Pier 2. Under the state-owned enterprise’s watch, the terminal has been running at well below its container moving capacity of 2,4-million 20-foot equivalent units. The aim was to raise capacity to 2,9-million.
The director* of a well-known Durban road freight company told KZN INVEST how turnaround times for their trucks calling on the terminal had stretched from about four hours in 1996 to an average of six now. This made it impossible to do more than a single trip to and from the port during a shift, tying up truck-trailer rigs, with a fixed capital cost of about R65 000 a month each.
On top of this, daily operating costs for a single truck quickly mount up. These include diesel, licence fees, vehicle and goods insurance, and the R1 200 South African drivers get for a 10-hour shift.
Once overheads are factored in, achieving a reasonable return on investment becomes a big reach, discouraging reputable operators and opening a gap for the less scrupulous who are accused of running overloaded and unroadworthy vehicles.
The director – whose company moves about 3 000 containers a month – told of instances of terminal staff playing the board game umlabalaba or braaiing on the sly when they should have been working (and in the face of a port fire ban); straddle crane drivers making the long climb down and up for lengthy toilet breaks with no one taking over in their absence; and a slot booking system that wasn’t up to snuff.
Anfield – an industry veteran who has worked in trucking and at the port, including for Transnet and its predecessors since 1973 – spoke of a “lack of urgency” among terminal workers and their managers. He mentioned slow shift changes and workers “finding” trivial problems on machinery to force a breakdown.
Compounding this, he said, Transnet prioritised its paying customers – the shipping lines – often at the expense of road hauliers (who work for the freight forwarders). When the terminal was short of manpower or working cranes to unload vessels and stack their containers, it cannibalised these from shoreside operations. Loading times have lengthened, Anfield said, but he conceded the port had grown much busier and ships bigger in the past 25 to 30 years.
It’s hard to confirm some of these claims, but research by the World Bank and IHS Markit, which named Durban among the world’s worst-performing container ports in 2020, speaks volumes.
In response to written questions and in a separate media release, Transnet said congestion had decreased at and near the port, and turnaround times had improved to “an average of 180 minutes” since it introduced its trucking booking system.
However, it noted: “There have been instances of … transporters booking off slots online that end up not being used, therefore creating a waste in the system.”
Transnet was considering penalties to curb abuses and was in “continuous engagement” with transport companies and industry organisations to tackle problems. It detailed a number of measures it had put in place since the strike to speed things up at the terminal, including methods of stacking, performance monitoring, and “mass evacuation by rail of import containers to back-of-port facilities”.
“It was still a challenge to maximise available resources and capacity in the evenings when the terminal is off-peak as most transporters preferred to work during the day,” said Transnet spokesperson Ayanda Shezi.
“Privatisation” is a dirty word in South African labour politics and Transnet has been at pains in earlier communications to stress it was seeking a “partner” to address such challenges and to provide “ongoing operational and commercial support” at the Pier 2 terminal.
In lofty terms, Transnet tells of its role as a “custodian of infrastructure”, but it’s plain the operator will be required to not only crack the whip at the terminal, but do the heavy lifting when it comes to finances.
In return for a 25-year concession, the operator will be required to modernise the terminal – something which neither Transnet (with its declining revenues, nearly 60% of spending committed to salaries and R129-billion in debt), nor its shareholder, the government, were in a position to do.
The new operator was expected to be announced “in the first quarter of the 2023/24 financial year”. Geneva-headquartered MSC, the world’s largest container shipping line, was among 10 shortlisted consortia bidding to run Pier 2 through its subsidiary Terminal Investment Ltd.
Giel Coetzee, a director of the Mediterranean Shipping Company (MSC) South Africa’s Logistics subsidiary, could not discuss difficulties at the terminal and how these might be tackled because the company was party to the bidding process. But, he predicted a “definite improvement” in efficiencies, regardless of who eventually wins the concession – “the only problem is it’s not going to be immediate”.