Today in the news is the latest data being published from the World Bank Port Index and SA Ports are rock bottom with nowhere to hide. Alarm bells should be ringing because a failed export import hub like a Port impacts the economy directly. To have 3 Ports in the bottom 8 Ports out of 403 by ranking must take some effort as how bad must one be to achieve such a disastrous score.
South Africa has the worst Ports in the world according to the World Bank Port Index which scores against the number of vessels, containers and waiting time across 403 ports world wide. This is all data driven so there is nowhere to hide and manipulate the figures to tell another story. 175 000 vessel calls along with 245 million container moves plus the waiting outside of port and moving time for these container moves are fed into a program to give the results.
The SA government was quick to highlight that the Port of Cape Town is the most improved Port according to the rankings year on year which maybe true having moved up 3 places. The problem is when you are dead last you can only go up as there is no dropping any further when you are already rock bottom.
I think it is quite clear why Maersk abandoned the SA Ports when the company abandoned the "American Express" route last month which is the direct to US market route. The MSC shipping company is carrying on this direct route which ties up a total of 18 container ships.
How often have we heard the saying "time is money" and shipping is not cheap as every day a vessel is delayed this has a knock on effect at the back end. I think everyone knew there were serious problems when the major shipping lines were avoiding Cape Town and Durban Ports when travelling round the Cape Of good Hope stopping either in Angola or at Mauritius. Cape Town would normally have been an obvious choice, but due to constant delays and a decaying infrastructure vessels sailed on taking their business elsewhere. Refueling and replenishing supplies is big business and SA Port cities lost out on this boost to the economy.
The Southern African Association of Freight Forwarders (SAAFF) stated that the country is losing R1 billion ($60 Million) per day to lost trade as a result of the Port inefficiencies. last year just the apple and pear industry reported the Cape Town Port with all the delays had cost them R1 billion in lost revenue which impacted 100 000 jobs. Fruit being exported waits for no one as this product is time sensitive.
The problem with any SOE company in SA is that the government deploys pro government personnel to run these enterprises and they are not qualified to do the job. The Ports in SA should have never been allowed to fall into disrepair in the first place and now will take huge investment to get back on track.
Cape Town has replaced 19 new container cranes and bought new tug boats, but more importantly needs proper leadership that can understand and run the port efficiently and on time. Delays are unacceptable as each day a vessel has to wait it is costing the shipping companies anywhere between $100K and $1 million daily. Maersk introduced a congestion charge on containers destined for SA ports back in 2023 and this was between $200 and $400 per container. This would eventually be paid for by the consumers who would be the end users of these products not forgetting the demurrage charges over and above containers that are late into port. Just imagine every container is late into port and has all these excess charges how much this adds to the inflation of every product imported.
You often ask yourself if this type of behavior is done on purpose to sabotage the economy and it surely cannot be and comes down to those in charge being that useless. Common sense tells you to employ the best people possible to do the job as it then makes you look good and the country and entire economy benefits. When you see these types of statistics and where SA Ports lie on a world index it is clear why the country has such a high unemployment rate as very few things are working properly.
Posted Using INLEO