LOGISTICS & TRANSPORTATION CHALLENGES FOR OILS & FATS IN SUB-SAHARAN AFRICA

PREPARED BY: DERRICK FRANCIS FR WARING (INTERNATIONAL) (PTY) LTD

CONTENT

  PORT BY PORT ANALYSIS -  MOMBASA -  DAR ES SALAAM -  NACALA -  BEIRA -  MAPUTO -  DURBAN -  CAPE TOWN

  TANK STORAGE CHALLENGES   PERIPHERAL CHALLENGES   SUMMARY & CONCLUSION   ACKNOWLEDGEMENTS

MOMBASA  ANNUAL PALM IMPORT VOLUME: 550 000 (KENYA) + 200 000 (UGANDA) = 750 000 MT PER ANNUM  MOMBASA TANK SPACE : 60 000 MT (PRESENT) / 90 000 MT (AFTER EXPANSION)

 TANK TURN: 12.5 TIMES PER ANNUM (PRESENT)

 MBARAKI BERTH – SERVES LAFARGE AND KENYA FLUORSPAR WHO ENJOY PRIORITY- PIPED TO 3 TERMINALS

 MAIN PORT– PIPED FOR OILS TO 2 TANK FARMS - 9.75 M DRAFT, AT BERTHS 7 TO 10 (BERTH 9 IS 10.3M – ALMOST ENTIRELY DEDICATED TO MAGADI SODA ASH)

 (SOT) – 9.75 M DRAFT – 100% PETROLEUM AND LPG EVEN THOUGH 3 VEGOIL PIPELINES, STAINLESS STEEL FOR CAUSTIC AND CHEMICALS, BUNKER BARGES ENJOY PRIORITY BERTHING

 AVG 4-7 DAY BERTHING DELAY FOR VEGOIL TANKERS

 SUGAR / RELIEF CARGO AND PETROLEUM ENJOY PREFERENTIAL BERTHING PRIORITY

 INDIAN OCEAN PIRACY – IMPACT ON FREIGHT RATES , WAR RISK INSURANCE AND STOCK-OUTS.

 KENYA NAVY TAKE AN INTEREST IN ESCORTING VESSELS FROM TIME TO TIME

 LABOUR ISSUES / EQUIPMENT DOWNTIME / INEFFICIENT REVENUE AUTHORITY ARE THE MAJOR PROBLEMS

 DUE TO ANTI-DUMPING MEASURES, KENYAN REVENUE AUTHORITY IMPOSED 14 DAY LIMIT ON TRANSIT CARGO, REFERRED TO AS “CUSTOMS WAREHOUSE RENT” - US$ 3 PMT PER DAY PENALTY

 PORT CHARGES ARE REASONABLE COMPARED TO OTHER EAST AND SOUTH AFRICAN PORTS

 RAIL / ROAD RATES ARE HIGH – MORE THAN DOUBLE THE OCEAN FREIGHT TO SOME HINTERLAND LOCATIONS

 LACK OF SUFFICIENT CAPACITY IN RAIL AND ROAD LOGISTICS

 ROAD TRANSPORT – NOT COILED, LIVE STEAM INTRODUCED TO SOFTEN MATERIAL (INCREASES FFA AND PV)

 ROAD AND RAIL INFRASTRUCTURE AND EQUIPMENT IN A DEPLORABLE STATE

 RVR (RIFT VALLEY RAILWAYS) – PRIVATIZED KENYA AND UGANDAN RAILWAYS NETWORK - HAVE BEGUN IMPROVING INFRASTRUCTURE, WILL TAKE YEARS TO SHOW IMPROVEMENT

DAR ES SALAAM

  VESSELS KNOWN TO WAIT 2 TO 6 WEEKS FOR BERTHING   CURRENT TANK CAPACITY – 60,000 MT FOR VEG OILS   AVERAGE ANNUAL IMPORT VOLUME – 250,000 MT   AVERAGE TANK TURN – 4 TIMES   KOJ (KURASINI OIL JETTY) – 11 M DRAFT – 3 DOCK LINES, 183 LOA   COJ (COASTAL OIL JETTY) – 7 M DRAFT, 132 LOA, 2 DOCK LINES   PRIORITY BERTHING FOR PETROLEUM – CHEMICALS AND VEGOILS HAVE TO

WAIT!   TENDERS AWARDED TO MAKE VARIOUS IMPROVEMENTS TO OIL JETTIIES

DURING 2012/2013   FLOW METERS FINALLY WITHDRAWN   ROAD TRAFFIC CONGESTION   RAIL NOT AN OPTION FOR VEGOILS   MORE THAN 100% MORE EXPENSIVE THAN MOMBASA IN TERMS OF PORT

