Make or break for South Africa’s main logistics corridor
Make or break for South Africa’s main logistics corridor
The overall cost of logistics is a negative factor in South Africa’s global competitiveness and a barrier to regional development. NICK PORÉE has ideas about what needs to be done to fix the current mess.
The importance of logistics to the South Africa economy is underscored by the fact that the logistics industries – which are described in the Statistics South Africa system as the “transport and storage industry” – earned income of R592,6 billion (19% of GDP) in 2019, before the impact of the Covid-19 pandemic. Transport costs make up 57% of the total. Despite this impressive performance, there are very significant inefficiencies in the system which have been estimated to cost R100 million per day.
The recent World Bank Report rated South Africa’s ports as almost the worst in the world for efficiency and costs. The delays on the North-South Corridor (NSC) have been costing approximately R400 million per week.
A 2021 Nathan report shows the data for the port of Durban and the NSC in 2017 and projected volumes in 2040. The table (see page 6) is an excerpt from the report, showing only the Durban data from the 2017 volumes and 2040 projections to and from each country. The projected volumes for the port of Durban assume a growth rate of approximately 4% per annum, which may be ambitious with South Africa’s current GDP levels. The estimates for transhipment and railway tonnage may also be questionable. It is, however, noteworthy that the transit through South Africa on the NSC is expected to increase by 456% with a 293% increase in tonnage through Beitbridge.
If the overall projections are to be achieved, there is an urgent need to address the many issues around Durban’s logistics performance. The implications of these projections are very important from a logistics perspective, as failure to provide logistics capacity will escalate the costs and hamper any planned trade expansion.
The current logistics restrictions of costs and delays are barriers to investment, industrial growth, employment creation and poverty alleviation in South Africa and the region. There is an urgent need to review the problems and to redress the 20-year backlog of investment and development, which has contributed to the current inefficiencies.
Planning for the necessary capacity enhancements will require very significant investments by the government and private sector; there is a need for collaborative planning. It is imperative that a holistic planning exercise is done and endorsed by key decision-makers within the public and private sector. This is necessary to be able to drive and influence a productive dialogue and urgent action plan.
This must be properly coordinated between government state-owned entities (SOEs), agencies, authorities, and the private sector industries which are the users and operators in the logistics sector. The historical government perspective that freight transport is a state function is untenable when viewed against the current freight volumes on rail and road. The fact that transport and logistics does not figure as an element in the Nedlac process is indicative of the central planning perspective which marginalises private sector industry and is limiting investment and growth.
The key issue in resolving the Durban corridor logistics problems is that the plan must necessarily cover all aspects and be recorded and monitored to avoid unilateral action by participants to the programme. The danger is that further politico-corporate decisions by the port authority may severely restrict the potential for holistic development of the Durban logistics framework over the next 20 years and hamper the realisation of the integrated solutions.
The primary issues requiring coordinated infrastructure planning and supportive system development are as follows:
Corridor access routes to Durban
The N3 between Durban and Pietermaritzburg is reaching capacity at peak periods and is very vulnerable to disruptions which can have crippling implications for industry and port logistics and has very negative safety connotations for private passenger traffic. There is urgent need for an alternative route to the South Durban Basin and port.
A further primary motivation for the alternate route development is to permit the closure of Bayhead Road to facilitate port expansion. The most logical option for an alternate route will be to develop a Western Freeway by upgrading the R603 from Umlaas Road via Eston and Prospecton. The freeway would pass between the old airport and the Natref refinery then through a tunnel under the Bluff to link into the intersection at Bayhead precinct of the port.
The alternate route will also open up the largest potential area for big industrial expansion in eThekwini with good access to the port. This is a necessity for further industrialisation in the Metro area, as large areas (more than 40%) are already built up or used for tribal and township residential. Construction of a freeway will require a change of jurisdiction of the relevant roads to the National Roads Agency, as the Province and Durban ratepayers will not be able to fund and then manage the corridor development. It will also integrate with the planned Pietermaritzburg Bypass from Cedara to Umlaas Road.
