JUNE 2009 FREIGHT & TRADING WEEKLY
SPECIAL feature
Gearing up for better times ahead
FTW1666SD
JUNE 2009 | 1
There’s no getting away from the dismal truth that volumes are down. But that hasn’t halted all upgrade plans at the port, and nor is the industry standing still as many gear up for the good times to come. Editor Joy Orlek Consulting Editor Alan Peat Contributors Liesl Venter Advertising Carmel Levinrad (Manager) Yolande Langenhoven Claire Storey Jodi Haigh Managing Editor David Marsh
Correspondents
Durban Terry Hutson Tel: (031) 466 1683 Cape Town Ray Smuts Tel: (021) 434 1636 Carrie Curzon Tel: (021) 674 6935 Port Elizabeth Ed Richardson Tel: (041) 582 3750 Swaziland James Hall jhall@realnet.co.sz
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Seafreight Page 2 Maputo and Ngqura challenge Durban’s supremacy Page 5 Bullish outlook for container volumes
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Page 24 Fleet expands despite depressed economy Page 26 New container depot on the planning boards Page 29 Durban efficiency promotes accurate planning Page 10 Ship repair gets relegated
Page 30 Warehouse expansion planned
Page 12 Harbour entrance developments help redefine Durban Bay
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Page 16 Richards Bay upgrades forge ahead
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2 | JUNE 2009
Maputo and Ngqura
challenge Durban’s supremacy
The Port of Durban ... the continent’s leading port.
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JUNE 2009 | 3
Complementary or competitive? By Terry Hutson
I
t has been a matter of some debate whether or not ports such as Maputo or the soon-to-be-opened harbour at Ngqura in the Eastern Cape will constitute a real threat to the status of Durban as the country’s leading port. Some analysts believe that the role of the other ports should and will be complementary rather than competitive, and Transnet appears to concur by seeing the Ngqura development as a port that will help relieve the pressure on Durban at peak times. With this in mind Transnet has continued with a policy of increasing capacity at Durban. When Ngqura opens in October this year it will come at a time when congestion reports have become a thing of the past, with pressures on existing terminal facilities having long since lifted. But in any case Transnet says that the intention is to market Ngqura as a transhipment terminal, aimed at capturing a significant number of containers destined for East and West Africa as well as the Indian Ocean region generally.
Maputo – only alternative?
Realtors always say that when selling a house one of the most important factors is always position, position, position, and this principal applies equally to ports in relation to their markets. In that regard it is only Maputo that can act as a realistic alternative to Durban – no matter what the lobbyists for the new Eastern Cape port might suggest. But Maputo port comes with its own challenges, not the least being that it is not currently geared to handle any sudden substantial increases in container volumes, either in terms of terminal capacity or in regard to the size of ships that Maputo can handle. Which raises another other question – what is it that influences where ships will call? Ships will always call where market forces dictate – and in this regard the tail seldom wags the dog as some shipping lines have suggested. But at the same time the ports have to be capable of accommodating the type and size of ships that other market forces are dictating – such as the cascade effect which has seen South Africa already receiving calls from ships of 5 000 and 6 000-TEU capacity long before any of the ports have been suitably readied to receive them.
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In this Transnet has a good chance of succeeding, but it will bring new challenges not just to Durban but to Port Louis in Mauritius as well – and an interesting couple of years lie ahead for port observers. According to Transnet statistics, transhipments handled at the Port of Durban during the 2008 financial year amounted to 617 478 TEUs – that was 24% of the total containers handled by the port and a small increase year on year of this type of cargo, but still a significant portion of the total containers handled by the port. According to Solly Letsoalo, Transnet Port Terminal’s chief operating officer, the majority of Durban’s transhipment containers were destined for “international” ports. This is probably the main ‘challenge’ facing Durban in the next few years. During 2008 the port handled 2.56 million TEUs – an increase of less than 2% on the previous year – and indications are that 2009 may see an actual decrease, the first time this has happened for some years. Any movement of transhipment cargo to Ngqura instead of Durban will therefore succeed in further reducing volumes at Durban by a fairly substantial amount, while also acting as a significant ‘safety valve’ for the release of pressure on a straining Durban port when busier times return.
As is reported elsewhere in this feature, the port of Durban has undergone a major entrance channel widening and deepening programme mainly for this purpose, and will be able to accommodate ships of up to 9 000-TEU capacity if necessary. In that respect Transnet is wisely planning ahead of demand and – together with a similar programme of deepening the container terminal basin at Cape Town along with the development of Ngqura – South Africa will be well equipped to handle these much larger ships. But at Durban sadly none of the container berths have yet received any remedial work in preparing them to receive ships with a draught greater than 12.5m. Geotechnical surveys of the areas alongside each container berth have been concluded and Transnet will soon be in a position to make a decision on whether further action to deepen the actual container berths can proceed. But even with the utmost haste, for which Transnet is unfortunately not noted, it is unlikely that Durban will have deep water container berths to handle a fully loaded late generation container ship for some years to come. Currently only Ngqura meets the requirements here, although work at deepening the berths at Cape Town is well advanced, but both are constrained by being located further away from the main Gauteng markets. This may well result in Ngqura becoming a transhipment port for Gauteng cargoes with a system of feedering containers to Durban for onward land transport to Gauteng introduced.
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JUNE 2009 | 5
Bullish outlook
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ontainerised cargo volumes moving in and out of the Port of Durban are expected to pick up for the remaining six months of 2009, says Roy Ramdiyal, Safmarine regional executive for Kwazulu Natal and Swaziland. “This prediction comes off a low base and total volumes for the year are unlikely to be ahead of 2008 volumes,” he told FTW. “This said, the mood is more buoyant as a result of the increased volumes experienced during the March to May 2009 period and we’re hoping the positive trend will continue.” He says the firming of rand against the US dollar, the decreasing lending rates and a perceived stabilisation of freight rate levels have contributed to a slow improvement in import volumes. Ramdiyal also believes the impact of ‘sub-economic’ rates on certain trade routes will have to be addressed if lines are to continue offering the capacity currently committed. Export-wise, he expects the commodity market – especially
the heavy metals sector which has become active again – to grow. And reefer exports, which started slow, are steadily picking up. The current trade environment remains a challenging one for South African exporters and importers but Ramdiyal says all stakeholders in the logistics chain appear committed to adding value and reducing costs. “For example, port productivity has been improved which has decreased turn-around times. The staging area in the port has also added immense value as it has decreased port traffic during peak periods.” Safmarine has also enhanced its focus on customer service. According to Ramdiyal, the line’s National Call Centre operated from Durban is the only one of its kind for South African shippers wanting a single entry point for general information such as estimated vessel arrival/ departure times, vessel stack dates and the like. “The Call Centre is just one way we can add value because it allows us to service our customers ‘The
Aarthi Mehta (left) and Melissa Sukdeo head up Safmarine’s National Call Centre based in Durban. Safmarine Way’ by giving them quick, easy access to knowledgeable, experienced Safmariners.” The Centre is managed by Melissa
Sukdeo and Aarthi Mehta, and Ramdiyal says customer response to the Call Centre to date has been extremely positive and encouraging.
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6 | JUNE 2009
‘Stay positive
– and ride out the storm’ MSC remains optimistic By Terry Hutson
“
2
008 was one of the best ever years for the shipping industry, and that’s including the last three months when things began turning round so dramatically. Since then the industry has been hit by a tsunami of events,” says Captain Salvatore Sarno, managing director of the South African Mediterranean Shipping Company (MSC) operation. “Everyone at MSC, worldwide and here in South Africa, is working hard at weathering the storm of the economic downturn while examining every way of curtailing costs, but without affecting our people,” he said. “We’re looking at making thousands of little savings,” he added saying that the general tenor of the company is to remain confident. “The attitude of those in Geneva and myself is to remain positive, not to show panic – we prefer to remain optimistic. “In our opinion we’ve reached the bottom of the trough and must now ride things out. It’s time to stabilise things. Everybody hopes the recovery will be quick. But we need to remember
Captain Salvatore Sarno ...‘We’ve reached the bottom of the trough.’
that although imports and exports are down by 30% and 20% respectively, the volumes we are now seeing are the same as those for 2007, so it’s not a total disaster.” Sarno says the real disaster lies in the East-West trades where there has been a complete collapse. “In June we’ll start seeing some general freight increases on these trades so that should bring about some improvement, but on those trades the general situation is really bad.” In November MSC will introduce the 2002-built cruise ship MSC Sinfonia to South Africa in partnership with Starlight Cruises, when the 59 000 ton ship arrives to undertake a summer season of cruising out of Durban. “This will be the most luxurious hotel in South Africa, except she is afloat,” Sarno said, adding that this once again indicates MSC’s confidence in South Africa. “The Sinfonia offers top luxury such as staterooms all with their own balconies in a class of ship to attract the most sophisticated passenger. South Africa has never had such a ship based in her waters before.”
