Trade and infrastructure

World-class ports and harbours drive southern African exports and trade

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The importance of the role played by ports and harbours in the socio-economic life of the nation cannot be overstated.

In the words of researchers G.S.Dwarakish and Akhil Muhammad Salim in their article "Review on the Role of Ports in the Development of a Nation", “The higher the throughput of goods and passengers year-on-year, the more infrastructure, provisions and associated services are required. These will bring varying degrees of benefits to the economy and to the country. Ports are also important for the support of economic activities in the hinterland since they act as a crucial connection between sea and land transport. As a supplier of jobs, ports do not only serve an economic but also a social function. In terms of load carried, seaway transportation is the cheapest and most effective transportation system compared to other systems. Industries require a safe and cheap means of exporting finished goods and importing raw materials. Hence the majority of industries in the world are located in the coastal belts, in the vicinity of major ports. These industries in turn, influence the lives of the employees and indirect benefactors.”

Southern African commerce and industry benefits from world-class port and harbour infrastructure backed by hard-working freight rail in South Africa and Namibia. The benefits of continued investment and partnerships are already reaping numerous benefits, with many more to come.

Expanding exports

By working smart with ports and harbours, the Ford Motor Company of Southern Africa will be able to expand its vehicle export operations.

Currently, all of Ford's incoming and outbound vehicles are processed through Durban Harbour's Roll On Roll Off (RORO) Terminal, South Africa's primary import and export hub for most original equipment manufacturers (OEMs), importers and distributors. Now, the adoption of a multi-port strategy will enable Ford to make the first shipment of 1 000 locally assembled Ford Rangers from Port Elizabeth to markets in Europe.

"We are experiencing unprecedented demand for the Ford Ranger around the world, and have invested over R3-billion in the recent expansion of our production capacity in our South African operations to fulfil these orders," said Ockert Berry, VP Operations, Ford Middle East and Africa, in a media statement.

"Together with Transnet, we evaluated how a multi-port strategy could benefit both parties by improving the use of current assets, reducing costs, avoiding the ongoing congestion in the Durban Terminal and utilising other ports for imports and exports," Berry stated.

To facilitate this process, Ford has broadened its outbound logistics portfolio to support the multi-port strategy for Port Elizabeth, and will be shipping vehicles twice per month to various receiving ports in Europe.

The Ford Rangers, which are produced at Ford's Silverton Assembly Plant in Pretoria, are being transported to Port Elizabeth using Transnet Freight Rail infrastructure.

Traditionally, Port Elizabeth-based vehicle manufacturers transport units to Gauteng by rail, and these rail assets return empty. Ford will now be using the return leg to move export vehicles from Silverton to Port Elizabeth for shipping to selected markets around the world.

"This will assist us in making the shipping and delivery from South Africa more cost effective, efficient and faster," Berry added.

Rajesh Dana, Port Manager, Port of Port Elizabeth said: "The Transnet National Ports Authority is extremely excited at the launch vehicle volumes that Ford Motor Company will be processing through our port. The high number of these launch volumes further provides the Transnet operating divisions the opportunity to ensure that our OEM partners experience world-class facilitation through our port. Of further importance is the role that this operation will play in the long-term strategy of the port becoming an Automotive Hub."

Partnering for development

The Port of Cape Town is due for a new lease on life with the construction of a R98 million floating caisson for the Sturrock Dry Dock in the Port of Cape Town announced in February after intensive conversations between DEDAT, Wesgro, industry and strategic partners with Transnet National Port Authority (TNPA) around discussions for improving the port’s infrastructure.

The new caisson forms part of a multimillion rand overhaul of the port’s ship repair facilities over a three-year period (2019-2022) under South Africa’s Operation Phakisa Programme, which has identified ship building and repairs as a strategic industry for the port.

According to a Transnet statement, the caisson is a large steel gate structure that acts as a secondary seal and subdivides the dock, allowing for the simultaneous docking of multiple commercial vessels within the facility. The old, defective caisson had been out of commission since December 2016. The 74-year old dry dock was first commissioned in 1945 to repair American and British war vessels. Refurbishment cost TNPA R2.7 million and covered a condition assessment and finite element analysis, as well as stabilisation of the old caisson prior to the new one being introduced.

“The introduction of a caisson that can now allow for multiple docking of commercial vessels allows for Sturrock Dry Dock to significantly increase ship repairing capacity, which will facilitate job creation. The total value of turnover of provincial ship repairs in 2016 was estimated at around R2.2 billion, revealing the potential for significant economic gain to the province through investment of updating the dock facilities,” Wesgro CEO Tim Harris said in a statement.

