Archives For Durban

At the launch of Transnet National Ports Authority's new Integrated Port Management System (IPMS) [Transnet]

At the launch of Transnet National Ports Authority’s new Integrated Port Management System (IPMS) [Transnet]

Transnet National Ports Authority’s new web-based Integrated Port Management System (IPMS) went live on 26 July at the pilot site, the Port of Durban, with the crude oil tanker, Colorado, the first to be brought into the port using the new system.

Developed by Navayuga Infotech, a company based in India, in collaboration with their South African partner Nambiti Technologies, the IPMS is a strategic project that aims to support the broader objectives of the Transnet Market Demand Strategy (MDS) in terms of efficiency and productivity.

The project will cost TNPA around R79 million for the entire system, for all eight South African ports, covering concept development, architecture, implementation and rollout.

TNPA Chief Executive, Richard Vallihu, said: “Since 2008, various feasibility studies were undertaken where we identified the need for an automated and web-based system to improve port operations, strengthen efficiencies and enhance competitiveness. This online system will help transform our ocean gateways into smartPORTs by using advanced information technology that will make them more intelligent and sustainable, while conserving resources, time, space and energy.”
The system replaces manual processes, with key port operations now set to be automated, online and in real time.

Vallihu said the IPMS was benchmarked against Malaysian and Singaporean ports which were among the world’s most efficient. The IPMS system will be a groundbreaking initiative in that for the first time in the world a system such as this is integrated across multiple ports on a single platform.

“For us as a customer-focused organisation this state-of-the-art information technology will ensure that port information and processes are transparent and easily accessible to users throughout the South African port logistics chain,” he said.

Yugen Reddy of Sharaf Shipping Agency was excited about being able to work more efficiently. “My role as an agent is to make sure that ships are in and out of the port as quick as possible because time is money. With IPMS we will be able to use our smart phones or tablets while we’re out and about to update the system and get acknowledgment from TNPA on the spot with regards to sailing or berthing of vessels,” he said.

Vessel agent, Londa Small of Thembani Shipping agreed. “I am optimistic about the IPMS system because everything’s going to be in real-time enabling quicker turnaround,” he said.

IPMS will link to Transnet Freight Rail’s Integrated Train Plan (ITP) and Train Execution Management System (TEMS). It is also integrated with global systems such as Lloyds Register, AIS (for vessel traffic management), IPOSS (for weather), EDI (Electronic Data Interchange) and SAP (for business operations, customer relations and finance).

From Durban the project team will move on to Cape Town and Saldanha, then Port Elizabeth, Ngqura and East London and finally to Richards Bay and Mossel Bay.

TNPA conducted daily intensive training for internal and external users at the Maritime School of Excellence in Durban during June. Source: Transnet

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DBN Relocatable ScannerThe following article suggests the need for greater consultation and collaboration between all supply chain parties. While the associated costs relating to supply chain movements is not the purview of SARS, these should be considered as part of the overall impact assessment in the lead up to such an implementation. For all intents and purposes this is an unintended consequence. Stakeholders should also note that the SA government has not imposed any fee for the scanning of cargoes to re-coup costs. Non-intrusive inspection (NII) capability is a tenet of international customs control intended to mitigate security threats and incidents of cargo misdeclaration, even legitimate cargo that can be used to mask harmful products stowed in vehicles/containers. The issue of increased cost of compliance has unfortunately been a trait of many international customs developments ever since the advent of ‘heightened security’ – post 9/11 and seems destined to remain a ‘challenge’ as we supposedly move into an era of increased trade facilitation.Joint collaboration between all parties not only assists in better understanding of the broader supply chain landscape but can also contribute to positive measures on the ‘ease of doing business’.

Freight & Trade Weekly (issue no. 2158, 10 July 2015) reports that Industry has called on customs to look into processes around its cargo scanners which they say are currently driving up costs.

