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Tuesday, 19 August 2008 16:18
ImageThe recently launched Durban Container Terminal Expansion Project, located within a broader strategy for restructuring State Owned Enterprises (SOEs) in South Africa epitomises the importance of containerisation in the country. Government says it is committed to ensuring that the South African ports system becomes one that is comparable to the best in the world.

It says a restructured ports sector will undoubtedly give a major boost to South Africa’s competitiveness and assist significantly in the promotion of South-South trade relations.

In this regard, government is finalising a national ports policy that will separate the ports functions into a development agency responsible for port infrastructure development and maintenance, port operations and a regulatory entity.

Last year the government announced that an investment of R1.34 billion had been approved for container expansion in Durban alone, over the next three years. This investment, coupled with the envisaged private sector investment via concessioning, will lead to the virtual elimination of ship waiting time over the coming years and thus reduce the shipping cost of cargo.

The investment will lead to higher capacity at the terminal and will also involve the conversion of the multi- purpose terminal into a container terminal. Effectively, this means that there will be a reduction in the port’s total break-bulk handling capacity.

Over the years, there has been an excess of port infrastructure capacity for break-bulk cargo and an under-supply of container capacity. Portnet will continue to review the capacity requirements of the various cargo types. It is expected that there will be many spin-offs from this project, including job creation during the construction phase and further employment opportunities as a result of increased capacity of the Durban port. Apart from sustaining much needed jobs, the project will support Durban’s economic growth vision initiative.

The investment is a huge boost to the industry as a whole. It is now widely accepted that the development and adoption of containerised solutions was one of the most important innovations of the last century. A recent report suggested it could even be argued “that the simple metal box has become the poster child for globalisation, given the crucial role it has played in facilitating the mass movement of goods”. There is little question that the ‘containerisation revolution’ has led to improvements in port handling and lowered the costs associated with both sea borne and overland trade. But it is also placing new demands on the mobile and stationary infrastructure required for efficient freight logistics.

On the whole, South Africa is responding well to this international tendency as well as its associated implications, such as the growth in vessel sizes and the need for larger port- and land-side equipment and infrastructure.

While container volumes at South African ports have grown by an average rate of about 12% a year over the last five years, there is no let-up in sight. This means that South Africa’s harbour landlord and the terminal operator are having to invest heavily, simply to keep pace with demand. But South Africa still has some way to go before its container-handling infrastructure and efficiency can be signed off as world class. Almost 51 years since the container revolution, initiated by American Malcolm Mclean, about 90% of the world’s cargo is now transported in containers.

This is a far cry from the box’s origins in 1956, when Mclean sailed from New Jersey to Houston, in the US, with 35-ft truck containers. Today, the largest vessel in the world is the Maersk Emma, which has a 14 500 twenty-foot equivalent units (TEUs) capacity.

The TEU container is still the most common measure in use globally, but the 40-ft container is increasingly replacing it. The growth in containerised shipping, which surged by 600% between 1979 and 2004, as well as the development in shipbuilding, has encouraged substantially larger vessels – a trend that no country or harbour is able to escape.

At a recent maritime business networking event, the South African Container Terminal Advisory Board’s Captain Dave Rennie said that, while vessels of over 7 000 TEUs are in general service, much larger vessels are emerging, with most major lines operating container ships of about 9 000 TEUs or 10 000 TEUs. In addition, much larger vessels of 18 000 TEUs are in the concept design phase.

The increased specialisation of ships and the growth of ship size have, over the years, resulted in ports around the world improving cargo-handling technology, operations, and infrastructure.

In container trade, investment is still required today to improve and buy equipment, expand container terminals, and develop rail and road infrastructure.

Containerised sea-borne cargo has grown significantly, creating a new set of challenges for the world’s ports, including those in South Africa.

In fact, cargo traffic grew from 78 million TEUs to 106m TEUs between 2002 and 2005. This has resulted in large shipping companies struggling to keep up with the demand for seaborne freight transport, and added strain and delays at harbours globally. The question is how South Africa can strategically prepare itself for its role in the container revolution, and to meet the challenge of handling megasize container ships. Container volumes at South African ports have grown by an average rate of about 12% a year over the last five years and similar growth rates are expected over the medium term, says Transnet spokesperson John Dludlu.

He adds that the state freight logistics group is moving ahead with its multibillion-rand investment drive to improve container-handling facilities at some of the country’s main ports. Its R10.5 billion capital injection into infrastructure development will assist South Africa’s main ports to deal with the increased demand for container handling. The total investment in all freight-related infra-structure amounts to R78bn.

Current infrastructure development includes the deepening and widening of the entrance channel at the Port of Durban, in KwaZulu-Natal, to accommodate larger vessels; the R4.1bn design and construction of the Port of Ngqura, in the Eastern Cape; and the R1.9bn upgrade for the container terminal at the Cape Town port, in the Western Cape.

These investments are seen as vital merely to keep pace with demand, given that container traffic in Durban alone has grown exponentially since 1994. The port was designed to handle 900 000 TEUs a year, but is currently handling at least 1.5-million TEUs – and it is projected that it will handle 3.5-million TEUs by 2020.

The container-stacking capacity at the Port of Cape Town is expected to be increased by 226 000 TEUs by 2008 and by 1.6m by 2017.

The Port of Ngqura, a new deep-water harbour in the Eastern Cape, is seen as a key component of trying to build capacity ahead of demand. Plans are progressing to build a facility able to accommodate vessels larger than 8 000 TEUs, which is the current handling capacity of the ports of Saldanha and Richards Bay.

David Capel
 

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