Mr Solly Fourie, Head of Department Economic Development and Tourism further explained: “Trade is the life blood of the economy. R 1.73 billion of goods enters and leaves South African ports every year. About 30 000 ships passes South Africa’s coastline annually and 12 000 of them make calls into our ports. Many of these vessels require services like repairs and maintenance which represents a significant opportunity for jobs. The marine vessel fabrication, repairs and maintenance employed 10 280 people in 2017. A constraint to job growth in this sector is a dearth of suitable infrastructure to service these vessels. The Western Cape Government welcomes and appreciates the R 98 million budgeted by the Transnet National Ports Authority (TNPA) for the construction of the floating Caisson in the Sturrock Dry Dock at the Port of Cape Town. This investment by the TNPA will facilitate the creation of hundreds of direct and indirect jobs required to service vessels in the port.”

A magnet for investment

New investment agreements signed by the Saldanha Bay Industrial Development Zone bring the total number of signed investors to eight and investment value to over R3 billion.

International stakeholders from the United Kingdom, Europe, the Middle East and Africa as well local companies are investing in a variety of fabrication workshops for steel and other metals, equipment and marine repair facilities, oil lubricant and fuel plants, as well as specialised engineering services, with construction to start between March 2019 and March 2020, according to a report by the South African Government News Agency.

“The investments signal a significant start of establishing new industrial value chains in and around the Port of Saldanha.The Saldanha Bay Industrial Development Zone is part of the dti Special Economic Zones Programme and is developing into a world-class offshore and maritime hub,” said Minister Rob Davies.

Most of the major land-based infrastructure and some of the marine infrastructure has already been established. Now the zone’s partnership with Transnet National Ports Authority begun on the design and commercial work required to expand the infrastructure offering, with additional port facilities.

The market value proposition includes a free port model for optimal operational ease in a sector where logistics efficiency and certainty are at a premium.

“The Saldanha Bay IDZ’s investment pipeline includes at least five more investments that are close to conclusion.

“If these are realised, they will add another R2.4 billion of investment to the short and medium term outlook of the zone. The total investor pipeline includes around 40 additional interested companies in various stages of engagement,” Davies said.

The Western Cape government and the dti have partnered with the Saldanha Bay Municipality and larger companies in the West Coast to start building the ecosystem for localised procurement and small, medium and micro-sized enterprises support as a result of the opportunities posed by the new value chains.

Freight into Africa

Namibia's eagerly anticipated new container terminal at the coastal town of Walvis Bay is set to be commissioned on 1 August 2019. The container terminal, which is 96% complete, being constructed on 40 hectares of land reclaimed from the sea by China Harbour Engineering Company (CHEC).

Upon completion, the terminal will increase the container handling capacity from 350 000 to 750 000 containers a year.

According to Namport Manager of Corporate Communications Tana Pesat, construction has reached the final stages where the construction workers are just working on the final touches, reports Hellenic Shipping News.

“We are on schedule and in the final round of construction. This is a big project that the whole country is looking forward to,” she said.

Construction began in 2014, with $300 million (R4 500 000) in funding stemming from the African Development Bank.

By trebling its container handling capacity, the port will boost Namibia’s already impressive performance in terms of facilitating regional trade. All Africa reports that according to the recently released first-ever Annual State of Logistics Report for Namibia 2018, commissioned by the Walvis Bay Corridor Group (WBCG) with the support of Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), 93.1% of total cargo (gross tonnage) transiting to and from the neighbouring countries in 2017 went through the Port of Walvis Bay handle. Zambia, Angola, Democratic Republic of Congo, Botswana and Zimbabwe are the main markets for transit cargo by volume, with Zambia identified as the dominant market for transit cargo among these countries, accounting for 51.8% of all inbound transit cargo via the Port of Walvis Bay in 2017, up from 47.9 percent in 2016, representing a 50.9% increase in the volume of imports to Zambia. Exports of Zambian copper and wooden exports accounted for 85.7% of total outbound transit cargo by volume (metric tons), up from 72.5% in 2016. The report also reflects that some 1.2 billion tonne-kilometres of cargo are moved by Namibia's track railway network annually. However, road freight still accounts for more than 80% of total tonne kilometres of goods.

Port User Association chairperson Pillar Veiga told the Namibia Broadcasting Corporation in January that the new container terminal calls for greater efficiency, increased collaboration across the value chain and the embracing of new technology.

“There is much to do. We are looking at strengthening the cooperation, digitalisation of systems, cranes and how we move. We need to keep up with new technology and we look into digitalisation and robotics. Remember, we are living in a competitive world and we have to benchmark with other ports. The better we are the better we will make it," said Veiga.

Richard Valentine

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