Two state-of-the art scanners are currently operational at the Port of Durban and Cape Town and are part of South African Revenue Service’s (Sars) countrywide approach to risk management that aims for less intrusive inspections at ports and border entries.

The scanners were introduced in order to improve efficiency, with stopped containers being released more speedily than has been the case to date.

“It has however in some cases increased costs because it has resulted in double handling of containers,” said Dave Watts, a maritime consultant for the SA Association of Freight Forwarders (Saaff).

Before the introduction of the scanners all stopped containers were moved by shipping lines to licensed depots for examination by Sars. Once the inspection was concluded and the container released the importer or his agent could collect it using their own transport.

The new process however sees the stopped container transported by the shipping line to the scanner where it is either released or has to be moved for a physical inspection to a depot.

If released at the scanner the container is however still on the shipping line’s appointed truck and not that of the importer or its agent’s nominated haulier.

There are no facilities to move it from one truck to the other at the scanners which means carrier haulage moves it to a depot anyway.

“The extra cost comes in simply because of the double handling,” explained Watts.

In Durban, where the new technology scanner was introduced just over a year ago, several importers maintain it is cheaper to just have their stopped containers taken to the depot for unpacks rather than going through the scanner and not unpacking.

According to Mike Walwyn, chairman of the Port Liaison Forum, the issue of carrier choice also comes into play as the importer now has to use carrier haulage for delivery as opposed to his or her own transport.

Whilst the Cape Town scanner has only been operational for a week, some very real challenges are foreseen and increased cost is one of them.

“The issue is not necessarily around the scanner,” says Watts, “but the rules and regulations around the customs act that stipulates all containers remain the liability of the shipping line until released by customs. In other words it has to be taken to the scanner by the carrier.”

It has been suggested that instead of doubling the handling of containers the carrier should just make the final delivery of the container, but it is generally accepted that carrier cartage rates are much higher than contracted cartage rates. In some cases the cost is said to be four times higher.” Source: FTW

Artistic impression - Durban Dig-out Port

Artistic impression – Durban Dig-out Port

An international ports expert has expressed serious reservations about Durban’s proposed dig-out port. He said plans for a dig-out port should be put on hold, with efforts rather directed at maximising the existing facilities and potential at Durban Harbour.

International adviser and expert on port development Jamie Simpson, of Canada, has warned Transnet and the eThekwini Municipality against pursuing the dig-out port, saying the current port has to “keep going”. Simpson was a guest speaker at a ports and cities dialogue with Durban businesses, hosted by the municipality’s Edge (Economic Development and Growth eThekwini) at the Moses Mabhida Stadium yesterday. His point of view was supported by two other speakers.

However, Transnet group strategy general manager Irvindra Naidoo was adamant that the parastatal was forging ahead with the project, saying Durban was “running out of capacity” and had to expand.

Naidoo said: “The question was: ‘Okay, do we now go off somewhere else and develop a new maritime cluster around Richards Bay or somewhere else, or do we try to embed or strengthen the cluster… (by extending) the Durban port?’ That’s what this dig-out port really is about. It’s an extension of an existing cluster.”

The port, the continent’s busiest, caters for 2.6 million TEU (twenty-foot equivalent units) a year. These result in about 8 000 daily container-related heavy vehicle movements around the Bayhead area. Transnet has repeatedly said that the port will battle to provide the capacity for future demand.

Naidoo said with a dig-out port at the old Durban International Airport site, the containers could reach 8.2 million TEU by 2040, resulting in about 17 500 heavy vehicle movements daily in the South Durban Basin.

Simpson told the panel that the move “might not be a very good solution”. He said: “In view of the likely availability of financing – a lot of uncertainty – I think the port has to keep going and develop a capital investment plan and operational improvement plans to meet demand in the next five to 10 years.”

From there, he said, the parastatal could “weigh up” whether a bigger port “makes sense in view of market conditions… and availability of finance at the time”.