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8 | JUNE 2009
Several major projects under way More than just a facelift for the port By Terry Hutson
R
edesigning the entrance channel is far from all that has been happening in the Port of Durban. Several other large projects have and are taking place, with others in the pipeline. One of those, newly completed, is the Pier 1 Container Terminal, which has been somewhat overshadowed by the development of the Ngqura Container Terminal even though Pier 1 offers a similar capacity and ultimately the same facilities as does Ngqura. Built on the site of the Pier 1 Multi Purpose Terminal on the south of the harbour, the new container terminal consists of three berths, although only two are generally in use. These currently have draught restrictions of 12.8m although proposals are in hand to deepen the berths and provide a 16m depth alongside. What the terminal does boast is having been equipped with six Super Post-Panamax ship to shore cranes and a fleet of rubber tyre gantry (RTG) cranes to handle the stacking of containers – the first terminal in South Africa to be equipped with RTGs. Pier 1 Container Terminal has an annual design capacity of around 720 000 TEUs and makes use of the Navis SPARC operating system – again the first terminal to do so in South Africa. A new rail terminal has also been completed along with an automated gate complex, in each event pioneering developments for the other terminals. Pier 1 Container Terminal has cost Transnet in the region of R2 billion to develop. A study to extend the terminal into the Salisbury Island complex is currently at feasibility stage – if this proceeds it will add another 800 000 TEUs to the terminal’s overall capacity, yet another similarity with Ngqura. At the adjacent Durban Container Terminal (DCT), upgrading of the actual quayside on the north end of the terminal (berth 203 -205) is currently under way along with the refurbishment of the
During 2008 the Port of Durban handled almost two-thirds of the total containers handled at South African ports. Photo: Terry Hutson. terminal’s older ship to shore gantry cranes. The terminal has also been equipped with a number of new super Post-Panamax STS cranes and the fleet of over a hundred straddle carriers has been replaced entirely with new Kalmar machines, including a number that are capable of stacking boxes four high. Within DCT’s precincts construction of the relocated workshop buildings and a new multi level parkade for staff vehicles is under way on the outer perimeter of the terminal to create more stacking space within the terminal itself. This terminal will also be converting to the Navis SPARC operating system in the near future – DCT currently makes
use of a COSMOS designed system. During 2008 the Port of Durban handled a total of 2.56 million TEUs at all terminals, a slight increase on the previous year but still almost two thirds of the total containers handled at South African ports.
Warehouse for soya bean imports under way
In other areas of the port a large warehouse with a capacity to store 80 000 tons of soya bean imports is under construction at the Maydon Wharf Agriport Terminal opposite berth 8. Transnet has long-term plans to refurbish the old Maydon Wharf area –
the berths date back to the early 1900s and many are extremely shallow in draught and in need of refurbishment. These proposals are currently on hold but if and when the nod is finally given it will entail major engineering to create deeper berths. Transnet also ‘harbours’ an ambition to create clusters of similar-type commodities along the length of the 15 Maydon Wharf berths. Again, due to the current economic downturn, this project has been placed on the back-burner until more favourable times.
Still handling 6m tonnes of breakbulk While breakbulk cargo remains a
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JUNE 2009 | 9
Durban Car Terminal Units handled 2008 Transhipments 5 955
Imports 184 511
FTW1692SD
Exports 182 091
Another area of the port receiving some much-needed attention is the Island View oil and petro-chemical terminal. The complex now houses more than a thousand large storage tanks, making this one of the largest such facilities in the southern hemisphere. The facility is also one of the port’s oldest, dating back to the 1920s when the first tanks were constructed. This construction period extended through into the 1950s when the last of nine berths was opened to shipping although new tanks continue to be erected. However, maintenance work on the berthing area has been badly in need of attention and upgrading is currently under way, with one berth being taken out of service at a time for refurbishment. Several berths have already been completed.
Bayhead road upgrade on hold Another project to be placed on hold as a result of the downturn, and one that will probably be roundly criticised by the freight industry for being short-sighted, is the temporary suspension of the Bayhead Road upgrade project. The intention was to extend the double highway aspect of Bayhead Road beyond the Langeberg Road junction (DCT turnoff) to provide improved road facilities and access to the Pier 1 Container Terminal as well as the Island View petro-chemical complex. This included plans for a truck staging area for vehicles using the Pier 1 Container Terminal. Transnet has indicated that it will review the situation during 2010.
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diminishing commodity worldwide it is worthwhile noting that Durban still handles almost six million tonnes of breakbulk – which in itself is greater than the combined cargoes of all types handled at a number of ports in the southern Africa region. The Durban Car Terminal has almost completed an expansion programme taking it to the planned capacity of 14 000 slots. Four dedicated berths are available for the use of car carriers, a unique facility anywhere in southern Africa. In 2008 the Durban Car Terminal handled a total of 372 557 motor units, of which 184 511 were imports, 182 091 exports with the small balance being tranship vehicles.
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10 | JUNE 2009
Ship repair
gets relegated for more profitable pursuits Industry forced to persevere without state encouragement BY Terry Hutson
S
hip repair and ship building at South African ports remains something of a Cinderella in the sense that while it is acknowledged that these services are necessary, no-one wants them in their kitchen. Transnet will in all likelihood be unhappy with such sentiments, and will point out how much valuable space is given over for ship repair in ports like Durban, Cape Town and East London. But any scrutiny of Port Master Plans indicates an alarming inclination towards moving these facilities aside or even relocating them for what are seen as more lucrative activities such as container handling. The Durban Bayhead is a case in point, where recent master plans have suggested that the best solution for Durban ship building is to relocate to Richards Bay. On paper this may look like a good idea, i.e. move all ‘dirty’ cargo to the port that specialises in bulk cargoes while retaining ‘clean’ cargo like containers close to the main transport corridor to Gauteng. But as shipping people, and ship
repairers in particular will tell you, what looks good on paper does not always work in reality. Ships don’t plan their mechanical breakdowns. Nor do ship owners want to waste valuable time taking their ship to another port for emergency repairs. Logically, the ports with the most ship calls will attract the most repairs – and that means Durban and Cape Town.
‘Recent master plans have suggested that the best solution for Durban ship building is to relocate to Richards Bay.’ Despite the lack of official support, the ship repair industry has been remarkably successful in recent years and has also begun attracting a degree of ship building, with seven tugs, several bunker barges and other vessels under construction in Durban alone. In the case of Durban, despite immeasurable odds, the industry has managed to keep Durban in the forefront of ship repair and to resuscitate the
once thriving ship building industry, using innovation and ingenuity in the process. Despite the challenges and threats the industry has also made considerable investment in the future of Durban ship repair. It is a message that those in the industry have been trying to convince both government and Transnet, that having ship repairers available is essential for any port that caters for large numbers of ships. Transnet’s own ship repair facilities, its 80-year-old dry dock, and the more recently replaced but troublesome floating dock have been allowed to deteriorate owing to insufficient maintenance and care. Ship repairers using the dry dock are forced to arrange for private cranes to replace non-existent dock cranes that would be regarded as part and parcel of the service anywhere else in the world. The private sector and Transnet have been in discussion for many years over proposals that the dry dock, in which Transnet shows no indication of making investments, be privatised, but so far to no avail. This is reminiscent of the
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story about a ship repair company, Elgin Brown & Hamer, which applied to place a floating dock at Cape Town. After five years of waiting for a response they went to Namibia and were welcomed with open arms. Today Walvis Bay has not one but two identical floating docks in service with that company and is attracting good business, much of it business that would have gone to Cape Town. Transnet’s own floating dock is another case in point, having been out of service for more than a year, while the adjacent Eldock has enjoyed full occupancy for much of that time. It appears that the message to the ship repair industry is that they are on their own and must muddle along as best they can without state encouragement. Fortunately the industry hasn’t muddled along but is proving both resilient and successful. There have been numerous highlights during the past year, including some major ship repair and refurbishment contracts with large amounts of steel replacement after vessels have gone aground or otherwise suffered failure along the long southern African coast. Ship building has shown a strong
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Durban’s two busy floating docks. Photo: Elgin Brown & Hamer. resurgence, with orders for seven harbour tugs that are now under construction at the Durban Southern African Shipyards at a cost in excess of R500 million. Several bunker barges have been completed at Dormac Marine and others double-hulled in accordance with the latest MARPOL requirements. Dormac Marine has announced plans to build its own 240m long dry dock with a width of 40m on the company site at Bayhead. Many people in the shipping industry regard this as extremely ambitious yet it may never have been necessary had the Transnet dry dock question
been addressed. SA Shipyards is meanwhile importing a small floating dock, ostensibly to use as a launch vehicle for the tug shipbuilding programme although it would be naive to think this will not be used for ship repair in the future. These projects and other ordinary ship repairs undertaken by the many companies and sub-contractors and suppliers add immeasurably to the importance of Durban as a port, while also increasing and adding value to the skills base of the city and environs and, of course, generating substantial amounts of capital for the region.
