The Nelson Mandela Bay Business Chamber (NMBBC) in the Eastern Cape has slammed Transnet's newly introduced truck booking system, saying it has resulted in huge logjams at the metro’s two ports — Port of Port Elizabeth and Ngqura — and called for the system to be scrapped.
A long queue of trucks waiting to enter the ports is delaying the shipment of exports and the dispatch of imports, mostly car components, hobbling businesses and costing the economy in lost foreign currency earnings.
The chamber, which has about 700 member companies, including the country’s biggest carmaker and the largest packer and exporter of citrus fruit, says the implementation of the new system has resulted in unintended consequences.
Unlike at the ports of Durban and Richards Bay in KwaZulu-Natal — the bottlenecks there are due to a lack of equipment, lethargy, poor management, and archaic infrastructure — the queues in Nelson Mandela Bay are a result of a truck-booking system introduced by Transnet two months ago, which comes with other cumbersome manual registration processes.
The Eastern Cape is home to some of South Africa’s largest auto manufacturers — VWSA, Isuzu, Chrysler Daimler (Mercedes-Benz), BAIC and recently Stellantis. The companies export much of their production but, more importantly, they require imported components to assemble the vehicles. Delays in exporting their products could cost them international markets as clients turn to more efficient and reliable suppliers.
The province also houses the Sundays River Citrus Company, the country’s largest packer and exporter of citrus fruit — a lucrative but highly perishable product.
The local business chamber said it warned Transnet about the possible unintended consequences of the new system even before it was introduced.
The system, which was intended to improve port efficiencies, has had the opposite effect ... A number of businesses have indicated that their customers in key markets are considering cancelling their export orders if these delays continue
— Nelson Mandela Bay Business Chamber CEO Denise van Huyssteen
Business chamber CEO Denise van Huyssteen told Business Times this week that companies are now forced to use Namibian and Mozambican ports, adding to their costs as they have to use road haulage to get their exports to either Walvis Bay in Namibia or Maputo or Beira in Mozambique.
“This new booking system rolled out at the Port of Port Elizabeth in October has caused extensive logjams and backlogs in shipping products to and from markets,” she said.
“The system, which was intended to improve port efficiencies, has had the opposite effect, impacting upon the viability of exporters and importers who are unable to get their products transported timeously. A number of businesses have indicated that their customers in key markets are considering cancelling their export orders if these delays continue.”
Van Huyssteen said the chamber approached Transnet in early September, urging them not to proceed with the new booking system until issues relating to its implementation at the Durban and Cape Town ports had been resolved.
She said the system allows bookings to be made only when containers are available, resulting in customers not securing slots. That has an immediate impact on the ability of businesses to get their goods in and out of the harbour.
“We are supportive of any measures to improve productivity but this cannot only be workable in theory but not achievable in reality. Our recommendation is that Transnet pauses the rollout of its new booking system at Ngqura later this month until such time as the issues relating to the Port of Port Elizabeth system are resolved,” Van Huyssteen said.
Mike Mabasa, CEO of naamsa/The Automotive Business Council, said in a phone interview the bottlenecks at the two ports in Nelson Mandela Bay were affecting ''everyone, even those not in the auto industry'.'
On the exports side, the auto industry was ''covered'' since they have a dedicated vehicle export terminal that made matters easier, he said.
''However, the problem is with imports. The auto industry imports a lot of components and that is where we are not spared. We have serious delays at the import container terminal as 61% of our vehicle components are imports, and that is where the industry suffers delays,'' Mabasa added.
Last year, the auto industry exported more than 300,000 locally built new vehicles, an 18% increase on the previous year.
Hannes de Waal, CEO of the Sundays River Citrus Company, which is based in Addo, outside Gqeberha, said Transnet needed to ''put its house in order''. Though the company hasn't been affected by the port delays so far thanks to the seasonal nature of their business, the newly introduced booking system was affecting the economy.
He said the citrus industry exports 165-million cartons of fruit annually, adding that would increase to 200-million cartons over the next decade. “My company produces perishable products. What will happen to the fruit if it stays in a truck at the harbour for days? That’s a massive loss and we can’t afford that,” de Waal said. The citrus industry contributes R13.2b to GDP.
VWSA, one of the country’s biggest vehicle manufacturers, said the berthing delays were “severely” affecting its supply chain and production.
“This week we had to cancel production due to parts shortages caused by the port delays,” said company spokesperson Andile Dlamini. “We are now working with port operations to offer support where possible. The delays come at a cost as we are now forced to airfreight cargo at a premium to meet production requirements. That isn’t sustainable.”
Transnet spokesperson Ayanda Shezi said in a written response to questions from Business Times that they consulted all the relevant stakeholders before implementing the booking system, including discussions NMBBC.
“We had a meeting with the chamber and we agreed to delay the implementation of the system at Ngqura until problems at the Port Elizabeth harbour were resolved. We have no record of a letter from the chamber asking us to scrap the system. We even trained our staff on how to use the system,” she said.
President Cyril Ramaphosa visited the port of Richards Bay on Thursday to get to the bottom of the crisis at the key coal export facility. He blamed incompetence and lethargy at Transnet Port Terminals (TPT) for the implosion of the port.
Ramaphosa’s visit came a week after TPT suspended cargo arriving at the port via road as a result of traffic congestion on the N2 due to trucks. The port is at the centre of complaints from TPT customers and the City of Mhlathuze which has threatened legal action against the port operator.
On Friday, Transnet said its top executives held a meeting with local businesses and other stakeholders to deal with issue.
It said acting group CEO Michelle Phillips directed port management to develop a comprehensive plan of action that will be in the interests of all stakeholders. Phillips said Transnet was prioritising measures to ensure that the rail network, which is crucial for the transportation of coal to the facility, is fully restored.
As part of the recovery plan, Transnet is also aiming to improve volumes at its Durban Container Terminals which handle 40% of South Africa’s port traffic.
Earle Peters, managing executive of Durban Container Terminals said on Monday part of the recovery plan at Pier 1 is to increase the number of containers handled daily to 1,500 from 1,200. At Pier 2 the plan is to ramp up processing to 4,000 containers a day over a three-month period from 2,500.
International shipping company Maersk has started a weekly feeder service to and from Cape Town via Mauritius as the city’s port battles with a 14-day delay to offload cargo.