The first phase of construction of the dig-out port was expected to start between 2021 and 2025. A pre-feasibility study started in 2013. To read the full article click here! Source: iol.co.za

Dube Tradeport will be officially launched as an Industrial Development Zone (IDZ) by President Zuma on Tuesday 7 October.

At the launch event, the Dube Tradeport will officially be handed over an operator permit which provides them the status of an IDZ.

Situated at the Dube Centre, King Shaka International Airport, Durban, it was designated as an IDZ on 1 July 2014 by the Minister of Trade and Industry, Dr Rob Davies.

Davies says, “The Dube Tradeport IDZ will be launched during a period of transition wherein Industrial Development Zones as governed by the Manufacturing Development Act will become Special Economic Zones (SEZ) under the new Special Economic Zones Act 16 of 2014.”
According to Davies, the Act has been assented to by the President, and will come into effect before the end of 2014.

Davies adds, “The main areas that have designated as Dube Tradeport Industrial Development Zone (DTPIDZ) are Dube Agrizone and Dube Tradeport. Dube Agrizone is about 63.5 hectares and focuses on high-value, niche agricultural and horticultural products while Dube Tradezone which is 240.27 hectares focuses on manufacturing and value-addition primarily for automotive, electronic, fashion garments and similar high value, time-sensitive products and inputs.”

“The launch of the IDZ will highlight the continuous efforts by government to promote industrialisation and create awareness about the SEZ programme, and its potential to grow the economy and create jobs through creating a conducive environment for foreign direct investment.” Source: Transportworldafrica.co.za with images from dubetradeport.co.za.

SARS Customs New NII Ste - DurbanSARS Customs recently launched its new X-Ray cargo inspection facility adjacent to the Durban Container Terminal in the Port of Durban. Following the trend as in other countries, SARS has identified non-intrusive inspection capability as part of its ‘tiered’ approach to risk management.

In 2008, SARS introduced its very first mobile x-ray scanner which was located inside the Durban container terminal precinct as part of South Africa’s participation in the US Container Security Initiative (CSI). While it has proven itself in the development of Customs NII capability, its location and lack of integration with other Customs automated tools has limited its success.

The new Customs inspection facility is a step-up in technology and automation – a Nuctech MB 1215HL Relocatable Container/Vehicle Inspection System. It has some significant advantages over the original mobile version namely –

  • An efficient and cost-effective security solution with a relatively small footprint (site size).
  • 6 Mev dual energy X-Ray technology with high penetration (through 330 mm of steel).
  • High throughput of 20-25 units of 40ft container vehicles per hour.
  • A unique modular gantry design which improves system relocatability.
  • Self-shielding architecture which requires no additional radiation protection wall.
  • Advanced screening and security features such as organic/inorganic material discrimination.
  • High quality scanning image manipulation tools allowing the customs image reviewer the ability to verify and distinguish the contents of a vehicle or cargo container.

Since its launch more than 350 scans have been performed. Suspect containers were sent for full unpack resulting in various positive findings.

The new relocatable scanner is easier to operate and significantly faster than the mobile scanner. In addition, scanned images are now automatically integrated into SARS Customs case management and inspection software making case management both seamless and efficient.

It is anticipated that until October 2014, both the new scanner and the existing mobile scanner operations will co-exist. During this time, the new scanner will operate risk generated cases directly from SARS automated risk engine. Unscheduled or random interventions will continue to occur at the old scanner site, which operates 24/7.

Plans are in place to decommission the mobile scanner after October 2014. The new scanner will then operate on a 24/7 basis.

Old Durban airport - site for new Dig Out Port (Picture credit: ACSA)

Old Durban airport – site for new Dig Out Port (Picture credit: ACSA)

The first phase of Durban’s dig-out port, which was expected to generate hundreds of jobs and turn the city into the shipping hub of Africa, would not be ready by 2020 as planned, and the current harbour might have to be expanded to provide a short-term solution. This emerged at a KZN Freight Task Group meeting recently where Transnet dig-out port programme director Marc Descoins admitted that a new completion date was being investigated.

