Transnet Port Terminals CEO Karl Socikwa
Photo by: Duane Daws
Transnet and Transnet Port Terminals (TPT), in particular, was not afraid of competition from new, modern ports in Africa, TPT CEO Karl Socikwa said during the African Ports Evolution Conference in Durban.
The conference was aimed at bringing together stakeholders and port authorities from across Africa to investigate growth opportunities and leverage strengths and experiences.
“For us, regional integration is important. We need to look at cooperation and collaboration in Africa. We are not threatened by what is happening elsewhere in Africa. We are pleased to see our peers looking at investing. By investing more, we can attract higher levels of economic activity to Africa,” he commented.
Socikwa was addressing the issue of readying the country’s ports for an onslaught of trade.
He said that, while current economic activity did not seem to warrant investment ahead of a sudden influx of goods, greater competence within the broader freight logistics sector, both in South Africa and regionally, would ultimately attract the desired levels of trade activity.
“That’s why the development of other ports in Africa is so critical for trade flow between countries. It’s not about TPT. At the end of the day, it’s about making sure that we have sufficiently competent infrastructure to be able to support intra-African trade and trade between Africa and other parts of the world.
“So, if Nigeria or Tanzania or Kenya do not have proper facilities, it is not good for the continent. Ultimately, it is not good for us either and so the issue of competition really doesn’t come into it.”
He stated that Transnet’s seven-year Market Demand Strategy (MDS) was a bold move to not only cater for projected demand but also to provide for unmet demand. “When we kicked off the programme, we did a lot of preliminary research and found significant unmet demand. After two years, we are on target in terms of the goals we’ve set ourselves. “
He stressed that the MDS was “not for the faint-hearted” with one of the key challenges being the fact that one needed existing rather than just projected volumes to justify borrowing the capital needed for massive infrastructural development.
In addition, it was not just about spending money on bricks and mortar but about investing in human capital and growing a performance culture that would realise the desired levels of performance and provide a platform for attracting new demand.
For Socikwa, building capacity is not limited to meeting national needs but also about growing transshipment.
“Shipping lines will only bring containers here if we make it attractive enough for them to,” he said.
He pointed out that the global trend was towards using larger vessels, which required deep, modern ports with highly productive terminals and sophisticated equipment to handle large volumes.
The logic behind the trend was economies of scale, with shipping lines saving costs by deploying one vessel instead of a number of smaller ones. Transshipment ensured that these large ships operated at optimum capacity.
To further contain costs, Socikwa pointed out that ships wanted to make just one call in South Africa. This emphasised the importance of building the Durban dig-out port, which, when fully operational, would have container handling capacity far above that of all other container terminals in South Africa combined.
Currently, Durban is an import/export facility, while Coega is the transshipment hub. The breakdown of cargo at Durban is estimated at 75% import/export and 25% transshipment, with the reverse at Coega.
Socikwa admitted that this would change as ships carrying both South Africa-bound and transshipment cargos sought a single port of call.
The next challenge when it came to improving service levels to attract transshipment business was for Transnet to not only sharpen its own performance but to synchronise all activities including ship handling and rail that fell under its umbrella. This synchronisation was key to ensuring that ship turnarounds were at world-class levels, he noted.
He said that, going forward, Transnet would also be looking to greater collaboration with other stakeholders across the broader supply chain, particularly those in the private sector.
Up until now, the focus of TPT was “load offload.” Now, he said, TPT was looking more closely at ensuring that suppliers at level two supported the desired levels of activity.