Ports for Africa

Competitiveness and capacity issues at South African ports are opening opportunities for Mozambique, Tanzania, Kenya, Djibouti and Namibia.

South Africa’s ports have been through tough times of late, diminishing their competitiveness in the region as the gateways of choice, not just for South African companies but also for regional trade. The country’s ports were ranked at the bottom of the 2020 Container Port Performance Index compiled by the World Bank, which measures the operational efficiency of such facilities around the world.

Cape Town was South Africa’s highest-ranked port, but was placed at a lowly 347 out of 351 ports surveyed. Durban was ranked 349 on the list, with Gqeberha at 348 and Ngqura right at the bottom at 351. This is a poor outcome for what used to be the most efficient ports in Africa, which led to their popularity in the region, despite the long distances involved and attendant security issues and costs.

Mozambique’s ports are now ranked higher than South African ports

The rankings put South Africa’s ports behind both Maputo and Beira in Mozambique, as well as Dar es Salaam, Mombasa and Djibouti along the east coast of Africa, and Walvis Bay, Namibia, in the west.

Durban’s port is the busiest shipment and container facility in sub-Saharan Africa, handling not just 60% of the country’s container traffic, but also cargo for other African countries, particularly Zambia, Zimbabwe and the Democratic Republic of the Congo. An average of 880 ships per month visits the port.

Cape Town is also one of the busiest ports in Africa, particularly as it is situated along a busy shipping route between Asia and South America. More than 40% of South Africa’s agriculture and agri-processing exports move through the port.

The Western Cape government says that the Cape Town facility continues to suffer from severe congestion issues as a result of ageing infrastructure and equipment, staffing shortages and weather disruptions. This has resulted in vessels waiting up to seven days to berth and many have chosen to bypass the port rather than incur the costs of demurrage and delays.

Durban has also suffered from severe congestion in recent years and inbound containers can spend an average of three days in the port, and almost double that for exports.

Risk profile of SA’s ports has increased particularly due to unrest

The risk profile of the ports increased recently with the cyberattack on the facilities, which resulted in the government-owned Transnet National Ports Authority closing down its IT network and declaring force majeure for a brief period.

This followed the widespread looting and destruction that overwhelmed parts of Durban and surrounding areas in KwaZulu-Natal province in July. Attacks on nearly 30 trucks on the main highway between South Africa’s industrial heartland of Gauteng and the port led to it being closed for several days, thereby halting the busiest trade route in the country.

This had a knock-on effect on the port. Concerns about an attack on this key utility led to the closure of roads into and out of the port, while vessels were prevented from berthing because of the closure of port health services at the time, preventing COVID-19 testing being done on incoming crews. Richards Bay, a major coal export terminal north of Durban, was also affected.

The Road Freight Association said a trend for companies to use other regional ports had already started in the wake of deepening congestion in Durban, random attacks on foreign trucks on the highway to the city as well as theft of valuable cargoes, particularly copper loads from Zambia. However, the Durban unrest was likely to give the trend impetus, the association said.

Maputo presents strong competition to SA’s traditional trade gateway

Maputo, only 600km north of Durban, presents significant competition to South Africa’s trade gateway not just for regional trade, but also for business from the Gauteng province, where exporters are looking to diversify their options. The port, managed by one of the world’s top facility companies, DP World, out of Dubai, is almost exactly the same distance from Gauteng as Durban is.

Earlier this year, it launched a dedicated container train service from the port to Harare in Zimbabwe as part of its plan to expand its logistics and supply chain offering in the region, which includes connecting Maputo to industrial hubs in the subregion.

It has also established a new dry port depot in Komatipoort, a town on South Africa’s border with Mozambique. This operates as a bonded container facility, allowing shippers to rapidly clear customs for goods destined for Gauteng.

Beira is becoming a rapidly growing port

Mozambique’s second city of Beira is also home to a rapidly growing port, serving mostly central Mozambique, Malawi and Zimbabwe. Cornelder de Moçambique, the operator of the Port of Beira, says that import volumes along the Beira corridor into Zimbabwe grew by 23% year on year in 2020.

Dar es Salaam is also a potential competitor despite its own problems, but it serves that national market and increasingly Zambia and the DRC while Mombasa to the north attracts trade from the eastern DRC, Uganda, Burundi, Rwanda and South Sudan.

All these ports are also well placed as gateways into the continent for imports from Asian markets.

On the west coast, Namibia is pushing forward on a transport corridor project that would reduce the distance between Walvis Bay and Zambia’s copper belt by 400km, making it an efficient and cheaper option than Durban for exports and imports to these vital mining areas.

Durban is still very much in the game, with improvements to the port itself and the rail links to it underway. The government plans to invest $7.4 billion over the next decade to increase its handling capacity to more than 11 million units a year from 2.9 million.

But it can no longer rest on its laurels. As South Africa’s risk profile increases, other countries are investing in capacity and efficiency improvements to take regional business. And many have geography on their side.