‘The actual start date of the new port is uncertain as we are still in the early design phase,’ Descoins said last night. Technical issues, such as the requirements for the construction of a new single buoy mooring to replace the existing one, were affecting timelines. Other factors affecting the development were being re-examined, but Descoins did not give further reasons for the delay.

Transnet was still tracking demand forecasts to ensure that capacity creation was aligned to demand, he said. Nevertheless it had other plans for port expansion to ensure capacity met this demand. If an alternative could be found to expand the capacity of the port, the dig-out port project at the old airport site could be set back by a few years, he said.

However, a previously discussed option – the expansion of the current port into the Bayhead area – was ruled out by Descoins, as complex problems involved in developing the area as an additional container terminal would take at least 15 years to resolve. Engineering and technical businesses in Bayhead did not appear shocked at the news yesterday, saying they knew expansion in the area would not happen.

One of the most seriously considered – and quickest – options would be for the container terminal on Pier 1 to be expanded in the direction of Salisbury Island. This would also provide Durban with increased container capacity. A decision on this could be made soon, but if this option was decided on, the dig-out port might be even further delayed as Transnet would not develop both projects and create unnecessary capacity in the short term.

However, the dig-out port project would not be cancelled, and preparations at the old airport site would continue, Descoins said. Transnet had warned that without the dig-out port Durban would not be able to meet medium- and long-term shipping capacity demand. The project would increase the volume of container trade at the Port of Durban from the current 2.69 million twenty-foot equivalent units (TEUs) to between 9 million and 12 million TEUs over 30 years.

Durban was also the first choice for a port upgrade because of its good infrastructure, although the road and rail systems need to be considerably upgraded. Completion of the feasibility study was scheduled for the end of 2015 followed by a four-year construction phase. The first ships were expected to come into the port in 2020. For this to have been achieved groundwork would have had to begin by the end of 2016. Transnet bought the old airport land in 2012 for R1.85 billion. Building the port was expected to cost R75bn to R100bn over the next 30 years.

Desmond D’Sa, chairman of the South Durban Community Environmental Alliance, was pleased with the delay, but said the project should be abandoned.

‘Why do we even need another port? It is only going to become another white elephant like the Coega Industrial Development Zone in the Eastern Cape.

‘This is all about people with big pockets, and the extra time will only allow corruption.’

Durban Chamber of Commerce and Industry chief executive Andrew Layman said imports and exports from the harbour were not accelerating as much as expected.

‘This is reflected in the international trading market. South Africa is not the flavour of the month.’

There had always been plans for expansion of the current harbour, he said.

‘This is because ships are bigger these days – it needs to be deepened and widened. So I don’t think it is a case of one or the other.

‘The need for the dig-out port is not as imminent as originally thought, and money is probably not as readily available either.’

Layman said it was not ‘a train smash’ as jobs had not been created yet, but it was unfortunate that job creation would be delayed.

‘It is understandable that it would be further delayed in the current climate.

‘It would be pre-emptive to start construction as the system still needs a lot of work, such as our tariffs, which are higher than most ports around the world, and our service delivery.’ Source: The Mercury

Related articles

During December 2013, I received a fabulous book from a business acquaintance. Titled ‘Durban Harbour’, this special souvenir issue tells the fascinating history of Durban Harbour from 1835 to the present day. It reveals the extraordinary engineering skills and resilience that shaped Durban harbour into the largest and busiest harbour on the African continent and a major player in Global trade.

Recently another milestone was achieved for Durban harbour with the arrival in Durban of the largest container ship to dock in South African waters the MSC Sola – a giant of 131,771 tons and capable of carrying 11,660 containers, with a length of three and a half rugby fields. The ship’s visit to Durban was as a result of the widening and deepening of the port in 2010. See post – Durban awaiting arrival of 11, 660 TEU container ship.

