spearfishing - now media...spearfishing and free diving accessories. allen’s railgun is considered...
TRANSCRIPT
JUNE 2015
HOW TO DOUBLE DURBAN’S
CONTAINER CAPACITY
over another port chargeOUT OF SORTS...
DURBANFREIGHT & TRADING WEEKLY
SPEARFISHINGwith exporter extraordinaire Rob Allen
FTW3176SD
www.ftwonline.co.zaCONTENTS
June 2015 Durban 1
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PRIVATE SECTOR SCHEME TO DOUBLE DURBAN CONTAINER CAPACITY
sa ports must up their game
NEW DEAL ADDS RAIL VOLUME
DEMAND GROWS FOR CROSS-DOCKING
SEAFREIGHT
4
joint efforts to speed up turnaround6
fluctuating markets demand flexibility14
growth on all routes
LOGISTICS
8
increase in project shipments12
plans afoot for new warehouse facility22
sorting fee bumps up port charges
GENERAL NEWS
10
berth deepening awaits ‘green’ light16
energy crisis slows sluggish growth20
13 11
3
RB ADDS NEW STORAGE FACILITY
18
2 Durban June 2015
Liesl Venter
Successful shipping is as much about finding the right freight forwarder as it is about having a
sought-after product.Just ask Durban-based
manufacturer and exporter of free diving and spearfishing equipment, Rob Allen, and he will tell you he has used the same forwarder for more than 20 years. And he has no intention of changing to someone new anytime soon.
“Because I know what I have in my forwarder,” he says. “It’s a trustworthy relationship that has been built over time. We get a solid service that is of extremely high quality at a good price and there is never any doubt that our best interests are at heart. We could not ask for anything more.”
“At least 80% of our product is for export. And we just cannot keep up with demand which means we are constantly shipping under pressure, having to move product as quickly and as efficiently as possible at the right price. Having someone in place who handles our exports safely, securely, reliably without exorbitant cost is definitely a benefit to our business.”
Allen’s products are shipped to 77 destinations across the world,
with the US and Australia its two biggest markets.
An avid spear fisherman, Allen first started manufacturing spearguns after taking up the sport in his early twenties. He was soon spending every spare moment building spearguns and ultimately decided to do it commercially.
Today the company produces a range of products, including spring steel spears for a variety of spearguns as well as a full range of spearfishing and free diving accessories. Allen’s Railgun is considered to be one of the most accurate and versatile spearguns on the planet. Various fishing world records have been set using his equipment.
“Designing and manufacuring the product is one thing, getting it to your client is completely another,” he says. South Africa is far from its markets and logistics costs are high. Add to this the regulatory environment, and the importance of a knowledgeable forwarder cannot be over-estimated, says Allen.
The use of airfreight, often considered to be an expensive mode of transport, has been on the increase, he says.
“One reason for this is that demand for our products is exceeding our production at present and so by the time the orders are completed customers are happy to use airfreight so that they can just get their goods
as quickly as possible,” he says. “The other reason is probably that airfreight to certain markets is not necessarily that much more expensive. Airfreight to the US, for instance, is currently
only around 8-12% more than seafreight on small orders. And in light of the benefits gained when using air it is not nearly as big an expense as one would think.”
He says they are increasingly using seafreight for the more remote areas that are just too costly for airfreight. Mostly shipping LCL (groupage mode) from Durban, the company has made the port city its hub. “We import a lot of the raw materials that we use. Latex rubber is one
example as there is just no local manufacturer that can provide the quality we require. Same goes for the steel that we use in our shafts and spears. It is of extremely high quality and so all of that has to be imported.”
He prefers to import in bulk as it is more cost effecitve, but it is dependent on cash f low. “It really does make more sense to do that. We can get up to 40% discount on some of the products we import if we take it in bulk and bring it in a year in advance. That is a massive saving.”
Allen says keeping costs to a minimum is crucial for exporters, even with the favourable rand dollar exchange rate.
“Manufacturing in South Africa is under pressure. We have been doing this for 25 years and we have seen the challenges increase over the years. Legislation and regulations guiding exporting are becoming more complex by the day and there is not always a lot of support for exporters,” he says stressing even more the importance of a good forwarder – which he has found in Jacqui Etschmaier of Famous Pacific Shipping (FPS).
“Reliability is extremely important,” says Allen. “You upset a customer in the modern business environment, you lose them. It is not a risk we take.”
SHIPPER PROFILE
Hobby turns into lucrative export business
Legislation and regulations guiding exporting are becoming more complex by the day and there is not always a lot of support for exporters.– Rob Allen
“
www.ftwonline.co.za
Rob Allen supervises the packing of free diving and spearfishing equipment.
June 2015 Durban 3
Investment in the port of Maputo is helping to improve
productivity, making it a more attractive complementary port to Durban, in the view of Johann Botha, commercial director of the Maputo Port Development Company (MPDC).
Volumes through the port grew by over 12% from 2013-2014 to 19.3 million tons, and the port is continuing to add capacity through the roll-out of its masterplan – despite the current drop in commodity volumes due to global trends, says Botha. “We
have implemented interventions to minimise the effect of the negative commodity cycle,” he said.
