Durban: The Durban harbour has been ranked by a World Bank report in the bottom three of the world’s 351 competent container handling facilities.
The other South African harbours battling low rankings in the report are Ngqura, Port Elizabeth and Cape Town.
Transnet, the parent company of the Transnet Port Terminals division, said it will be engaging the World Bank regarding the analysis contained in its inaugural report, and the areas of measure considered for the index.
The inaugural edition of the “Container Port Performance Index 2020: A Comparable Assessment of Container Port Performance” (CPPI), was produced by the World Bank with external assistance from IHS Markit research enterprise.
The report was based on two different methodological approaches. In terms of the administrative approach, which considered knowledge of experts, Durban ranked lowest at number 351, with Marseille (350) then Ngqura (349), Port Elizabeth (348) and Cape Town at 347.
On the other hand, with the statistical approach, which looked at infrastructure and operations, Ngqura was ranked at 351, Luanda (350) and Durban (349), Port Elizabeth (348) and Cape Town at 347, the report shows.
Ports that had failed to attract a minimum of 10 valid carrier calls over a six-month period before the time of the survey were not considered in the research as they were deemed under-qualified.
According to the report, the two top ranked container ports are the Yokohama port in Japan, followed closely by Saudi Arabia’s King Abdullah Port.While East Asia ports generally dominated the top 50, several ports in the Middle East and North Africa ranked higher, leaving Durban and Ngqura jostling for the tail-end 349 and 351 – based on the two survey approaches followed.
The first inaugural edition of the report used data until the end of June 2020, and while the ranking reflected the performance over the previous 12 months, “a qualifier is raised to reflect the impact of the Covid-19 pandemic on port performance in the first six months of the year”.
At position 93 (administrative approach), Djibouti was the best performing port in Africa, while Mombasa, Walvis Bay and Maputo were ranked ahead of Durban and South Africa as a whole.Kenya’s Mombasa port was the most technically efficient in the Eastern Southern African region, ranking as the 43rd most efficient container harbour in the global sample. At this regional level, Dar es Salaam and Durban followed at 64th and 70th positions, respectively.
The analysis also revealed that the main factors to drive higher efficiency included the presence of at least one specialist terminal operator, the existence of a rail connection to the port, the existence of transhipment traffic and reduced time at berth.
Master mariner and director at Norton Rose Fulbright, Malcolm Hartwell, said despite several initiatives having been employed to save Durban since alarm bells first rang about 20 years ago, the performance continued to sink.
The decline of Transnet Freight Rail, which used to carry 80% of the containers but now carried 20% to and from Durban, was a contributing factor, said Hartwell.
“This problem has been exacerbated by a lack of investment in upgrading the rail lines and introducing bigger and better trains.
“There has been talk of a high speed rail link, and a comprehensive analysis of the N3 corridor has demonstrated that this would be preferable to further attempts to widen the N3 and, in addition, it would be appropriate to build a dedicated truck highway to and from Johannesburg,” he said.
He added other factors included “the sway that labour unions hold over the state-owned entities, a lack of capacity within the state-owned entities, a diversion of much of the revenue generated by the port into other divisions of Transnet”.
Although a politically motivated refusal to rely on privatisation to cure some of these ills had been a factor, Hartwell said, that had changed in the last year with open talk of public-private partnerships.
Professor Irrshad Kaseeram, an economist based at the University of Zululand, said the port, together with the access infrastructure to the inland via rail and road, comprised a critical conduit to the global value chain that needed to operate efficiently.
“It’s critical that the South African ports adopt new technologies, increase digitalisation and encourage industry stakeholders to work collectively toward efficient performance of the whole system,” said Kaseeram.
An efficient port performance required the availability of sufficient draught, quay and dock facilities, with quality connections to competitive road and rail services, and the efficacy of the procedures employed by the public agencies involved in container clearance.
“Inefficiencies or non-tariff barriers in any of these factors will result in higher costs, lower competitiveness and weak trade. Researchers have shown that optimal efficiency in these respects can increase international trade by 25%,” he said.
The Durban Chamber of Commerce and Industry said despite Durban being low ranked, the business community remained confident that ongoing interaction with the ports and the government’s leadership would translate into positive results over time.“As organised business, we believe the Port of Durban remains a key asset. It’s the largest and busiest shipping terminal in sub-Saharan Africa and strategically positioned to serve the country’s largest manufacturers given its direct linkage with the N3 corridor,” said chief executive Palesa Phili.
Transnet said: “There are no calculations presented and there is a disclaimer in the beginning of the report stating that the World Bank does not guarantee the accuracy of the data included in this work. It appears that the data was analysed between January and June 2020. South African ports were in lockdown for 30% of this time.”
Transnet said established industry reports and studies, some from the World Bank itself, had a correlation that the inaugural report did not have.
“These include the World Bank Logistics Performance Index (LPI), Ease of Doing Business, Port Development and Competition in Eastern and Southern Africa, Lloyd’s List Top 100 Container Ports, UNCTAD’s Liner Shipping Connectivity Index and Price Waterhouse Cooper’s Analysis of Port Development in Sub- Saharan Africa.”
Transnet said South Africa was currently ranked 33rd in the world in terms of competitiveness on the World Bank LPI out of 160 countries. The 2020 edition of the Lloyds List ranked Durban as the 72nd biggest container terminal in the world out of a surveyed 350, ten places down from 2019.
Issues of port congestion and under-performance had seen reports such as the World Bank’s Ease of Doing Business and the Trading Across Borders – rank South Africa at 84th and 145th respectively, out of 191 countries surveyed.
Transnet said overall the rate at which South Africa had invested in its ports’ infrastructure and port terminals’ equipment over the past ten years, was far below that of growing North African countries like Egypt, Morocco and Djibouti on the East Coast.
“These countries have been investing in excess of US$10 billion each during this time. The introduction of the Port of Durban Master Plan will see an investment of over R100 billion over the next 10 years starting October 2021, creating much needed capacity that will enable Durban to increase volumes and also handle transshipments. Transshipments are a growing global trend in sea freight that North Africa has taken advantage of, one with increasing volumes year on year.”
It said the index came at a time when South Africa was conducting its own analysis, representative of all stakeholders in the logistics network following a record year in exports across varying commodities including manufactured goods, agricultural goods, automotive and minerals.
“Initiatives like the setting up of the Port of Durban Decongestion Task Team where Transnet has been working with customers and port stakeholders for over a year now, have resulted in tangible outcomes influencing the movement of cargo.
“These include the introduction of the truck booking system and the soon to launch Cargo Connect – a digital platform that will improve landside logistics and give cargo owners visibility across the supply chain.
“All outcomes will be replicated across other port terminal operations.”
Transnet said it had invested in improving port performance through its current revisions to its operating model in container terminal operations, as well as targeted improvements in handling equipment.
“In container handling, Transnet’s strategy is to partner with an international terminal operator at the Durban Container Terminal Pier 2 to dramatically drive performance improvements.
“In addition, Transnet will facilitate new container terminals operators at Ngqura and a new 1.7 million TEU Point Container Terminal at the Port of Durban.”