But the story of Durban as a viable deepwater port is weaved in rich history and as Durban harbour approaches its second century – it is also time to toast the entrepreneurs for their innovation and the workers, harbour pilots, tug and train crews who played such a vital part in the day to day operations of the harbour.

For more information regarding the publication, and details of purchasing it visit the author, Stuart Freedman’s website – History of Durban Harbour.

Related articles
Ngodwana Mill, situated in the province of Mpumalanga (South Africa). It is a fully integrated kraft mill producing pulp for own consumption as well as newsprint and containerboard. (Sappi)

Ngodwana Mill, situated in the province of Mpumalanga (South Africa) is a fully integrated kraft mill producing pulp for own consumption as well as newsprint and containerboard. (Sappi)

The Sappi group, one of the world’s largest manufacturer of gloss paper, plans to use the port of Maputo, in Mozambique to export to Asian markets a group official told financial news agency Bloomberg. Alex Thiel, who is responsible for the group’s business in Southern Africa, said that in October an agreement was reached with Dubai-based port operator DP World, which together with South African logistics group Grindrod and state company Portos e Caminhos de Ferro de Moçambique, is a partner in Maputo port company Empresa de Desenvolvimento do Porto de Maputo.

The Sappi group, which is also one of the world’s largest producers of dissolving wood pulp, plans to ship 10,000 containers per year via the port of Maputo as it is just 250 kilometres from the group’s factory in the South African province of Mpumalanga.

“We have decided to export via the port of Maputo in order to save money as the second-closet port, in Durban, is 650 kilometres from the factory,” said Thiel.

The Mpumalanga factory, which starting producing dissolving wood pulp at the end of July, has already reached 75 percent of its installed capacity of 210,000 tons per year, and is expected to achieve maximum production in February 2014. The wood pulp will be exported via the port of Maputo to China, India and Indonesia, where it will be used to make thread for the textile industry. Source: http://www.macauhub.com

Proposed Durban-Free State-Gauteng Logistics and Industrial Corridor Plan (SIP2)

Proposed Durban-Free State-Gauteng Logistics and Industrial Corridor Plan (SIP2)

Notwithstanding on-going discontent amongst industry operators in regard to proposed legislative measures mandating customs clearance at first port of entry, the South African government (GCIS) reports that work has already commenced on a massive logistics corridor stretching between Durban and the central provinces of the Free State and Gauteng. Most of the projects that form part of the second Strategic Infrastructure Project (SIP 2), also known as the Durban-Free State-Johannesburg Logistics and Industrial Corridor, are still in the concept or pre-feasibility stage, but construction has already started on several projects.

These include:

  • the building of a R2,3 billion container terminal at City Deep
  • a R3,9 billion project to upgrade Pier 2 at the Port of Durban
  • R14,9 billion procurement of rolling stock for the rail line which will service the corridor.

Work has also started on the R250 million Harrismith logistics hub development to set up a fuel distribution depot, as well as on phase one of the new multi-product pipeline which will run between Johannesburg and Durban and transport petrol, diesel, jet fuel and gas.

The aim of these projects and others which form part of SIP 2, is to strengthen the logistics and transport corridor between South Africa’s main industrial hubs and to improve access to Durban’s export and import facilities. It is estimated that 135 000 jobs will be created in the construction of projects in the corridor. Once the projects are completed a further 85 000 jobs are expected to be created by those businesses that use the new facilities. Source: SA Government Information Service

Interested in more details regarding South Africa’s infrastructure development plan? Click here!

Secondhand Cars ZimbabweVehicle imports through the Beitbridge Border Post increased by 23 percent between January and May this year compared to the same period last year, the Zimbabwe Revenue Authority has said. The increase is attributed to the price freeze of vehicles in South Africa and also the exorbitant prices of vehicles on the local market. Prices of second hand vehicles in South Africa have remained stable for the past 12 months. It costs on average US$7 000 to buy a second hand modest car from South Africa and at least US$20 000 and above to buy a similar car on the local market.