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12 | JUNE 2009
Harbour entrance
developments help redefine Durban Bay By Terry Hutson
I
t is probably true to say that never before has quite so much effort and money gone into the development of an existing port in this country as is currently under way at Durban. Although they are listed as separate projects, most of the recent developments have been taking place at the same time or close behind each other and should be seen in their entirety. The mammoth task of widening and deepening the harbour entrance is possibly the most noteworthy of the projects and certainly the most visible, as it has had a major effect on public activity in the harbour area. Interestingly it has also been the project receiving probably the least concern from environmental interests and other potential objectors. The work has been able to progress without any noticeable delays, although the pirates of Somali have done their bit by hijacking a special side stone dumping vessel,
the Pompei, while it was en route to Durban to work on the breakwaters. The Pompei was seized and remains in pirate hands as this article is being prepared. Nevertheless it appears the channel project will be completed on schedule by early 2010 and, as if to confirm this, the first ship to make official use of the now widened channel did so on Monday, June 15, 2009.
‘Larger new generation container ships can now enter Durban harbour with every safety, along with the larger bulkers and tankers.’ In summary the work has entailed removing the old north pier, erected from the 1850s onwards, and reconstructing a new north breakwater some hundred metres northward. This involved removing buildings and other infrastructure at the tip of the Point which included some famous watering holes offering
the finest close-up views of shipping anywhere on the South African coast. Also removed was the city’s sand pumping station, which has been in existence since the early 1980s to control the loss of beach sand along Durban’s famous Golden Mile – a direct result of the port entrance breakwaters interrupting the littoral drift. The scheme involved transferring sand by Transnet dredger from the Cave Rock bight outside the north breakwater and transferring it into a pumping station on the old north breakwater from where sand was pumped along the beaches. With the north breakwater having to be rebuilt northwards, this scheme had to be redesigned as part of the overall project.
Reconstruction of tunnel
Yet another project involving cooperation between Transnet and the eThekwini Municipality was the removal and reconstruction of a tunnel beneath the entrance channel to carry service equipment, pipes and cables to the Bluff. This was carried
out and completed early in the project. During all this construction the entrance channel remained in regular service, with the minimum of interruption. The project is costing an estimated R4 billion – that’s the amount that was raised with the Japanese Bank for International Cooperation in March 2009 to pay for the project. One of the highlights marking the completion of the new channel, even in an unofficial capacity, will undoubtedly be the arrival in Durban in March of the giant luxury cruise ship Queen Mary 2. With a length of 345 metres and a beam of over 41m, the huge ship will have no more problems sailing majestically into port than did her predecessor QE2. It is equally exciting for the port because it means that larger new generation container ships can now enter Durban harbour with every safety, along with the larger bulkers and tankers. The early engineers who battled to build the first breakwaters would be impressed.
Brakes on at the car terminal By Terry Hutson
A
fter 13 years of unprecedented growth at the Durban Car Terminal the brakes have been applied – ironically after the terminal reached a capacity of 13 200 slots, just short of the peak design capacity of 14 000 slots which will be reached this November.
The motor industry is probably one of the first to reflect changing economic trends and this is proving true in the current recession. Transnet Port Terminals (TPT) reports a dramatic decrease in the number of vehicle imports and exports along with vessel calls, although in the 2008/09 financial year ended 31 March 2009 the terminal handled a total of 372 557
motor units, just a little shy of the 388 894 units achieved in the preceding year 2007/08. There has however been a significant drop in imports, from 258 881 in 2007/08 to 184 511 units, but the reverse is true with exports, driven mostly by Toyota South Africa’s export drive. Vehicle exports at Durban rose to 182 091 units from 122 590 the
previous year. Industry sources say they do not expect any improvement with the motor industry before 2011 at the earliest. The Durban Car Terminal remains one of the most modern and with excellent facilities, including the use of four dedicated berths linked by overhead bridge into the parkade area of the terminal.
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Welcome support for inland dry port BY Terry Hutson
A
s a result of the ongoing road congestion problem, some welcome support for a proposed inland dry port has been received from two sources – the Cutler Complex representing the stakeholders at the Island View oil and petrochemical complex and the eThekwini Municipality. In March the Cutler Community Liaison Forum representing all the Island View stakeholders threw its weight behind the construction of a dry port at Cato Ridge, halfway between Durban and Pietermaritzburg, which it said offered a meaningful solution to the proliferation of container truck traffic in the Durban South area. The Forum has delivered a submission to the ministers of Public Enterprises and Transport respectively, arguing that port expansion of the container handling facilities should go hand in hand with the construction of a dry port and its corollary, increased rail traffic. Speaking in support of the proposed dry port, eThekwini Municipality ward councillor Cllr Duncan du Bois said this kind of
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endorsement, which added tangible momentum to the process needed to make the project a reality, was “most heartening”. Further encouraging support came at the end of May when a full meeting of the eThekwini Council agreed to investigate the merits of a dry port at Cato Ridge in order to make recommendations to national and provincial governments. The idea of an inland dry port near Durban is nothing new. In the late 1990s Dr Mickey Chasomeris, then an honours student in economics at the University of KZN, undertook an extensive study to assess the cost-effectiveness of having a dry port at Cato Ridge, suggesting that road vehicles carrying containers from inland should discharge their cargo of containers at the dry port instead of going on to Durban. From this terminal containers would be railed by dedicated train direct to the two Durban container terminals by means of special shuttle trains. This, he said would result in a drastic reduction of container traffic on roads within the metro, an easing of traffic congestion and an improvement in road safety as well as a lessening of road destruction
Durban container terminal ...the port that never sleeps. Photo: TPT. caused by too many heavies using the roads. It would also improve the utilisation of the rail network into the harbour and stimulate job creation and poverty alleviation in the Cato Ridge area. New facilities for storage and consolidation or de-stuffing of cargo would develop along with various ancillary services for the maintenance of vehicles and equipment. Being close to the industrial sections of the Durban, Pinetown and Pietermaritzburg areas, the dry port could be utilised for almost all container traffic arriving and leaving the port.
Another aspect for consideration is that a dry port should be considerably cheaper to build than a new container terminal within Durban harbour or the Bayhead. Suitable land at Cato Ridge has been identified and is available. There are numerous examples of dry ports in other parts of the world from which to draw experience, along with ample evidence that dry ports have been shown to work while helping to contain and reduce transport costs – perhaps the most important prerequisite facing seafreight transport into and from South Africa.
