Learning event on “Trade and Regulation in Services in Africa”Addis Ababa, 5-6 June, 2013

CONTENTS

Dwell Time - South Africa Case study

Lessons for other ports

Africa Ports overview

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3

• 20 953 route kilometers

• 182 million tons of freight

• General freight and 2 heavy haul export lines

• Support to TFR for rolling stock maintenance

• 8 Commercial ports – Ngqura became operational during October 2009

• 16 Cargo terminal operations across SA ports

• 18 billion litresof petroleum products and gas through 3000km pipelines, mainly to Gauteng

• Transnet Capital Projects

• Transnet Property• Transnet

Foundation

TRANSNET IS THE CUSTODIAN OF PORTS, RAIL AND PIPELINES IN SOUTH AFRICA

TRANSNET OFFERS DIVERSIFIED PORT SERVICES IN SOUTH AFRICA THROUGH A COMPLEMENTARY PORT SYSTEM

Containers

Break bulk

Bulk

Cars

Liquid bulk

Commodities Saldanha

Cape Town

Ngqura

East London

Durban

RichardsBay

Port Elizabeth

()

footprint, ( ) joint ventureSource: Transnet Port Terminals

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5

Landlocked countries

Mauritania

Western Sahara

Maroc

Algeria

Tunisia

Lybia Egypt

SudanSénégal

Côte-d'Ivoire

Mali Niger

Nigeria

Tchad

Cameroon

Central African Republic

ZaireCongo

Gabon

Ethiopia

Eritrea

Somalia

Kenia

Tanzania

ZambiaAngola

MozambiqueMadagascarZimbabwe

GhanaBénin

Burkina Faso

TogoLiberia

Guinea

Uganda

RwandaBurundi

Malawi

NamibiaBotswana

South Africa

Lesotho

Equatorial Guinea

Swaziland

Djibouti

Cost to export containersUS$ ’000s/TEU

2.32.3

Botswana

DRC

0.40.71.0

China

Mauritius

SA

Maritime countries

Emerging and landlocked countries suffer even more than maritime countries from a transport costs perspective

Mauritania

Western Sahara

Maroc

Algeria

Tunisia

Lybia Egypt

SudanSénégal

Côte-d'Ivoire

Mali Niger

Nigeria

Tchad

Cameroon

Central African Republic

ZaireCongo

Gabon

Ethiopia

Eritrea

Somalia

Kenia

Tanzania

ZambiaAngola

MozambiqueMadagascarZimbabwe

GhanaBénin

Burkina Faso

TogoLiberia

Guinea

Uganda

RwandaBurundi

Malawi

NamibiaBotswana

South Africa

Lesotho

Equatorial Guinea

Swaziland

Djibouti

SOURCE: www.mapcrow.info

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African Port Challenges

• Infrastructure development (Ports & Rail) not in line with

trade growth in Africa;

• Poor Port Rail Integration, including cross border

interfaces

• African countries are trading more with the outside world

than among themselves;

• Depth of ports and harbours cannot accommodate large

vessels, hence most of the traffic is fed from

Mediterranean and Middle East ports

• Port congestion leading to longer ship turnaround time

and longer cargo dwell time

• Lack of predictability and reliability in the African ports

system

African Ports have several challenges, however, planning together as a Region can eliminate some of the bottlenecks. .

Source : African Development Bank, World Bank, Cargo Dwell time report September 2011

CONTENTS

Dwell Time – Transnet Case study

Lessons for other ports

Africa Ports overview

Sunday Tribune17 Nov 2002

Sunday Tribune17 Nov 2002

Business Report15 Oct 2002

Business Report15 Oct 2002

Mercury29 October 2002

Mercury29 October 2002Mercury

13 Nov 2002

Mercury13 Nov 2002

Business Day18 Nov 2002

Business Day18 Nov 2002

Star13 Nov2002

Star13 Nov2002

Mercury16 Oct 2002

Mercury16 Oct 2002

Mercury4 Nov 2002

Mercury4 Nov 2002

Mercury14 Nov2002

Mercury14 Nov2002

This is where we were in 2002 …

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DURBAN CONTAINER TERMINALS - CURRENT LAYOUT - 2012

DCT Pier 1

DCT Pier 2

Salisbury Island

Navy Base

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Durban(Pier 2)TEU’s

Durban (Pier 2) has seen a 3% growth in container traffic over the past 10 years despite additional capacity coming on stream in other ports . .

Durban (Pier 1)TEU’s

Source: Africa Analysis

2012

2011

2010

1,892,451

2009

1,826,945

2008

1,950,722

2007

2,148,344

2006

1,984,830

2005

1,705,040

2004

1,600,689

2003

1,405,207

2002

1,297,332

2001

1,185,130

2000

1,127,648

1,821,2881,646,055

+3%

+19%

2010

543,117

2009

490,335

2008

457,588

2007

247,212

677,345

2011

593,948

2012

SA plays a key role for regional integration through its ports system.Transhipment patterns in South African Ports show Mozambique and Angola as the 2 largest African countries for Transhipment (46%)

Source: NAVIS Extraction analysis: April 2012 to March 20139

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Working in a collaborative manner (Customers, Ports users and Transnet) was the only recipe that would yield positive results

TPT TFR CLOF

(Shipping Lines)

Shippers

Council, Customs

(Cargo Owners)

TNPA SAAFF

(Road haulers)

INTERIM ADVISORY BOARD

= Transnet operating divisions

Co-chaired by Transnet and the Shipping lines

• This team met every 2 weeks for 2 years

• The board defined and agreed to a set KPI’s of what we wanted to measure each supply chain partner