Figures from Zimra show that a total of 14 114 vehicles have been imported through Beitbridge between January 1 and May 31, 2013 compared to 10 851 vehicles during the same period last year.

Investigations by Herald Business show that on average Zimra clears a total of 1 500 cars per month at Manica bonded warehouse, and the figure has increased to between 2 000 and 3 500.

A total of between 15 and 25 car carriers offload vehicles at Manica daily. Zimra’s legal and corporate affairs director Ms Florence Jambwa said that most of the cars were coming from Japan via Durban, South Africa.

“There has been a marked increase of motor vehicle imports at Beitbridge Border Post this year as compared to the year 2012.

“The month of January had the lowest number of imports (1 194) while the month of May had the highest number (3 706), in fact there has been an increase every month.

“You will note that imports of motor vehicles through Beitbridge are increasing as such the work load increases.

“However, the Zimbabwe Revenue Authority employs several strategies to curb challenges at the border post mainly through embracing modern technological innovations such as the use of scanners and the ASYCUDA World system which is Internet-based,” said Ms Jambwa.

She said they had already addressed the challenges that were affecting the processing of vehicle imports at Beitbridge border post. Early this year there had been an outcry over the slow processing of vehicle imports at Manica where importers were spending around two days to complete the processes with Zimra. On average it should take less than one and half hours per vehicle if correct documentation was made available. She said they had no backlogs in terms of printing the customs clearance certificates for all newly imported vehicles.

Herald Business is reliably informed that plans are underway to have a cash office at the bonded warehouse and the authority has been encouraging its clients to make their payments through the bank and avoid carrying cash. Source: Zimbabwe Herald

Old Durban airport - site for new Dig Out Port (Picture credit: ACSA)

Old Durban airport – site for new Dig Out Port (Picture credit: ACSA)

Transnet has concluded the first in a series of early stakeholder engagement sessions with local organisations on the proposed Durban dig-out port project. If built, the new port will be to the south of Durban on the site of the former Durban International Airport and 15 minutes by car from the existing port. It has been proposed that it will consist of 16 container berths, three Ro-Ro berths for the automotive business, and several oil and product tanker berths.

The engagement sessions just concluded form an integral part of the project’s concept phase which includes the development of a Sustainable Port Development Framework (SPDF) that will inform all future designs as well as operations. Transnet commenced with high-level technical and environmental studies in 2012 as part of the proposed Durban dig-out port project process. The current concept phase is scheduled to conclude in July this year, and comprises the generation of a number of technical design options.

The engagement sessions involved key representatives from local business, property, environmental and civic associations who met in order to comment on a discussion document which was distributed to them in mid-February 2013. The discussion document included important information on the background to, and process involved in, validating the viability of constructing a major container port on the site of the old Durban International Airport.

The sessions were held at various public venues and were facilitated by an independent sustainability consultancy. All feedback obtained during the engagement sessions was captured and will be factored into the development of the SPDF which will ensure the effective implementation of sustainability objectives throughout the life cycle of the proposed port project.

Along with promoting the long-term sustainability and operational excellence of the port, the framework also seeks to integrate environmental and social principles into the planning process. The series of engagement sessions, which will continue throughout the project’s lifespan, will also form part of the Department of Transport’s requirement for engagement during the strategic level environmental assessment as part of the legislative requirement for the promulgation of the port.

The process of moving from the current concept phase through the pre-feasibility and feasibility phases, and finally to actual implementation is anticipated to take approximately four years. The next phase, which is the pre-feasibility phase, is expected to proceed in July this year when the viability of the preferred design option will be thoroughly investigated.

The proposed port forms a key pillar of Government’s Strategic Integrated Projects (SIPs) to upgrade the Durban-Free State-Gauteng Freight Corridor (otherwise known as SIP2 in the National Infrastructure Plan). Source: Ports.co.za

MSC Fabiola - sets new record for Durban container vessel capacity

MSC Fabiola – sets new record for Durban container vessel handling capacity

 

The visit to Durban, a fortnight ago, of the MSC FABIOLA has again raised the limit in terms of container ship sizes to call at the port. The previous largest box ship to call at Durban was the 11,660-TEU MSC Luciana, whereas MSC Fabiola can carry up to 12,562-TEU.