JUNE 2009 | 15
While the economic crisis has seen a definite slowdown in t’s all about location, which business, Comet says there is still is why many southern African much opportunity and once this countries prefer the Port of crisis is over the pressure will be Durban – not only because there on. “The industry is going to be is less congestion, but because it’s very busy to get things back to also often more cost-effective. normal and that will put a lot of According to Timothy Comet, pressure on transporters.” Durban branch manager for According to Comet Durban harbour will also find itself at the receiving end and can expect to ‘There is still much be busier than ever. It is for this opportunity and once this reason that having an office close to the port is important for crisis is over the pressure M&B Transport. will be on.’ “We offer overnight services into Swaziland, Lesotho and M&B Transport, the importance Botswana via Johannesburg. of an effective port cannot be With an office in Durban, close underestimated. to the port, we can get to our “The Durban port is becoming goods quickly and effectively. increasingly busy as many This saves time and money and countries in southern Africa minimises the risk of losses and prefer using it because it damages caused by transhipping saves Ad(140x260) costs.” and1 moving from port to depots.” Geography 8/1/08 9:51 AM Page By Liesl Venter
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16 | JUNE 2009
Richards Bay
upgrades forge ahead despite recession 30% decrease in some commodity volumes By Terry Hutson
G
ood news for Richards Bay stakeholders is that Transnet intends continuing with the refurbishment of the dry bulk (DBT) and multi purpose terminal (MPT) despite the economic downturn which is resulting in sharp drops in terminal volumes. This was revealed recently during a series of countrywide roadshows in which Transnet Port Terminals (TPT) indicated its intention to continue with existing projects aimed at upgrading and improving terminal capacity. In the case of Richards Bay some R800 million of refurbishment is under way or planned, including the maintenance of existing infrastructure and equipment. Solly Letsoalo, TPT’s chief operating officer said that while Transnet could only guess at how much longer the downturn would last, the organisation had nevertheless made the decision to continue with
countrywide upgrades because it understood the need to have spare capacity for whenever the economy started recovering. He explained that at Richards Bay this was despite some commodity volumes having decreased by as much as 30% since October 2008.
‘RBCT says the intention remains to ramp up exports to 76mt a year with further extensions taking this to 91mt a year.’ He said the resultant slump did offer opportunities of taking equipment out of service for necessary maintenance and generally to prepare for a recovery by improving terminal capacities. But importantly Letsoalo said the emphasis on achieving this included recognising the need to address issues of productivity, while also introducing a programme of maintenance and refurbishment of older equipment.
TPT currently has the capacity to handle 13 million tonnes of cargo at Richards Bay MPT and DBT which it intends increasing to 21mt without having to expand either the port or terminals. TPT believes the two terminals can in fact be extended beyond 21mt to handle up to 35mt annually without any additional expansion. Letsoalo said this could be achieved by way of improving productivity, installing new and more efficient conveyor systems and building additional concrete slabs for the handling of dry bulk commodities, while also dividing the dry bulk berths into a system of separate specialist import and export facilities which would encourage specialisation. In addition certain low volume dry bulk commodities will be transferred to the MPT where there is some spare capacity, allowing DBT to focus on fewer high volume commodities. There is also an urgent need
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to bring both terminals back into profit, Letsoalo said. The main focus on achieving this would be through improved productivity, increasing ship turnaround time with generally improved loading rates and through the introduction of a programme of planned maintenance which is aimed at reducing timeconsuming mechanical breakdowns on equipment. To help achieve these targets TPT has appointed teams to address each sector and identify ways and means of bringing about improvements. In terms of equipment TPT has six ship unloaders of which two are new and the balance is undergoing a programme of refurbishment. Letsoalo said the cost of refurbishing a ship unloader was approximately 30% that of buying a new machine. Both terminals are also equipped with a f leet of mobile canes During the 2008/09 financial year ended 31 March the port of Richards Bay handled a total of 82.73 million tonnes of cargo. The
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Moving abnormal loads is nothing out of the ordinary for Cargocare, which recently transported a reduction plant to be used in a Russian gold mine.
Solly Letsoalo ... ‘Transnet recognises the need to address productivity issues.’
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larger share of this was export coal, of which Richards Bay Coal Terminal (RBCT) logged exports of 61.79mt, which was down 6.6% on the 66.16mt of the previous year. In 2008 Transnet Freight Rail delivered a total of 62.66mt of coal to the terminal despite several delays caused by derailments along the line. RBCT says the intention remains to ramp up exports to 76mt a year with further extensions taking this to 91mt a year . Mining analysts are however sceptical about whether these figures can be achieved in the short term. On the ship repair side there is still no news of the proposed dry dock and ship repair facility that a local BEE company plans to introduce with the backing of Chinese interests. Transnet says it has the matter under consideration but a decision has remained pending for several years and analysts are again sceptical whether this project will get off the ground in the foreseeable future.
Growth into Africa looking good By Liesl Venter
D
urban’s potential is limitless thanks to continued growth in KwaZulu-Natal, says Joe de Villiers, managing director of Cargocare Freight Services KZN. “As the largest seaport in the country it serves Gauteng well, and with the new government connections, we are expecting to see even more growth in KZN. The new Africa groundswell also augurs well for further growth of exports to Africa,” says de Villiers. Cargocare, which has offices in both Johannesburg and Durban, has been very involved in the export of foodstuffs, petroleum and manufactured products into Africa. Regular motor vehicle exports for a UN agency are also part of its portfolio. The company, says De Villiers, was really built on a dream and is now driven by passion. “After 28 years working for multinationals where no-one knew the boss, I decided to leave
the freight supermarkets and start a traditional service value company where the owners work behind the counter.” Joined by Krish Yenketas and Roland Raath, they have built up strength in both exports and imports. According to Raath the company continues to adapt to market conditions – something that is possible due to its direct hands on approach. He says due to the new financial landscape there has been a marked move over the past six months from full containers to groupage/LCL cargo. “In the same vein we have noticed that an overall drop in airfreight volumes has been replaced by a greater demand for JIT airfreight, which is a perfect economic fit for today’s trends. Smaller outlay, with reduced transit times, feeding demand where it is found.” According to Raath and De Villiers Cargocare has always catered to this type of specialist market, ensuring cargo delivery the same day as flight arrival 80% of the time.
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invests R40 million in two ‘Beware of desperate operators offering cut-price deals’ By Liesl Venter
T
here is no quick fix for the economic downturn, says Paul Levy, sales director for Bridgeport Durban – and brilliant deals that promise huge returns over a short period of time can only appeal for a while. “The most recent SA Ponzi scheme seems to be an example of this sales strategy,” says Levy. “Similarly some warehouses and logistics providers offer unmatchable rates to entice volumes during difficult times. This appeal works for a while and some will take advantage of these opportunities but they must be sure that they’re able to clear their cargoes out of those traps in time. One can only sell a rand for 90cents for so long and the house of
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cards collapses.” There is no denying that times are tough as the worldwide economic crisis continues to impact on South Africa. “We have been visited by competitors who try to gain access to our facilities to see what we are doing and for which customers. This practice has increased significantly over the last period and should be viewed as an index of how tough things are out there,” says Levy. “Everyone believes that someone else has the answer, the secret solution to surviving through what are the most serious economic times in recent times.” And Durban is a tough market. “It is not for sissies. But it remains integral to the wider Bridge Group and we have invested heavily in our Durban operations.
JUNE 2009 | 19
e warehoused and can either be containerised or moved breakbulk between the facilities in large
years In fact, Bridgeport Durban has seen in excess of R40 million worth of infrastructural development in the past two years. With Bridgeport Durban and Bridgeport Johannesburg uniquely linked by rail, cargoes are warehoused and can either be containerised or moved breakbulk between facilities in large quantities, with relative ease. Similarly, empty containers can be shuttled between facilities whenever imbalances in container equipment occur in either region. According to Levy there is a critical shortage of containers in Johannesburg at the moment. “The result is that shipping lines are turning empty containers in to Bridgeport Durban to be empty-
railed directly from our sidings into our Bridgeport Johannesburg private sidings. “This flexibility is of interest to the shippers as well as the shipping lines because it alleviates the difficulty of matching container availability with cargoes on the move.” More and more containers are being moved by rail due to the simplicity of moving large volumes in single shunts rather than controlling large numbers of individual vehicles that are subject to road congestion. “In terms of new developments, our rail shuttle service between DCT and Bridgeport Durban is high on both our agenda as well as Transnet Freight Rail’s,” says Levy.
