Global trends show a strong correlation between regional economic growth and developing regional hub ports as gateways to trade.
South Africa and Durban are strongly placed to provide massive gateway hubs such those that have developed in the rest of the world and are developing around Mombasa in eastern Africa. These hubs are competing with various ports in western Africa.
A very real question mark hangs over the ability of South Africa and Durban to deliver on this potential and prevent neighbouring countries seizing the initiative. To become a regional hub, Durban needs to expand significantly. Its port and supporting logistics industry are already suffering from the lack of corridor capacity into and out of Durban.
Positive signs are that the Transnet National Ports Authority (TNPA) has seized on the opportunities created and encouraged by Operation Phakisa to upgrade facilities across various ports, including Durban.
It has also invested heavily in technology like drone monitoring of wharfs, remote cargo-tracking systems and information portals. It has also sought to expand cooperation with the private sector to improve productivity while driving transformation of the port industries.
The stagnant local economy has put a dampener on these developments, and it appears that the prospect of a dig-out port in Durban has been shelved indefinitely. South Africa’s growth is several percentage points behind that of the liberalising economies to the north of the country and the prospect of massive investment in a new port in Durban appears remote.
To some extent this is being offset by the development of inland ports in the Cato Ridge area and along the N3 corridor. These developments will, hopefully, alleviate some of the current congestion in Durban. However, the only long-term solution is a massive upgrade of the logistics corridor into Durban either by development of improved road access, or by making rail a viable, competitive alternative.
Despite massive capital investment in gantries and straddle carriers, Durban’s container terminal is hampered throughout by poor productivity and by the reluctance of shipping lines to use rail transport for anything other than low-value containers.
Much has been written about the truck congestion in the Durban port and the only way this is going to be alleviated in the long term – which will allow Durban to grow into a regional and continental hub – is for Transnet Freight Rail (TFR) to provide a competitive, efficient and safe alternative to road transport.
The possibility of the proposed Transport Regulator forcing truck owners to charge more for their services to make TFR more attractive cannot be dismissed, but seems remote and is likely to be stalled indefinitely by legal challenges.
Advances in port technology, the development of automated systems and the power of big data have allowed many elements of the logistics chain to be automated in ports like Rotterdam. It would, however, be unfortunate if South Africa followed that model to improve productivity, given the massive unemployment and inequality challenges the country faces.
Although the technologies introduced by TNPA at Durban are welcome, we hope that this is not the start of an automation programme that will result in job losses. Unions and employees will have to work closely with the port to ensure productivity and that the introduction of technology creates opportunities for skills transfer and an upgrade of the work opportunities available to those employees.
In our view, logistics operators must increase the pressure on the port and government to upgrade productivity at the port as well as access to Durban. This will allow it to become a regional and continental gateway to the fastest-growing continent and to ensure South Africa does not lose this opportunity to a neighbouring state.