Obviously the ship was not fully laden otherwise the port would not have been able to accommodate the ship. The deepest berths at the Durban Container Terminal are 12.8m and those at Pier 1 are about the same.

MSC Fabiola is a charter vessel and is currently deployed on MSC’s pendulum service between Northern Europe and Singapore via Durban, Cape Town and Ngqura. The rotation is Northern Europe ports, Cape Town, Ngqura, Durban, Singapore, Durban, Ngqura, Northern Europe.

The next objective to aim at is to have the 14,000-TEU box ships deployed on the South African service, defying all previous projections, as indeed has been the case with the 12,500-TEU MSC Fabiola.

Of course, the main obstacle in having these post panamax ships calling at Durban is that the country’s main container port lacks a deepwater berth. This is despite the entrance channel having been dredged and widened several years ago to -19m decreasing to – 16.5m in the harbour inside entrance. In the process South Africa has once again been exposed by rapidly moving circumstances and questions need to be asked as to why the process of providing Durban with deep water berths is being delayed. Source: SAPorts.co.za

2012 World's Container Ports With Most Potential (Mercator)

2012 World’s Container Ports With Most Potential (Mercator)

According to the Shanghai International Shipping Institute’s (SISI) ‘Global Port Development Report 2012’, rapid growth in throughput has been pushing Chinese ports up the global ranking in terms of development potential.

The report also revealed that throughput in China’s ports was stable, with a growth rate of around 3% to 10%, affected by the worsening economic environment, growth in international shipping and a decrease in trade volume.

But, with global economic, trade and shipping centres moving eastward, some small and medium sized ports have recorded double digit growth (over 20% in some cases). As a result, Chinese ports, including Hong Kong, have taken up five positions among SISI’s Top 10 2012 World’s Most Potential Container Ports, nine positions among the Top 20 global container ports and 13 positions among the Top 20 global ports in terms of cargo throughput.

The report says that European ports are likely to see a return in stability, with a limited growth of less than 3%, while American and African ports may see some growth in throughput following the slow recovery of international trade volume and stronger cargo handling capacity.

Trucks at Transnet Freight Rail's City Deep Terminal (Engineering News)

Trucks at Transnet Freight Rail’s City Deep Terminal (Engineering News)

Following up on last year’s meeting (click here!) of the minds, convened by the JCCI, a recent meeting in Johannesburg placed fresh emphasis on the dilemma which impending changes contemplated in Customs Draft Control Bill will have for the import and logistics industry in particular. The following report carried by Engineering News highlights trade’s concerns which are by no means light weight and should be addressed with some consideration before the Bills come into effect. Gauging from the content below, there is a clear disconnect between business and policy makers.

The closure of Johannesburg’s inland port seemed to be a “done deal” as Parliament deliberated the recently tabled Customs Control Bill that would leave the City Deep container depot invalid, Chamber of Commerce and Industry Johannesburg (JCCI) former president Patrick Corbin said on Friday.

The promulgation of the South African Revenue Services’ (Sars’) newly drafted Customs Control Bill, which, in conjunction with the Customs Duty Bill, would replace the current legislation governing customs operations, would have a far-reaching impact on the cost and efficiencies of doing business in South Africa and other fellow Southern African Customs Union (Sacu) countries, he added.

The Bill, which was the product of a three-year development process within the National Economic Development and Labour Council, declared that all imported goods be cleared and released at first port of entry. This was part of efforts by customs officials and government to root out any diversion and smuggling of goods, ensure greater control of goods moving across borders and eliminate risks to national security.