CHARGES

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NACALA

  DEEPEST PORT IN MOZAMBIQUE   ONLY ONE TANKER BERTH ALTHOUGH NOT HEAVILY

CONGESTED   PORT CHARGES EXCESSIVE (HANDLING / AD VALOREM /

SCANNER / WEIGHBRIDGE)   SHORTAGE OF MULTI-GRADE TANK SPACE ALTHOUGH

HAS INCREASED IN RECENT YEARS – TOTAL 9,500 MT   WITHIN THE REALMS OF PIRACY AREA – HAS IMPACT ON

FREIGHT RATES   RAIL AND ROAD OUTBOUND LOGISTICS AVAILABLE

ALTHOUGH RAIL PROBLEMATIC   BUREAUCRACY AND RED TAPE IS A MAJOR ISSUE

BEIRA

  DREDGING COMPLETED – NEW CHART DATUM IS 8 METRES

  QUAY DEPTH 9.5 METRES   NIGHT NAVIGATION NOT PERMITTED   VEGOIL TANK SPACE – APPROXIMATELY 24,000MT   ROAD AND RAIL OUTBOUND LOGISTICS

REASONABLE   NO DEDICATED VEG OIL BERTH BUT PETROLEUM

DOES HAVE A DEDICATED BERTH - # 12

MAPUTO

 TANK CAPACITY: 9,000 MT (MAPUTO) PLUS 4,700 MT (MATOLA)

 DRAFTS IN THE CHANNEL AND BERTHS ARE REASONABLE

 GOOD CONDUIT FOR TRANSIT CARGO TO SA – ALTHOUGH ROAD TRANSPORT to SOUTH AFRICA REMAINS EXPENSIVE DUE TO BORDER DELAYS / LACK OF BACK HAULS / TOLL FEES AND PORT CONGESTION

 MAPUTO (BERTH 16)  DRAFT OF 11 METRES

 ACCOMODATES CHROME ORE / COAL AND VEGOILS

 MATOLA (STEMA GRAIN)  DRAFT OF 10 METRES

 HANDLES VEG OILS ALTHOUGH GRAIN AND PETROLEUM ENJOY PRIORITY BERTHING

DURBAN

 OCEAN TANKERS HELD TO 7 BAR PRESSURE BY TANK INSTALLATION  SHORE TANKS WERE DESIGNED FOR EXPORT, NOT IMPORT  SHORE LINE INFRASTRUCTURE NOT TO INTERNATIONAL STANDARDS, SHORT IN NUMBER AND PUMP

CAPACITY TO HANDLE VESSEL PUMP RATE  PORT AUTHORITY – LACK OF EXPERTISE IN SOME AREAS – PORT CONTROL OFFICERS / PILOTS /

TUG MASTERS / DREDGING MASTERS – 10 TO 20 YEAR WAIT FOR EXPERIENCE TO DEVELOP  CLOSURE OF IV BERTHS NOT PLANNED PROPERLY – SHOULD HAVE BEEN A PHASED APPROACH -

COMLETE ONE AND CLOSE THE NEXT ONE – WILL CONTINUE TILL 2013  LACK OF MAINTENTACE PLANNING OF PORT INFRASTRUCTURE IS A SERIOUS ISSUE, BERTHS /

TUGS / ROADS / RAIL – 4 BERTHS CLOSED AT THE SAME TIME AS DEEMED UNSAFE  DRAFT RESTRICTIONS ARE NOT A FAULT OF PORT AUTHORITY, RESTRICTED TO DESIGN DEPTH.

BERTHS SHOULD HAVE BEEN RE-DESIGNED YEARS AGO IN LINE WITH INTERNATIONAL STANDARDS

 NEW PORT ENTRANCE CHANNEL OF 14-16 METRES, YET NO BERTHS OF THAT DEPTH AVAILABLE

 SHORE TANK SPACE LIMITATIONS – ONLY 120 000 CUBICS FOR VEG OILS (IV AND MW)

 TANKER BUSINESS RANKS SECOND TO CONTAINER BUSINESS WHICH ENJOY PILOT PRIORITY ON BERTHING AND SAILINGS

 ROAD REVAMP WILL TAKE ANOTHER 12-18 MONTHS, RAIL A NON-STARTER

 ROAD TRANSPORT – BAY 2 VERY CONGESTED, NEW SLOT LOADING SYSTEM MIGHT CREATE MORE ORDER

CAPE TOWN

  SHALLOW ENTRANCE CHANNEL OF 12.2 m TO 13.1 m.

  BERTHS: TB1 AND TB2 - 15 M DRAFTS !