• We had a media black out – Nobody spoke to the media except for the 2 chair persons

PortOperator

Landlord & Marine Services

Freight Forwarders

OperationsAudit Team

Rail Operator

ShippingLines

Technical

Task

Team

Cargo owners

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RailINTERFACE

HOUSEKEEPING STRATEGYAND DISCIPLINE

COSMOSFUNCTIONALITY

INCENTIVESCHEMES

EQUIPMENT MAINTENANCE, STRUCTURE, DE-PLOYMENT, PROCUREMENT AND CONTRACTS

ORGANISATIONAL STRUCTUREAND FACILITATION

OPERATIONAL SUPPORT ANDFACILITATION

OPERATIONALSTRATEGIES

THIRD PARTYOPERATIONAL

INFRASTRUCTURE

The Advisory Board used an Analysis Tool called an “Enabling Blocks Methodology”

TRAININGOPERATIONAL STAFFING LEVELS, SHIFT

PATTERNS AND PROCEDURES

EB 4

EB 5EB 6 EB 7

EB 8 EB 9 EB 10

EB 11 EB 12

EB 1 EB 2

EB 3

EB = enabling blocks

- Stacking strategy - Dwell time

- Customer behaviour patterns (ETA, ICL)

• Business Process re-engineering on the waterside and landside− Bulk runs for large consignees− Automated gate facilities − Evacuating the boxes via rail to the inland terminals

• Correction of Third party behavior− Collection of traffic over a 24 hour period from Truckers

• Training for Equipment Operators, Planners and Port Workers

• New Commercial contracts (CTOC’s) included− 3 free storage days− Penalties for exceeding the 3 days free period− Compliance to ETA and information accuracy

• Stacking Strategy − Loading of empties by type and not by number

• Introduction of new capacity− Pier 1 container terminal

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How did SA and Transnet overcome this problem ?

Work in collaboration with stakeholders

Source: DCT Files, Planning

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Despite our share of Transhipment traffic increasing, we have managed

to keep the dwell time to 3 to 4 daysMillion TEU,

Source: Transnet Port Terminals, 2013

225,392

708,783

711,880

2011

1,821,288

334,241

740,296

746,751

2010

1,892,451

456,235

2007

2,148,344

440,766

860,147

847,431

2006

1,984,830

412,773

782,750

789,307

2005

1,705,040

368,352

657,813

678,875

2004

1,600,689

251,032

682,128

667,529

2003

1,405,207

235,402

590,300

1,127,648

253,024

465,772

408,852

579,505

2002

1,297,332

285,400

529,218

482,714

2001

1,185,130

266,192

484,927

434,011

2000

1,646,055

733,852

2009

1,826,945

537,888

617,856

671,201

2008

702,364

560,574

717,366

672,782

Transshipment 

Export 

Import

2012

1,950,722

0

2

4

6

8

10

12

14

2005 2006 2007 2008 2009 2010 2011 2012

TS 

Export

Import

0

657

0

Day 63,483

1,743

Day 52,143

1,071

Day 41,317

Day 1-3

12 m 

6 m

Storage charges (ZAR) Dwell Time

This was the results in 2004. . . .2 years later

Mercury9 June 2004

Mercury9 June 2004Mercury

7 June 2004Mercury

7 June 2004

FTW21 May

2004

FTW21 May

2004

Taking positive international coverage and exporting this methodology to other international ports, including Africa …

CONTENTS

Dwell Time – Transnet Case study

Lessons for other ports

Africa Ports overview

What were the resistance factors ?

• Convincing Supply chain partners that we all responsible for the inefficiencies of the logistics chain

• The ability to improve the situation without any capital expenditure (tackling the low hanging fruit first ) – Due to long lead times for port infrastructure and equipment

• Getting support from “Third Party” supply chain partners to change their behaviour eg :

− Shipping lines to conform to ETA (3 hours either side of ETA) − Shipping lines to ensure 95% data accuracy for Import/Export

container lists − Large consignees to move traffic during the night eg. Toyota, SAB− Trucking companies to work 24/7 instead of a 9 hour day – Spread

the load

• Shipping lines not wanting to drop the surcharge ! Decision makers are not local.

• Cargo owners paying the port additional (surcharge) and kept writing to Government about service delivery

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Some recommendations from our South Africa experience . . .

Establish a forum or an advisory board where issues can be discussed with all supply chain partners• Create an agreed set of KPI’s• Measure bi-weekly all the agreed KPI’s• Use an independent operations audit team if necessary

Choose the high impact problems to be resolved first • Agree with port users on the problem to be resolved and that there

will be pain during this time (reducing the dwell time of cargo in the port)

• Bring in additional experienced resources to help if necessary• Collaboration with other ports in the region

Communication internally and externally• Keep customers and port users informed and involve them

to be a part of the solution• Assign one talking head as the ports reputation can be at

stake – Consider a media black-out period• Keep government and customers informed of progress

Back-up

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Durban Container Terminal handled one of the largest vessels that called in an African Port in 2013 - MSC FABIOLAWhat does this mean ?

• Larger discharge of

containers into the stack

• Capacity in the stack to

handle the cargo

• Stacking strategy become s

important to maintain dwell

time and customer

satisfaction

• Evacuation of traffic via road

and rail must be efficient

• Necessary equipment

(Cranes & RTG’s )

• Customs and Border

processes must be semales

• Deeper berths

Ship Photos: 53