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Namport markets
complementary West Coast option By James Hall
F
lushed with the success of a marketing campaign drawing SA shippers’ attention to the Namibian Ports of Walvis Bay and Luderitz, the marine facilities’ management company, the Namibian Ports Authority (Namport), is stressing that its Atlantic Coast ports offer complementary service rather than competition to Durban’s Indian Ocean location. “We have seen a steady increase in business the past couple of years. Yes, we give credit to the marketing campaign, of course. It’s been business as usual at Walvis Bay this year too with more volumes moved by more ships,” said Wessels Feris, Namport’s executive assistant for marketing. One reason why Walvis Bay has escaped the impact of this year’s global recession is that long-term contracts for Namibian fish, the port’s primary shipped commodity, are being honoured by overseas buyers, and oil companies are taking advantage of down time imposed by low oil prices to tow idle rigs off the
West African coasts to Walvis Bay for servicing. The tugs that transport them are also being refurbished while in port. “But operations at Luderitz have taken a hit because of the recession. Fishing hasn’t been affected, and bulk cargo like zinc mining (output) has not yet been affected, though it may still face a threat,” said Feris. “It’s the smaller goods that are moving less, like the marine services that supply the off-shore diamond mines. De Beers is the biggest operator,” he noted. Another reason for a steady rise in volumes out of Walvis Bay is the increase in vessels using the port, which in turn offers shippers more options. “There has been an increase in calls by CMA CGM, and we are likely to see the introduction of yet another shipping line, Mitsui OSK Lines (MOL), bringing regular scheduled calls to the Port of Walvis Bay," Feris reported. Meanwhile, continued marketing of Namibia’s ports by the Walvis Bay Corridor Group, which comprises port stakeholders, will publicise
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the lack of congestion and speed of operations at the Namport-run facilities. Late last year WBCG opened an office in Gauteng to
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Hoëgh Autoliners restructures New man at the SA helm as Folkesson moves up
Lee Sayer ... newly appointed SA MD. By Alan Peat
T
here’s a new management strategy, plus a new man at the SA helm of Höegh Autoliners – whose massive, slab-sided car carriers are frequent visitors to the Durban car terminal, Southern Africa’s major artery for vehicle imports and exports. New to the MD’s post is Lee Sayer,
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direct from a stint in Tokyo as GM of the used-car division at Höegh Autoliners KK where he was responsible for used vehicle exports from Japan to the rest of the world. He replaces Per Folkesson who has been appointed head-of-region for Middle East, India, South East Asia, Oceania and Africa. The new management style, designed to enhance the line’s international presence
and sales activities, according to CarlJohan Hagman, CEO of Höegh Autoliners Holdings, sees Hoegh going through a global restructuring into a decentralised organisation. Regional offices, he told FTW, are empowered to further improve the service level, shorten communication lines and provide decisions close to customers. “Regionalising the commercial activities builds on the successful implementation of operational areas previously carried out,” said Hagman. “These steps are taken as part of a global process to make Höegh Autoliners quicker, smarter and better at servicing its customers.” While concerned about the current global crisis, Hagman is optimistic in his future outlook. “We believe that in the long term prospects are good in our business segment and we will continue growing with our customers when the market recovers.” Höegh Autoliners started its roll-on, roll-off (ro/ro) car carrier operation in 1969 and deploys some 70 owned and chartered vessels in its global trade systems – managed from a worldwide network of 30 offices, and carrying about 2.1-million car equivalent units (CEU) a year according to its 2008 records. The local area offices in this region of the world are Johannesburg, Dubai, Mumbai and Auckland.
Logistics is where the jobs are By Ed Richardson Logistics and warehousing are two of a handful of sectors that are still recruiting people, according to the SA Adcorp Employment Index released in the third week of June. According to the Index, employment levels are likely to continue dropping until 2010, after the index showed a drop of 5.7% in the demand for labour. However, the job losses will not be experienced across the whole economy. Construction, logistics and warehousing, communications and information technology, government and personal services sectors remain robust and are showing net employment growth, says Adcorp Holdings chief executive Richard Pike. “The sectors that are under substantial strain and show employment losses are mining, manufacturing, retail and wholesale trade, as well as finance, real estate and business services.”
22 | JUNE 2009
Making shipping easy
for customers is the underlying premise By Alan Peat
I
n the past 12 years Maersk Line has grown its presence in the Durban shipping market from a relatively modest start – deploying a feeder service between Durban and Algeciras – to a 50-employeestrong front office. Although having its own peculiarities, the approach to the market in Kwa Zulu Natal shares in a universal business truth, according to branch manager Carl Lorenz. That is, for all the staff to unite behind the common goal of making shipping easy for the customers, and efficient for the line. “We have access to an unparalleled vessel network stretching to-and-from all corners of the globe,” he told FTW. “This is coupled with best-in-class global reliability – with the line recently named by Londonbased consultants, Drewry, as the most reliable large carrier out of the world’s 20 largest for the fourth consecutive quarter with 78% on-time arrivals. “These lay the ideal foundations for the Durban team to have confidence in the product they sell and support.” Lorenz pointed out that the company based its thinking on well-researched tactics. In January 2008, after extensive
research into industry trends and market needs, Maersk Line launched its global strategy, “streamLINE”. “This,” said Lorenz, “is based on four strategic, but fundamentally simple, pillars. Filling ships with profitable cargo; making unmatched reliability of a standardised product; shifting authority and decisionmaking to the front line; and not accepting unjustified cost.” In talking to FTW, Lorenz found it difficult to hide the sense of pride he had in the KZN operation he pilots from Durban – situated amidst all the major SA shipping lines, battling for a share in SA’s largest seafreight marketplace. “All our teams realise the importance of listening to, and understanding, customer needs,” he said. “Employees from all departments can often be spotted in customers’ offices discussing any challenges face-to-face, and going the extra mile, to ensure they understand and proactively address any issues that may arise. “If the most recent customer satisfaction results are anything to go by, Maersk Line Durban is delivering on its promises.” Lorenz also pointed to a revamp of Durban’s sales department. “Among others,” he said, “the
Carl Lorenz ... positive approach. modification means that the entire sales team now reports directly to me as Durban branch manager – meaning that front-line sales is only separated by two reporting levels from MD David Williams.” Quizzed about the effects of the current global crisis, which has slammed the brakes on growth of cargo volumes and
shaved lines’ operating margins, Lorenz stressed a positive approach. In the midst of an economic crisis, he told FTW, the Durban team takes inspiration from Alan-Knott Craig, MD of iBurst, echoing his sentiments that: “Life is not about waiting for the storms to pass, it’s about learning to dance in the rain.”
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the company is able to handle both hazardous and non-hazardous cargo. “All our cargo is consolidated here and is loaded directly to cross border destinations preventing delays and double handling that results from transhipment via Johannesburg,” says Govender.
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But, he added, in recent times there have been challenges doing business in Durban. “The market is saturated with a lot of small companies trying to get by and they are offering cheaper rates without the knowledge of permit requirements and border clearance procedures. This can be very costly with deadlines missed and it impacts negatively on the industry.”
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Lovemore expands fleet despite depressed economy
S
tanding up to the worldwide recession in the road transport industry, the Durban-based machine-moving and rigging specialist, Lovemore Bros, has continued to add to its extensive vehicle fleet. It is an integral part of the company’s philosophy, according to director Bruce Lovemore. “Even in the face of depressed times in the business and economy generally,” he told FTW, “a committed supplier needs to continue to invest in new, sophisticated equipment to provide his client with the most modern, up-to-date engineering solutions.” The company’s latest acquisition of four new Volvo trucks is proof of this commitment. Each vehicle has been uniquely assembled to provide cover for a specific area of application in the rigging industry. From a mechanical horse sequenced to pull a 100 ton load to a crane truck with a rear mount 66 ton metre crane operated by remote control. “This ‘wireless’ type of operation,” said Lovemore, “is in line with the highly regarded European safety standards, and meets our overall focus on safety.”
Lovemore’s four new Volvo trucks … preparing now for the good times ahead.
Concordia International celebrates it’s 30th anniversary and 24 years of dedicated service to South Africa.