Logistics space
The current container handling volumes are supported by more than 40 private sector container depots scattered over more than 100 hectares, on properties within about 20 km of the port. Future development must include efficient, modern sites for private road and rail logistics operations. This will be best located on the 500-hectare old airport site, with direct road and rail connections to the Bayhead terminals. The planning of this area should be based on private investment by commercial logistics undertakings to achieve world-class facilities and efficiencies.
eThekwini metro street plans
The current Metro planning to upgrade Bluff Road will provide short-term relief. Then the construction of an elevated roadway along Solomon Mahlangu Road will create the necessary route around the future port expansion in the Bayhead area to provide access between Bayhead and the N2 and city industrial areas. If this road development is also integrated into the NRA national freeway management system it will enable commercial development of concessions and private investment.
Port expansion – containers
The port is operating at capacity limits due to the 20-year hiatus in planning and investment by the SOE, despite repeated warnings. This is causing delays to maritime and landside operations. Port management and the logistics industry are doing a heroic job within the spatial and equipment limitations over which they have no control. The delays in berth deepening and expansion require urgent investment. The infill of the Salisbury Island basin and the basin between Piers 1 and 2, with deep-water berths, should be coordinated with the excavation of the port expansion and widening of the Maydon Channel.
The planned port expansion across Bayhead Road into the current rail yard (as planned in 2010) is overdue and now needs urgent action to provide an additional eight to 10 berths and back-berth space to cater for anticipated container demand. The construction of the port expansion and Terminal 3 as a private initiative will make an attractive prospect for investment.
Port expansion – breakbulk
The port expansion at Bayhead will provide scope for the Multi-Purpose Terminal (MPT) breakbulk and ro-ro operations to be moved from the Point area to the new bayhead basin. This will free up the Point for Metro planning of cruise ship terminals, tourist facilities and waterfront activities.
Port relocations
Removal of the Point MPT and ro-ro operations from Point will reduce traffic conflicts on Margaret Mngadi Road. The relocation of the MPT must also include provision for heavy lift and handling of abnormal loads at the new Bayhead MPT as well as direct road access to the western freeway development for inland movement of abnormal loads. This will also relieve the current movement of abnormal loads through the city centre.
The fuel handling facilities from Island View complex can be relocated to an area near the Natref refinery to be supplied by pipeline from the wharf-side tank farm. This will relieve the bayhead traffic volumes and permit expansion of the road and rail distribution system for fuels to the whole of KZN, northern EC, and eSwatini. It will also improve the safety of transport of these dangerous goods through dense traffic and residential areas.
Relocation of the naval base from Salisbury Island to Richards Bay would improve the defences against piracy and insurgency and provide additional space for training and maintenance due to proximity to the proposed ship building and repair area.
As part of the widening of the Maydon channel, consideration can also be given to relocating the marine reserve from the Bayhead area to a site between Wilsons Wharf and the Yacht mole, by scientifically transferring and cultivating a mangrove habitat. This would provide a useful facility for marine biology studies at UniZulu and offer tourist potential without interference by port activities.
The planning and administration of such a coordinated development plan will require the creation of a high-level Public-private partnership (PPP) as a Special Purpose Vehicle to coordinate the activities and funding of the different entities and contracts. There is urgent need for a definitive study of the various components of the plans to provide motivation and assurance of cost benefits from each activity. A rigorous monitoring system is needed to ensure transparency and adherence to cost and time schedules.
As funding will be required from a number of sources it will be necessary to prepare specific project frameworks and then requests for proposals to execute each contract within the overall package. The planning and scheduling of activities over the 20-year time frame will require a solid organisation structure and professional accountability. It is visualised that such a process could be managed by Operation Vulindlela and reported directly to Parliament.
| Nathan Estimates of Volumes on N-S Corridor 2017-2040 | |||
| NORTH-SOUTH CORRIDOR | 2017 | 2040 | Variance |
| METRIC TONNES (MILLIONS) | |||
| DURBAN PORT | |||
| Total Annual Port Throughput (mtpa) | 69 | 148 | 216,2% |
| Import to and Export from South Africa (mtpa) | 60 | 108 | 181,1% |
| Transit through South Africa on North-South Corridor (mtpa) | 5 | 21 | 456,2% |
| Transhipment through Durban port (mtpa) | 4 | 19 | 457,2% |
| Transhipment as % of transit traffic | 1 | 1 | 100,0% |
| Regional Trade on North-South Corridor (mtpa) via port | 9 | 20 | 211,6% |
| Total ex RSA on N-S Corridor | 14 | 41 | 292,9% |
| mtpa rail | 0,29 | 3,0 | 1041,7% |
| mtpa road | 14 | 37 | 270,7% |
| Total tonnes on N-S at Beit bridge | 14 | 41 | 292,9% |
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