  RED LINER BERTHING – IN LINE WITH INTERNATIONAL SAFETY STANDARDS – IF VESSEL DISCHARGING LOW FLASH AT TB1 AT NIGHTFALL, TB 2 CLOSED TO BERTHING AND DEPARTURES UNTIL DAYLIGHT!

  SHORTAGE OF DEDICATED VEG OIL TANK SPACE

  ONLY ONE SHORE LINE TO HANDLE MULTIPLE GRADES OF PALM AND SOFT OILS

  HIGH INCIDENCE OF DEMURRAGE

  BERTH TO TANK DISTANCE FAR – SLOW DISCHARGE RATE

  OUTBOUND LOGISTICS BY ROAD ONLY – NO RAIL

TANK STORAGE

  TANKS ARE GENERALLY NOT IN GOOD CONDITION, UNLESS PRIVATELY OWNED AND OPERATED

  DISTINCT SHORTAGE OF TANK CAPACITY IN SOME PORTS   TANK CALIBRATIONS ARE NOT ACCURATE IN SOME PORTS

  SHARED LINES FOR ALL TYPES OF PRODUCTS – HIGH RISK OF CONTAMINATION

  SHORTAGE OF TANK SPACE IN SOME PORTS CAUSES NEED FOR OUTLOADING DURING VESSEL DISCHARGE

  SHORTAGE OF SLOP TANKS

TANKS (BEFORE)

TANKS (AFTER)

PERIPHERAL CHALLENGES

  SECURITY IN SOME PORTS LEAVE ALOT TO BE DESIRED   GENERAL POOR STATE OF PORT INFRASTRUCTURE   NON-COMPLIANCE TO INTERNATIONAL STANDARDS   HIGH LEVELS OF CORRUPTION IN PORT ACTIVITIES IN

SOME SOUTH EASTERN PORTS   ROAD AND RAIL OUTBOUND LOGISTICS NEED TO BE

IMPROVED   BERTHS / TUGS / PORT ROADS AND ENTRANCES NOT

PROPERLY MAINTAINED   BUREAUCRACY BY PORT AND CUSTOMS AUTHORITIES

SUMMARY & CONCLUSION

 PUSH FOR IMPROVEMENT OF PORT INFRASTRUCTURE AND ACCOUNTABILITY BY PORT AUTHORITIES MUST BE DONE BY PORT USERS WHO MUST DEMAND SERVICE FOR THEIR WHARFAGE SPEND

 PERCENTAGE BASED PORT CHARGES IN SOME PORTS (CUSTOMS BROKERAGE / AD VALOREM) MUST BE SCRAPPED!

 VESSELS SPEND AS MUCH AS 40% OF THEIR TIME IN PORT – DUE TO PORT INEFFICIENCY!

 PORT AUTHORITIES MUST TAKE COGNISANCE OF COMMERCIAL CONSEQUENCES OF DELAYS AND BAD INFRASTRUCTURE ON SHIP OWNERS / CHARTERERS AND RECEIVERS

 EFFECTIVE COMPETITION IN CRITICAL PORT AND PRIVATE SERVICES NEEDS TO BE ADDRESSED AND ENCOURAGED

 INEXPERIENCE AMONG PORT PERSONELL MUST BE ADDRESSED – BEST MAN FOR THE JOB!

 RAIL TRANSPORT MUST BE REVIVED - OUTBOUND LOGISTICS NEED TO BE IMPROVED – ROAD TRANSPORT IS NOT THE ANSWER!

 PORT CHARGES MUST REMAIN COMPETITIVE BY WORLD STANDARDS FOR COUNTRIES TO BE ABLE TO COMPETE IN INTERNATIONAL EXPORT TRADE

 FOSFA PRACTICES NEED TO BE FOLLOWED THROUGH ON SHORE SIDE – SHORE TANKS AND ROAD TRANSPORT, HEATING, LAST CARGOES ETC

 PORT WEIGHBRIDGES MUST BE CALIBRATED PROPERLY AND REGULARY

 SLOW PACE OF PRIVATISATION IN PORTS (WHICH ARE SEEN AS NATIONAL / POLITICAL ASSETS) MUST BE ADDRESSED - PRIVISATION NEEDS TO HAPPEN TO IMPROVE SERVICE LEVELS!

ACKNOWLEDGEMENTS

  ODFJELL SEACHEM   TOKYO MARINE   RIVERSIDE TANKER CHARTERING   NACALA TANK TERMINALS   MANICA FREIGHT SERVICES (MOCAMBIQUE)   MENTOR SHIPPING AGENCY   ISLAND VIEW STORAGE (DURBAN)   TRANSNET PORT AUTHORITY