It was hard to imagine that SA’s container ports could fall any further in the global rankings but fall they have. The latest World Bank container port performance index ranks the Cape Town port at rock bottom of the table of 405 ports, with the port of Ngqura just one notch higher at 404 and Durban at 398.
The index measures the time container ships spend in port to on or offload their cargo and while we know SA’s container ports are underperforming badly, the World Bank offers no clear reason they are ranked so far below even other underperforming ports on the continent.
The methodology of the survey bears careful scrutiny. So too does the timing. The evidence is that the ports of Cape Town and Durban are doing better than they were late last year, with the number of ships waiting at sea down significantly. Transnet and the private sector shippers who have worked with it to address the crisis deserve credit for making at least some limited progress.
However, the World Bank index is designed to give container port operators, shipping lines, and customers a yardstick by which to measure, and ideally improve their performance. And regardless of whether SA’s rankings are precisely accurate or not, there is a clear message in the survey that needs to be heard and acted on.
As the World Bank puts it: “Container ports are crucial nodes in global supply chains and essential to the growth strategies of many emerging economies,” says the study. “In numerous cases, the development of high quality of container port infrastructure operating efficiently has been a prerequisite for successful export-led growth strategies.”
We shouldn’t need the World Bank to tell us that and indeed, turning around the efficiency of SA’s ports and investing in their infrastructure is high on the government’s list of priority reforms to boost the economic growth rate.
Business and the government are working together through the national logistics crisis committee to tackle the crisis. So too is Operation Vulindlela. And under the new leadership installed last year, Transnet itself is working to improve its operations — as well as to implement the private participation that the government has targeted as a crucial fix.
Without substantial investment in new and replacement infrastructure, the container terminals at Durban, Cape Town and Ngqura can achieve only so much improvement. The funding for that infrastructure has to come from new private sector container terminal operators with the balance sheets to support this, as well as the global experience and expertise to fast-track efficiencies. It has been done around the world where private terminal operators such as AP Moller Maersk (APM) and Dubai Ports World have been running major ports for decades.
It can and must be done rapidly in SA. Transnet chose Philippines-based ICTSI in July 2023 as its joint venture partner to operate the crucial Durban Container Terminal 2, in a deal worth R12bn. But the contract still has not been signed and the decision has now been challenged by APM. The structure of the joint venture, put together under Transnet’s previous boss Portia Derby, is a questionable one that will see the terminal employees stay on the Transnet payroll, and Transnet retain a majority equity stake, even if ICTSI has operational and management control.
If this is not the optimal structure, Transnet’s board should not hesitate to cancel the deal, and ask the shortlisted bidders to submit a fresh round of bids with speed. If it is still going ahead, Transnet must waste no time in getting the new operators in and making it easy for them to start turning around the Durban terminal. And that must be followed in short order by private partnerships at Cape Town and Ngqura.
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