Missing the X factor

The answer to this fundamentally important question is ‘no they won’t.’ And why not? Because at the end of the day, the terminal operating system will remain in public sector hands and this is a system, with one or two exceptions, that does not foster what can be termed a full service mentality. A cruel appraisal of the Cape Town container terminal and South Africa’s container terminal operations generally, or a realistic assessment? Well let’s look at the evidence.

The first clue lies in Cape Town’s current comprehensive modernisation plan and for that matter the similar programme underway in the port of Durban. Cape Town has formulated a multi-phase development programme that will see it extend its container quay, install new super post-panamax gantries, expand its yard area and make the switch from a straddle carrier-based landside operating system to a higher density rubber tyred gantry-based system. All positive steps.

The fact of the matter is, though, that this programme’s implementation has come late to the terminal which under its original configuration and operating arrangements was nudging up against the top end of its capacity window. Hence the problems with accommodating vessels alongside and the congestion on the landside.

Bottom line, the start date for the new investment programme should have happened a while back and typically under private sector management this would have been the case. Providing for trade growth and hence capitalising on a business opportunity is a fundamental feature of a commercial operation, especially where there is competition in the system. Where there is what amounts to a public system monopoly then there is obviously less incentive to be market responsive and so it has proved in South Africa, in Cape Town and Durban. Another notable aspect of this is the terminal operator’s influence on the supply chain. It is particularly notable that Transnet as the terminal operator has a mind-set that is largely focused on the shipping line as a customer and not exporters and importers.

The fundamental message that is coming across is that while South Africa is taking positive steps in terms of undertaking significant capital expenditure on its containerport system, the resulting efficiencies that can be expected will still be constrained by the decision to stick with public sector based terminal operating arrangements. This contrasts with the decisions taken by other major maritime nations worldwide where they have seen the merit in placing terminal operating arrangements in the hands of the private sector.

It also has to be said that it contrasts with the arrangements in Singapore where the public sector is a highly successful container terminal operator, the main difference being that the Port of Singapore has made great strides in adopting a private sector mentality. This is the basic element missing from South Africa’s comprehensive plans to upgrade its containerport system.