Durban and Maputo face off

Despite the popularity of the Port of Durban, experts argue that the Port of Maputo is more cost-effective and efficient – something South African businesses can’t ignore if they hope to remain competitive. MARISKA MORRIS investigates

The Port of Durban might not be able to compete with the Port of Maputo for much longer as experts point to the time and money that can be saved by simply diverting goods to Mozambique. At a Transport Forum session in June, John MacDonald, regional manager at CMA CGM, described the Maputo Port as a Tesla Roadster.

“We need to change the mindset of the industry, which still perceives the Port of Durban as a Jaguar, since it is the biggest port in South Africa and very industrialised,” he explained. “The Port of Maputo is still perceived as the beaten-up old truck, which is not really working and too high risk, but that isn’t the reality. The Port of Durban is not a premium Jaguar; there are a lot of problems.”

Congestion at the Port of Durban is one of the biggest challenges, with some vehicles waiting days to enter the port or offload goods. Some even leave cargo in the port, while they continue to work elsewhere. Ships are also battling.

“An unprecedented number of vessels are bypassing South African ports because of weather-related issues and congestion,” MacDonald added. Upgrades to the port are continuously being delayed and there seem to be no plans to relieve congestion. Maputo, however, offers shorter routes with minimal waiting periods.

“Just down the road we have a wonderful Tesla Roadster, which has been developed and upgraded with good infrastructure and no congestion. There are better crane hours available in Maputo than in Durban,” MacDonald said.

His sentiment was shared by Barbara Mommen, CEO of consulting firm Coalescence, who pointed out it was possible for transport operators to get into and out of the Port of Maputo in a day.

“What is not going to happen at Maputo is a scenario where a truck sits at the port for three days. If South Africans are smart, they will make use of it,” she said. The Mozambican port also offers good infrastructure with capacity to house 1,2-million tonnes of sugar, 250 000 tonnes of grain and 750-million tonnes of coal with plans to increase capacity to 11,5-million tonnes in the near future.

There is also a new 18 000-m² container depot at Komatipoort, Mpumalanga, which Mommen hopes will attract more fruit farmers. The depot also has a warehouse facility of 1 000 m², two reach stackers and three fork lifts.

Aside from no congestion and great infrastructure, Maputo is also much closer to Gauteng than Durban, which translates to less fuel consumption and a longer vehicle lifespan. MacDonald estimates the cost of transporting goods to Maputo versus Durban at a worst-case scenario of R20 per kilometre, making the port a clear winner.

It would, for example, cost around R8 080 to travel the 404 km from Nelspruit to Maputo compared to R28 200 to travel the 1 410 km to Durban.

The shorter distance also benefits transport operators carrying perishable goods. MacDonald commented: “Fruit, for example, will be of better quality, because it is on a vessel a week earlier at Maputo than in Durban.”

MacDonald said that most of the exported South African products can be redirected to Maputo, which businesses should seriously consider, especially in light of the additional 8 000 trucks expected on the N3 to Durban during the 2019 peak season in December.

While business might shift away from Durban, the Maputo corridor offers new opportunities, especially for local transport operators – if they can provide competitive pricing. When MacDonald approached some South African transport operators, he found cost a big concern.

“South African truckers wanted to charge nearly R50 000 for a move to Maputo compared to R30 000 to Durban. Why charge more when Durban is going to be the longer route that is more tiring for the driver with potential congestions at the port. The trip will take three to four days, while truck drivers can travel to Maputo in a single day,” he said.

He added that if South African transport operators didn’t take advantage of this opportunity, the work would go to Mozambican companies. “The Port of Maputo should be seen as an extension of the South African supply chain. If truckers are on board, they will be the ones making money,” he said.

While the Port of Maputo should be an obvious choice for many South African businesses operating in the north, there will understandably be a period of adjustment. MacDonald noted: “The reality is that it will take the industry three to five years to change its perception, but things are moving quickly. If we don’t stay abreast with what is happening, we are going to be left behind.”

Local businesses have less time to adjust than they might think. South Africa is quickly losing its competitive advantages. At the Transport Forum, Duncan Bonnett, director of the consulting firm Africa House, observed: “South Africa has an influence illusion. We still talk about South Africa as the gateway to Africa.

“It’s not. The country is the gateway to southern Africa and not even all of it. South Africa is not the gateway to Angola and only partially the gateway to Mozambique. It is pretty much the gateway to the landlocked countries up to the Democratic Republic of Congo – and that will change with the development of other ports and infrastructure.”

With much of eastern and western Africa expecting significant economic growth, South African will face much more competition in winning over importers. Bonnett explained: “Investors are not looking south. The Port of Maputo aims to double its capacity over the next few years. If the transport industry doesn’t get its act together, it will miss out.”

South Africa is also not a talking point for many big investors like China. “South Africa is not on the radar. This country accounts for less than four percent of China’s direct foreign investment globally. Last year, Bangladesh was granted more investment and direct aid from China than the entire African continent,” Bonnett said.

With very little investment expected and growing economies threatening South Africa as an import-export hub, it is more important than ever to start thinking local and looking to southern Africa for business. Bonnett noted: “The rest of Africa is the biggest market for South African products.

“It’s not Europe or China, but rather our neighbours that are keeping local factories open. Countries like Namibia and Botswana are among the biggest importers of South African goods.” He added that construction companies in Botswana involved in the rail projects are importing 30 percent of their materials from South Africa.

Local businesses are also losing out on the opportunity to export to countries like Kenya, which is one of the fastest growing economies on the continent. Currently, only three percent of South African exports go to Kenya.

However, not everyone is optimistic that South Africa will be able to take advantage of these opportunities. Mommen said: “It is unlikely that South Africa will take sufficient notice, soon enough, to make it work. We need to look at our own competitiveness. We are losing ground faster than we can probably make up in the next couple of years.”