Speaking at the City Deep Forum, held at the JCCI’s offices in Johannesburg, Corbin noted, however, that City Deep had operated as an inland port for the past 35 years, easing the load on the country’s coastal ports, which were already strained to capacity. Despite customs officials assuring the chamber that the operations and facilities in City Deep/Kaserne would retain its licence as a container depot, he believed customs had failed to recognise the critical role City Deep had played in lowering the cost of business, easing the burden on South Africa’s ports and ensuring ease of movement of goods to neighbouring countries. As customs moved full responsibility of container clearances to the ports, port congestion, inefficiencies, shipping delays and costs would rise, and jobs would be lost and import rail volumes decreased, he noted.

Economist Mike Schussler added that the closure of the City Deep inland port operations would add costs, increase unreliability and induce “hassles”, as the Durban port did not have the capacity to handle the extra volumes and its productivity and efficiencies were “questionable” compared with other ports.

“The volume of containers going to overstay or being stopped for examination in City Deep [will] need to be handled by [the coastal] ports. If they can’t cope with the volume at the moment, how are they going to handle increased volumes,” Iprop director Dennis Trotter questioned. He noted that only the containers cleared 72 hours prior to arrival would be allocated to rail transport. Those not cleared three days before arrival would be pushed onto road transport to prevent blocking and delaying rail operations.

This, Schussler said, would also contribute – along with port tariffs and the cost of delays – to higher costs, as road transport was more expensive than rail.

He pointed out that South Africa was deemed third-highest globally in terms of transport pricing. It would also result in less rail capacity returning for export from Johannesburg, further leading to increased volumes moving by road from City Deep to Durban.

Sacu countries, such as Botswana, would also be burdened with higher costs as they relied on City Deep as an inland port. Trotter noted that the region would experience loss of revenue and resultant job losses. Over 50% of South Africa’s economy was located closer to Gauteng than the coastal ports. Johannesburg alone accounted for 34% of the economy, said Schussler, questioning the viability of removing the option of City Deep as a dry port.

However, unfazed by the impending regulations, Transnet continued to inject over R1-billion into expansion and development opportunities at City Deep/Kaserne. Corbin commented that Transnet had accepted the assurances from customs that “nothing would change and the boxes would still be able to move seamlessly once cleared.” The City of Johannesburg’s manager of transport planning Daisy Dwango said the State-owned freight group was ramping up to meet forecast demand of the City Deep/Kaserne depot.

The terminal’s capacity would be increased from the current 280 000 twenty-foot equivalent units (TEUs) a year, to 400 000 TEUs a year by 2016, increasing to 700 000 TEUs a year by 2019. Transnet aimed to eventually move to “overcapacity” of up to 1.2-million TEUs a year. Dwango said projections have indicated that by 2021, the City Deep/Kaserne terminals would handle between 900 000 and one-million TEUs a year. Source: Engineering News

Debate or Mitigate?

March 13, 2013 — Leave a comment

City Deep1_SnapseedBrowsing my various sources of news I came across this article featured in the FTW Online a few weeks ago. It prompted me to post it as an item for some detailed discussion in a follow-up post. Many followers have enquired what happened to my discussion on Inland Ports and the National Transit procedure. I guess it’s now time to respond, but not just yet – perhaps after what materializes at the event below.

What will be the impact of the new Customs Bill on City Deep’s inland port status?
This is the issue to be debated at a JCCI event scheduled for March 15. “The Johannesburg Chamber has been closely involved with City Deep, our international gateway for containerised cargo, for the past 36 years,” says the JCCI’s Pat Corbin. “We have actively promoted the benefits for traders of a combined transport (multi-modal) bill of lading allowing seamless movement through the coastal ports.

“But diametrically opposed developments are taking place which could have far-reaching impact on not just the future of the dry port, the supporting logistical suppliers and local employment, but also the coastal ports and the transport mode for inland movement.”

The event will examine Transnet’s major investments in City Deep and the Durban corridor, SACD’s expanded facilities and services, and the Customs Bill – with its intended removal of inland port status. Source: FTW Online