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Key milestone for logistics major as Durban office opens By Liesl Venter
W
Gerald Rowe ... ‘New airport will add new opportunities.’
ith Durban being a very important location in South African forwarding and clearing terms, opening an office in Durban is a key milestone in the continued growth of a hartrodt South Africa. According to managing director Gerald Rowe, through this venture the company intends to build up its client base in sea and air forwarding, both import and export in the Kwa-Zulu Natal region. The office was officially opened in March this year and is managed by Marco Zachow, whom Rowe specially brought out from the parent company in Germany to head up the new venture.
“Whether we talk about general cargo or project cargo, import and export, it must be remembered that from a worldwide trade perspective Durban is the largest and busiest South African port, not to mention that it is also the main port of entry for freight into Johannesburg as well as our northern neighbours. It also seems that in the future the ship repair and spares business may play an increasingly important role in Durban. It therefore makes absolute business sense for us to have our own presence in this important port,” said Rowe. And with the new King Shaka International Airport due to open within the coming year, he believes there will
be new airfreight opportunities through additional direct flights to and from this new international airport. He sees the possibility of further opportunities being provided through the new airport and vicinity being incorporated into a proposed new Free Trade Zone. The ongoing and very visible infrastructure investment being made into the road systems and port facilities of Durban and surrounds will definitely make for increased ease of movement for both cargo and personnel in the area, said Rowe. “We are extremely happy to be investing in a city that has such great business potential, potential that we believe can only help us in increasing our southern African footprint.”
Freight broker markets preferential rates By Liesl Venter There are far more opportunities for doing business in Durban than challenges, says Sharonne van der Vijver, business development manager for Metcon. “Durban is an extremely important market as it is the gateway to Africa. There are tremendous possibilities for
business,” says Van der Vijver. “There is a large client base at one’s disposal as there are many more forwarders in Durban than Johannesburg. Our main aim has been to ensure that all these forwarders know the name of Metcon.” Metcon South Africa, a licensed freight broker, is part of the internationally renowned MUR Group of Companies, headquartered in Dubai.
MUR is an international shipping company with offices around the world and controls the movement of approximately 25 million tons of cargo per annum worldwide. This is managed through the control of between 90 and 130 breakbulk or bulk vessels either on time charter or through ownership. Metcon is the container division of MUR and ships out in an average month
some 3000 containers on behalf of the affiliated group companies. As a result of these high volumes, the company has managed to negotiate preferential rates from all the major shipping lines. The company recently started buying and selling containers. Durban remains an important part of the business and therefore an office was established in the city, says Van der Vijver.
26 | JUNE 2009
New container depot on the planning boards Cypress Transport develops facility near the port
D
evelopment and business growth remain key strategies for Cypress Transport, which is in the process of securing land for the development of a brand new container depot. According to Durban branch manager Marlon Govender, the new depot, which will be able to store a maximum of 3000 TEUs, will be situated in a prime location near the port. “The Port of Durban remains one of the most important ports within South Africa and is currently the busiest in the southern hemisphere. This port is the gateway to a number of landlocked destinations and transhipment ports throughout subSaharan Africa,” said Govender. “Add to that the fact that the Durban weather is an important factor in comparison to other ports that are often affected by bad weather and the better infrastructure, it is important to have a facility near
the port.” Govender says while traffic congestion remains a challenge with delays of anything from five to 20 hours, the Durban Container Terminal has improved its service levels to the shipping lines as the vessels have a much quicker turn around time. “KZN has a well developed infrastructure and an excellent rail system – there is much opportunity for business.” Cypress Transport, founded in 2000 by Dorothy Jenkin with only a single shipping client, has continued to grow from strength to strength. “We now have a network of branches in Durban, Johannesburg and Cape Town,” said Govender. “In Durban we also recently moved premises from the Bayhead area to Churchill road in Morningside where we purchased a building. “This was to suit our client base, an important consideration in an era where client retention has become of great importance.”
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Marlon Govender … ‘New depot will be able to store a maximum of 3000 TEUs.’
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By Liesl Venter
JUNE 2009 | 27
CFR and partners reach Chetty heads up 1000-destination milestone Durban-Gauteng corridor for global direct routes By Liesl Venter
W
ith no real competition there is no denying that Durban remains king as the gateway into southern Africa. That’s according to Clive Nel, CFR Freight branch manager in Durban where business has increased significantly in recent years. “Durban is a major hub for transhipment cargo to sub-Saharan Africa, mainly from countries such as China and India. It is also the South African hub when it comes to LCL consolidations. It is the main gateway for imports on all routes from the East.” It is for this reason that the city plays an important role for CFR Freight, which offers services to the forwarding industry as a strictly neutral NVOCC. “Our Durban operation is customer-driven and we have become known as a reliable partner to our clearing and forwarding clients when it comes to booking LCL and airfreight cargo at fair and marketrelated prices,” said Nel.
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With an airfreight division that has been operational for nine years as a wholesaler to the clearing and forwarding industry, CFR Freight offers both sea and air consolidations under the same banner. “We can offer rates to and from any country in the world through our partnership in the AirCargo Group, which is a global organisation of airfreight wholesalers,” said Nel. “We are constantly developing new direct services on both sea freight import and export routes and can ship and receive cargo to and from all parts of the world.” The company earlier this year, together with its global partners in the WorldWideAlliance, reached the milestone number of 1000 direct services throughout the globe. “Congestion at the Durban port remains problematic at times and we are looking forward to the completion of the bridge leading into Sydney Road, which should alleviate the congestion in South Coast Road,” said Nel. “Business this year has been tight, but service and customer focus remain top of our list.”
Closing the loop in the management team leading its newly established corridor strategy, Transnet has appointed Transnet Port Terminals (TPT) chief of strategy, security, safety, health, environment and quality, Mervin Chetty, as general manager for the Natal corridor (Natcor). Chetty will serve as the strategic single point of contact for customers using Transnet’s intermodal transportation services along the route linking the Port of Durban with Gauteng. He will report directly to the newly appointed group executive: freight corridors, Mark Gregg-Macdonald. General managers are now in place for all four priority corridors including Natcor, Capecor, the Richards Bay corridor and Sishen-Saldanha.
Mervin Chetty ... closing the loop.
28 | JUNE 2009
New export requirements call for a review of systems ‘Improve efficiency and enhance management control’
N
ow is the time for all those involved in the export process to consider the suitability of their current systems and evaluate them in terms of functionality, in the view of Jonathan Sims of Core Freight Systems, a provider of IT applications for South African forwarding and customs clearing operators. “The requirements of systems used in the processing of export transactions have traditionally been less demanding than those in place for imports, primarily due to the absence of customs duty and VAT on an export transaction,” Sims told FTW. “This position may well be changing with the advent of Sars’ requirements in respect of EDI, UCR and MAS, and the ‘paperless environment’ initiative. “Given this it may be worthwhile for those involved in the export process to establish if their systems provide the optimum functionality, with the objective of improving the quality of data processing, ensuring compliance with Sars and driving down costs.” Perishables and mining commodity exports are obvious examples of industries that would benefit from this kind of review, in his view. “In addition exports
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by project type operators and the motor industry, although currently depressed, present an opportunity for companies to leverage their IT investment.” The CoreFreight application is designed to improve internal operational efficiencies, enhance management control and, where applicable, facilitate better transfer of information between the importer/exporter and his agent, says Sims. “These features are available in both the imports and exports processes. “The company uses modern windowsbased technology to support a logical process-flow that is easy to learn and is fully comprehensive, allowing staff an opportunity for personal development and to cross-skill for the benefit of their employer. “The application includes a Personal Task Manager, which allows the operator to manage his own work across multiple files, detailed audit trails, integrated file profitability analysis. A wide range of reports is available for both internal use and to communicate with external parties. A document image storage facility is integrated into the application allowing for simple access to information and internet-
Jonathan Sims … ‘The idea is that the application provides more than simply a tool for producing documents.’ based tracking of transactions is available.” According to Sims, Core Freight Systems has a broad user base and has cost-effective solutions for small, medium and large operators.
“The idea is that the application provides more than simply a tool for producing documents – it is a mechanism for managing and controlling the forwarding and clearing processes at both the individual and organisational level.”
JUNE 2009 | 29
Durban efficiency promotes accurate planning
Celtic trucks ply the Zambia route – but the company also offers an unpack service.
