Port of Durban to be repositioned as a hub for the continent

The recent blockage of the Suez Canal by a major vessel presented a significant moment for South African trade.

The blockage, which saw some of the world’s largest shipping container companies redirect their vessels to the route around South Africa, disrupted trade activity and global supply chains for nearly a week, costing more than an estimated $9 billion (R128 billion) per day according to the World Trade Organisation.

The blockage also exposed the vulnerabilities of global trade flows, bringing to the fore the critical role of efficient ports that are able to respond to the needs of the current global trade ecosystem.

For South Africa, this has reignited the urgent need to expand capacity and improve efficiencies at our ports in order to boost the competitiveness of our economy and the broader South Africa Development Community (SADC) region.

Our ability to accommodate larger vessels has the potential to transform shipping patterns to position Durban and South Africa as an attractive trade destination.

Over the past few years, South Africa’s logistics performance has fallen behind its peers, thus there is a need to focus on enhancing competitiveness in logistics, as it has a direct impact on South Africa’s trade and export competitiveness.

Massive scope

For example, it is far cheaper to ship a container from China to Europe than it is to ship from South Africa to Europe, even though this is almost half the distance.

As far as South Africa’s competitiveness is concerned, this will present a renewed opportunity for the country to implement its economic strategy.

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The Port of Durban already handles 60% of trade to and from South Africa. By increasing its capacity to handle larger ships – those vessels with 15 000 20-foot equivalent (TEU) capacity, the port can be repositioned to serve the dominant southern hemisphere shipping lines.

The real benefit to South Africa is that the unit cost of inter-continental shipping will reduce over time (by as much as 20-30%).

The Durban Port Masterplan, a flagship project for Transnet, aims to position Durban as a globally competitive hub port, and to restore its status as the number one port on the continent.

Government’s Economic Reconstruction and Recovery Plan recognises the catalytic role infrastructure investment plays in reigniting the economy.

Transnet, which is mandated to assist in lowering the cost of doing business, enabling economic growth and ensuring security of supply through the provision of port, rail and pipeline infrastructure, must be a key player in this regard.

The need is evident

Completion of the project has been accelerated to the year 2032, from the initial projection of 2048 as per Transnet’s Market Demand Strategy (MDS). The acceleration of this massive infrastructure project is driven by the fact that the Port of Durban, ranked the third-best performing port on the continent, has limited capacity to deliver on this mandate.

On the continent, Port Tangier Med in Morocco and Port Said in Egypt have surpassed the Port of Durban in terms of ranking and performance.

The capacity constraints at the port have become more apparent in recent years. The port handled approximately 2.8 million TEUs in the 2019/2020 financial year, compared to its design capacity of 2.9 million TEUs.

In 2019/20, the port handled over 510 000 automotive units, versus installed capacity of 520 000 units per annum. The expansion plan aims to increase the existing capacity from 2.9 million TEUs to 11.3 million TEUs.

New layout

The masterplan will change the current layout of the port, focusing on creating new capacity for containers and automotives. Apart from the need to address the diminishing capacity, the plan takes into account that the port can only berth vessels at a depth of 12.8 meters, which falls short of the 16 meters required for vessels calling at the port.

The plan presents a number of opportunities and is aligned with a key government initiative, Operation Vulindlela – a government-wide approach through which a number of departments and entities are tasked to accelerate the implementation of structural reforms. One of the outcomes of Operation Vulindlela is to support operational improvement at Transnet, particularly in the terminal.

One of the major changes the Port Masterplan presents is the consolidation of the Port of Richards Bay as an industrial port.

To open up space in the Port of Durban, and make it a ‘clean port’, Transnet plans to relocate some of the dry and liquid bulk cargo to the Port of Richards Bay.

Old airport repurposed

The old Durban Airport site has been earmarked as an intermodal facility in support of the hub port. The site is currently being used to stage trucks as part of the decongestion programme.

In the medium term, the site will be used as an intermodal facility to support the hub strategy, with provision of container depots, automotive cluster, truck staging facilities and commercial and logistics.

The long-term plans include the development of the dig-out port once capacity is exhausted at the Port of Durban.

Meanwhile, a project at Cato Ridge (west of Durban along the N3 route to Johannesburg) includes the development of an intermodal facility, a ‘dry-port’ that will be driven mainly by the private sector working together with Transnet.

The Cato Ridge project will assist in decongesting the port and support the migration of freight from road to rail.

Another project, the Point Waterfront Development by the eThekwini Municipality, is aligned to the Durban Cruise Terminal development at AB berths in the Point Precinct in the port.

Once developed, the cruise terminal will ensure access to the port community and will change the face of the city and improve tourism. The Point Waterfront Development covers the area in the Point Precinct, which links the cruise terminal, and the strip along the Victoria Embankment right up to Wilson’s Wharf.

Rail logistics

Improving the rail logistics solution on the Durban to Gauteng corridor (NatCor) is critical to supporting the major developments planned for the Port of Durban.

Creating a competitive alternative to the dominant road supply chain is imperative.

Transnet is currently working with key stakeholders, including business and the city of eThekwini, and has made significant strides in implementing initiatives to decongest the area around the port.

It now takes 78 minutes for a truck driver to enter and leave a terminal at the Port of Durban. This is compared to three hours previously.

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Through the injection of the new terminal equipment – 23 straddle carriers – the Durban Container Terminal has managed to increase its working gangs in Pier 2 from 11 to 13 gangs and six gangs in Pier 1. The increase in the number of gangs means the terminal is now able to service more vessels and trucks, easing the flow of both water and land traffic in the port.

These are some of the improvements that President Cyril Ramaphosa reflected on during his visit to the Port of Durban early this month.

In October 2019, the president met with local businesses and port users who raised concerns about the performance of the port, particularly the truck congestion, waiting times for ships, berthing delays, anchorage times and poor maintenance of equipment.

Task team

The presidential visit in 2019 resulted in the Port of Durban Decongestion Task Team being set up – this is a multi-disciplinary stakeholder body made up of Transnet National Ports Authority, port tenants, Transnet Port Terminals, private operators, trucking associations, shipping forwarders, the Durban Chamber of Commerce, eThekwini Municipality, Department of Transport, Department of Public Enterprises and the exporters’ association.

The task team has been meeting on a regular basis to integrate the front and back-end planning of the port operations.

Key to the alleviation of congestion around the port precinct is the reintroduction of the Mandatory Truck Appointment System, led by Transnet Port Terminals. Since its introduction last year, the truck appointment system has reduced the number of hours truck drivers spend to collect or deliver containers.

Major changes have been introduced in the system. This includes the provision of the truck staging areas, as well booking and confirmation of slots before a driver arrives at the terminal.

The booking system is now used by a number of private terminal operators including bulk terminals and will soon be extended to operators in the Maydon Wharf precinct.

The Durban Container Terminal also received 23 straddle carriers as part of the overall R2 billion investment to replace aging equipment in the terminals across the country. The terminal now boasts 85 straddle carriers and is expecting the delivery of another 22.

For the country to realise what the president described as “a dream in the making”, significant investment is required, and quick, efficient implementation is non-negotiable.

Transnet will look to partnerships to enable the company to unlock the opportunities necessary to grow our economy, and position South Africa among the top trading nations.

Moshe Motlohi is the Transnet National Port Authority’s general manager for the Port of Durban.