By Liesl Venter
D
urban is a port that works well – and that translates into accurate planning for a transporter. So says Cobus Marais, operations manager in Durban for Celtic Freight. “Because the port works so well, one
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can plan accordingly. There are no delays that affect the client, and we can use that as a marketing tool.” Marais says it also goes a long way in guaranteeing reliability as one can be assured of correct arrival times and schedule changes. “With that information in hand, we
can accurately pass on information to the client who is always aware of what is going on and what can be expected.” Celtic Freight deals exclusively with transport going through to Zambia. While also returning with goods, Marais says it is important to be able to tell clients where their cargo is at any given
time. “A lot of our Zambian clients import cargo from overseas. Having this cargo arrive at a port that is efficient and that works well with little or no delays is important as it will still take another two weeks after arrival before the cargo arrives in Zambia – delays become costly and inconvenient.” And with a landlocked country such as Zambia there is much dependency on imported goods. According to Marais the Durban operation of Celtic Freight was set up to assist with all the import containers that the company handles. “We also operate an unpack service – either in our own containers or we will dispatch the cargo as breakbulk to Zambia, depending on the commodity.” The company specialises in unpacking to reduce costs to the consignee, an important aspect of service delivery. “We must offer services that are suitable for our market and that meet our clients’ specific needs otherwise we would end up no different from anyone else,” says Marais. “It is all about efficiency and reliability.”
30 | JUNE 2009
Reddy plans
Executives see light in recession mist
warehouse expansion By Liesl Venter
By Ed Richardson
D
urban remains the port of choice for importers and exporters. It has held this distinction since the discovery of Natal by Vasco Da Gama and anybody with experience in and knowledge of the transport industry knows that not having a firm foothold within Durban is tantamount to suicide. So says Jackie Reddy, manager of Reddy Cargo Services (RCS) Durban, where plans are under way to expand the current facilities of the company to include a larger warehouse. “Our Durban branch is a regional office and not a satellite office,” says Reddy. “It is fully equipped and staffed to operate autonomously without being dependent on the head office. We are also situated close to the Durban Container Terminal and handle all imports and exports via sea, road and rail as well as warehousing.” The Durban branch forms an integral part of RCS, handling all the business along the coast from Richards Bay to Port Elizabeth while being primarily responsible for all cargo from Durban to the Johannesburg head office.
Part of the fleet that regularly plies the Johannesburg-Durban route. “While Richards Bay can handle larger cargo and has been growing rapidly, one must remember that Richards Bay was only developed to take on the overflow from Durban and handle bulk shipments. With the current infrastructure investments from Transnet and government, Durban still is – and is likely to always be – the busiest port in Africa, thus making it the ideal place for a transporter to be based or have a fully functional office as is the case with RCS,” says Reddy. As the port of entry into
Johannesburg, Durban is also cheaper than Johannesburg or Cape Town. “Especially in terms of rentals and wages there is a cost saving, but then there’s the high cost of fuel and toll fees along the Johannesburg/Durban corridor. Recent escalations have seen the cost of transport rise significantly.” According to Reddy one major challenge in Durban remains the outdated infrastructure at the port, something which is currently being rectified. “Hopefully this will result in lesser time delays in getting cargo loaded and on the move.”
Both local and international captains of industry are beginning to see light through the mist of the recession, according to a newly published report. “Buoyed by a sustained stock market rally, however slight in some countries, executive attitudes about the state of the global economy ticked up in March, though the majority still feel we are in the midst of a ‘severe recession’ according to results from the latest Executive Quiz released by The Korn/ Ferry Institute,” says Raymond Chasenski, managing director of executive search firm Leaders Unlimited. Because South Africa usually lagged a number of months behind the United States and Europe the uptick was not as strong as it was in those countries, he said. “We will probably only see a comparable growth in positive sentiment in the second half of the year,” he added.
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TNPA figures reflect 16.4% drop in total TEUs handled from January to April.
Stats reveal 25% downturn in overall activity By Alan Peat
I
t is very difficult to talk about exact, comparative stats, but a measure of the current downturn for SA industry and commerce is found in SA Container Depots’ (SACD) figures for container and cargo handling and storage at the main SA port of Durban, according to Mike Martin, KZN regional manager and director of SACD. “The SACD Durban volume of cargo handled into-and-out-of containers has pretty much mirrored the decline (year-on-year, JanuaryApril) in loaded, deep-sea containers handled in the port,” he said. “Bear in mind though that there are other dynamics at play – like new accounts gained and/or lost; once-off, non-repeat shipments; cross border and coastal volumes etc – which do not allow for a totally meaningful
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direct comparison to be made. The general trend is, however, the same.” Looking at his figures for imports and exports for SACD, Martin came up with a drop of about 25% in overall activity. This indicator is largely supported by the port stats released to FTW by Transnet National Ports Authority (TNPA), which reported a 16.4% decline in total TEUs handled, with deep-sea imports down 26% and deep-sea exports 23% lower. Martin pointed out that transhipments for Durban were up this year, mostly empties - but added that these have neither influence nor income for local industry. As much of SACD’s business comes from the big corporations, Martin feels that these figures would be a reasonably fair indicator of the effect of the global trade recession on SA industry.
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Johannesburg Tel: 011 285 0033 Durban Tel: 031 319 1300 Cape Town Tel: 021 911 0939
32 | JUNE 2009
‘No place in the cut-throat rat race’ Three years on, Durban office is pumping By Liesl Venter
F
or Regan Moodley, managing director of Shipping & General Transport, there is no place in the throat-slashing rat race often experienced in the Durban market. Instead he has built up a select client base that understands his business acumen and vision. In fact, his business, which he refers to as the concierge desk to the clearing and forwarding industry, is based on maintaining honour and integrity at all times, he told FTW. “One of the challenges of doing business in Durban is the total cut-throat environment. There is certainly a lack of basic business acumen amongst a handful of operators in that there is not a dynamic balance between the very basics in business: sale and cost of sale. I have opted not to partake or compete in this rat race,” says Moodley. Asked about other challenges facing operations in Durban, he says he has also found that smaller operators have a tendency to price their services at a rate that can only be described as hand-tomouth. Essentially this means there is no margin being maintained. “There is also a lack of fully established and adequately equipped operators in Durban when measured with
Part of the 75-strong fleet … services range from transport to craneage and packing/unpacking of containers. their Johannesburg counterparts. There is certainly a substantial number of oneman operators who are owners of their equipment and also drivers.” But, says Moodley, despite these challenges, Durban remains the busiest port of call with a constant demand for transport. “We opened our Durban office some three years ago as we found a demand in the market and we have been very happy with the outcome. Clients are always on
the look-out for reputable establishments where they are able to draw on a very comprehensive range of services under one roof.” Established some 25 years ago as a provider of warehousing and transport to the clearing and forwarding industry, the company is licensed with Customs as a carrier and has a monetary bond lodged with Customs to the value of R200 000. With a fleet in excess of 75 vehicles, its services range from transport to craneage
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and packing/unpacking of containers. “We recently obtained a rail account in City Deep and hence in close collaboration with Transnet Freight Rail are able to offer clients a railage service and cross-haulage of containers in and out of City Deep terminal,” says Moodley. “For us it has never been about here today, gone tomorrow. It is about ensuring sustainability while giving clients exceptional service.”
JOHANNESBURG Tel: 011 450-4488 Fax: 011 455-6160
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JUNE 2009 | 33
Container handling specialist sees signs of revival By Alan Peat
T
he Port of Durban –the main home of the SA seafreight industry – is a lifeblood for the container handling division of Toyota Forklift, according to Mike Norton, national sales manager for its range of Kalmar products. As a freight industry marketplace it has certainly seen a slow-down in its blood flow in the recent global crisis, he told FTW, but there are signs of the famous “green shoots” for which the more optimistic international economists are avidly searching. “The container industry in Durban has been relatively quiet for some time now,” he added. “But recently we have seen the symptoms of a pick-up, with the number of enquiries for new machines starting to increase. This is a positive sign for the future.” But bad times, or no bad times, the Kalmar range – everything from ship-to-shore gantry cranes, to reach stackers, to straddle carriers – is still in demand at the port. “There have been a number of significant deliveries into the market this year,” he said, “not least of which was 10 dedicated empty container
Arnold Garber
Executive Chairman Compu-Clearing Outsourcing
Sheldon Vorster
Product manager operational systems
handlers delivered to the Port of Durban.” The company has also recorded movement of a number of Kalmar, 45-ton reach stackers into the Durban market. According to Norton, these include three for Toyota SA’s new container park in Umbogintwini, while Nzenga Junction took delivery of an additional reach stacker for use in its Natal operations. “This purchase brought the number of Kalmar container handlers in operations nationally by Nzenga to 14, eight of which are operational in Natal,” he said. Norton told FTW that there were two main factors that kept Kalmar ahead of the throng. The first, he said, was its global reputation. “At any one moment in time, one-infour container moves worldwide is being handled by Kalmar equipment. And, in SA, we handle most of its product line – with Kalmar rated as the world’s premier producer of containerhandling equipment.” Its second sales bonus, Norton added, and a major factor of its success in the Durban market, has been founded on what he described as “an exceptional”
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Product manager financial systems
Emille Kamffer
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At any one moment in time, one-in-four container moves worldwide is being handled by Kalmar equipment after-sales team. “This includes 18 trained technicians, with a highly experienced and committed management team leading them, purely dedicated to work in-andaround the port. To this you can add another 50 mechanics who are employed to handle Toyota’s smaller range of equipment offered in Natal.”
On the product front, Kalmar is also striving to maintain its state-of-theart label. “For example,” Norton said, “they have upgraded their reach stacker range in 2009. This sees these units now coming fitted with items such as full air-conditioning systems and load scales as standard features.”
Tel: 011 882 7300 www.compu-clearing.co.za FTW4432
34 | JUNE 2009
Durban depot
running at full capacity … and containers are moving By Alan Peat
T
he Durban depot has its own special place in the hearts of the management at Nzenga Junction at the moment, according to Charles Olsen, GM for all the group’s container depots. Despite its depots at Johannesburg City Deep, Salt River and Ladysmith, and the warehouse/pack-unpack facility at Alrode all sharing in reduced volumes at this time of a global trade slowdown, the Durban Bayhead depot is working to full capacity. Its nominated maximum capacity is 7 500 TEUs. “And our records at the moment show we’re marginally up on that capacity,” said Olsen. “Last month our Bayhead depot even topped out at 9 000 TEUs. “But, while Durban is running at full or over-capacity, our other depots are registering about half-capacity.” The reason, he told FTW, is that
shipping lines are hesitant to move boxes up to Johannesburg if they don’t need to – and transiting the Durban depot between cargoes is a preferable option. Olsen is not only pleased with the depot’s capacity figures – but pointed to Nzenga’s gate throughput which is also high, adding that the containers were moving, and not just standing.” In the past three months, Nzenga’s gate figures at Bayhead have been running at a daily average of 365 units. “That’s slightly lower on the normal daily throughput prior to the economic crisis, but it’s definitely picked up from the 100-150 boxes that were passing through the gates daily in the early part of this year,” said Olsen. Nzenga Junction is a national network of container depots, specialising in warehousing and empty container parks, with both road and rail access and crossborder movement.
Soon flying direct to Durban.
Launch of direct Durban flights imminent October 1 sees the launch by Emirates Airline of direct flights to Durban. The airline already flies triple daily on the Johannesburg route and daily to Cape Town. According to cargo manager Kum Naicker, shippers and consignees
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JUNE 2009 | 35
Compu-Clearing to re-open Durban office Training and support centre to run courses By Alan Peat
I
n the freight system industry, changes in technology often dictate company structure and policy, according to Arnold Garber, chairman of freight system specialists, Compu-Clearing. Even something as apparently simple as the necessary or justifiable location of branch offices can be a subject of technological change. And that, Garber told FTW, has been the case with CC’s Durban branch, which is now set to reappear on the Kwa Zulu Natal business stage. “It was technology that made us close the original office,” Garber said, “and it is technology again that makes us re-open it.” This because computer procedures and programming have changed rapidly in the past two decades. Back in the 1980s, Compu-
Arnold Garber ... ‘It’s now possible to run training for people in Durban with the trainer being in Johannesburg.’
Clearing decided to open an office in the port city for two reasons. “The first was because – for our customers to be connected to Compu-Clearing main-frame servers – they needed to have a Diginet line all the way to Johannesburg,” said Garber. “This made sense to the companies that had branches all over the country. But, for enterprises that only had an operation in Durban, it made no sense. So we decided to set up a server room there.” The need for a help desk was a second reason for the Durban location. “In those years,” Garber added, “the concept of phoning a Johannesburg number – or even a toll-free number – and speaking to someone in another city, was first of all expensive. It was also problematic and not the order-of-the-day.” But technology changed all this. First, according to Garber, the advent of the cell-phone and a reduction in Telkom rates for broadband calls made phoning anywhere around the country – indeed the world – common practice. At the same time, on the system connection side, Telkom had introduced its ‘frame relay network’. Customers
in Durban only needed to have a line to the nearest node – which was usually in the same suburb where they had their offices. “That,” he said, “eliminated the need for having a server in Durban, and we could concentrate all our computing power in Johannesburg.” Durban then closed. But now there has been a new technological development on the web which has made Compu-Clearing once again look at opening an office in Durban. Programmes such as ‘Go To Meeting’ or ‘Team Viewer’ on the internet, according to Garber, have now made it possible to run training for people in Durban with the trainer being in Johannesburg. So Compu-Clearing is settingup a training and support centre in Durban to run all the company’s courses, but with the trainers still in Johannesburg. “You sit in a boardroom in Durban with a big screen and with loud speakers – and you can converse and interact with the trainer without any difficulties,” Garber said. “This latest technological change has once again made a Durban office for Compu-Clearing a justifiable investment.”
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36 | JUNE 2009
Industrial park continues to draw strong support Gearing up for Phase 2 By Alan Peat
A
new industrial park in Kwa Zulu Natal – with a strategic location close to Dube TradePort and King Shaka Airport – is still “selling like hot cakes”, according to SA investor Paul Izzard, partner in Index Property Services and Amber Dawn Developments, which is developing and marketing the property. The combine of UK and SA investors is busy developing the two-phase Imbonini industrial park in Ballito north of Durban – a 10-minute drive from the new international and its accompanying tradeport development. Phase 1 of the development –
consisting of serviced industrial sites from 1 500 to 20 000 m 2 in a fully fenced park with 24-hour security and access control – was completed last July, and is 80% sold. Izzard and partner Ed Peen expect the balance to sell out this year. The developers, Izzard added, are gearing up to start the civils on Phase 2 – with a total platform area of 450 000 m2 and double the size of Phase 1. “Although we are still busy selling phase one, we also have phase two out on the market,” Izzard told FTW, “and we have had a substantial number of enquiries flooding in.”
New container supply division opens in Durban BLG Lead Logistics expands its portfolio
Wesley Turk ... customised conversions. There is a new force in container supply, leasing and conversion in Durban, as BLG Lead Logistics launches BLG Container Sales & Leasing as a specialist division in this marketplace. Heading up the operation is Wesley Turk, who is confident that the groundwork has been established to allow the company to effectively compete in the SA market for the sale, leasing and customised conversion of both new and used marine containers. The start of BLG’s national network has been established, with branches in Durban, East London and Port Elizabeth. “We can supply from these branches to anywhere in the country,” said Turk, “but we going to grow until we can justify being represented in all the other regions.” With a focus on the company’s customised conversion division, Turk pointed to BLG having developed workshop facilities in its fully-fitted East London depot. “The next aim,” he said, “is to develop similar facilities in Durban, and supply the
whole country with conversions from these two sources.” And BLG is not only sticking to the basics when it comes to conversions. “We can convert new and used, 20-foot or 40-ft, standard or refrigerated (reefer) containers,” said Turk. “The only limit is the customer’s imagination – with a choice of customised boxes serving as offices, accommodation and ablution units, spaza shops, phone booths, machine control booths, workshops, reefers (in both blast freezer and cold room formats) and the like.” The market is equally widespread, he added, but tends to be mostly to customers in the retail chains and land-based industry. “Big construction companies are also major customers,” said Turk, “with a big demand for on-site offices, tools storage and ablutions, for example. “We also supply extensive delivery facilities for moving the boxes, using crane trucks, for instance, for delivery and offloading direct on to site.”
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