This year will see the conclusion of the expansion of the chrome slabs, adding two million tons a year to the capacity of the port, and bringing the total slab capacity to 4.8m tons a year.
Among the initiatives to improve vessel turnaround time is the acquisition of two Liebherr mobile harbour cranes, which will increase productivity from
220 gross tons per hour (gtph) to over 600, according to Botha.
Berth maintenance dredging was completed in December 2014 to get all berths to an average of -12 metres draught, which enables the handling of vessels up to 60 000 tons.
Dredging of the Maputo channel is due to start later this year, which will increase the draught from -11.5 to -14.2 metres and accommodate vessels of up to 80 000 tons.
“We are also improving our landside efficiency by building a
northern boundary road, which will allow for better port traffic management. The works will be completed this year,” he says.
A pilot six-month project in which the MPDC has taken over the shunting operations in the port has improved the turnaround time of trains by 40%, according to Botha.
This part of the masterplan is designed to facilitate the migration of cargo from road to rail.– Ed Richardson
A private sector scheme that would almost double the
maximum achievable container capacity of the Port of Durban has met with a strong challenge from Transnet.
When Transnet group executive for planning and sustainability, Mark Gregg-Macdonald, told FTW in our May 8 issue that “no matter what we do, at the existing Durban port we will get a maximum capacity of 4.8 million TEUs,” he evoked an immediate response from Kevin Martin, MD of Freightliner, and immediate past chairman of the Durban Harbour Carriers’ Association (DHCA).
With the use of the “mostly underutilised” 507.2-hectare Bayhead PX block some two kilometres from the current container terminals at Piers 1 and 2 as a back-staging area, you would more than double the existing terminal footprint and increase the container port’s maximum capacity to some 7-8 million TEUs per annum, Martin told FTW.
“Only exports have a need to remain near the waterside, as they have to be loaded on board a ship,” he said. “So all imports and
transhipments could be moved to the PX block for staging and dispatch.
“If only exports are left in the terminal we are effectively doubling the terminal capacity - without the cost of digging out
the Bayhead for extra berths and creating a whole new container terminal, as is currently on Transnet’s drawing board.”
To move the boxes to or from the terminals to the PX block, Martin suggested
building a private roadway (to comply with customs’ requirements) and acquiring a fleet of road train combinations.
“Each road train unit would comprise one prime mover and two sets of 3 x 12 metre trailers,” he said. “Each road train can move a possible six TEUs every 20 minutes on a ‘kick-off ’ system (hitch on and off remotely) – a total of 378 TEUs per working day or 124 740 TEUs per year, each of 330 working days.”
Covering the cost of this road train set-up, Martin calculated, Transnet could charge US$10/TEU for the road leg. This would see each road train set earning
US$1.25 million (almost R15m) per year.
The benefit from a trucker’s point of view would be that the current traffic flow – all centralised on the terminals – would be split into two, each using a completely different road system.
“This,” said Martin, “would halve the trucks on any given road; allow the terminal to effectively service an increased need; extend the life of existing facilities in the whole south port basin; and buy us time to bring the airport dig-out on stream in a just-in-time manner.
Now Peter Besnard, CEO of the SA Association of Ship Operators and Agents (Saasoa), sent Martin’s presentation to Gregg-Macdonald.
And after his initial perusal of the document, Gregg-Macdonald told FTW: “I’ve asked our terminal guys to have a look at this.”
He also agreed to send us the more detailed response from
terminal management once it had been completed.
“But, from my initial look at this I can see one basic flaw,” Gregg-Macdonald added.
“You can have as much container space as you want, but the berth capacity is a restraint. Handling a maximum capacity of 7-8 million as Martin suggested is just not possible without extra berths.”
Although Martin answered that with a recommendation to double up the number of ship-to-shore (STS) cranes per vessel and create “virtual” extra berths that way, Gregg-Macdonald was adamant. No extra capacity without extra berths, full stop. – Alan Peat
You can have as much container space as you want, but the berth capacity is a restraint.– Mark Gregg-Macdonald“
With the use of the 507.2-hectare Bayhead PX block as a back-staging area you could increase capacity to 7-8m TEUs/pa.– Kevin Martin
“
Private sector comes up with scheme to double Durban box capacity
Productivity gains in Maputo port
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4 Durban June 2015
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Upgrades at the Port of Durban – like the refurbishing of Maydon Wharf – are good news
for improved service delivery and efficiency, but there’s general consensus that South African ports will need to up their game in light of regional developments at the likes of Walvis Bay.
“MACS Maritime Carrier Shipping has always enjoyed an excellent working relationship with TPT and TNPA and has always engaged them directly if any matters require discussion,” says commercial director William Hall, who has welcomed the progress already made.
But he says that while there have been upgrades at the Port of Durban, there has been no meaningful expansion in Richards Bay.
“In the past 20 years there have
been several plans outlining the intentions of Transnet to expand the port but this has not transpired to date. “Of course there have been landside developments such as the paving of half of 6 series apron, four additional sheds at 6 series, and open bulk storage facilities behind the galleries, but to date there’s been no additional berth capacity despite the plans.”
He believes that if Transnet were to committ to expansion at the Port of Richards Bay, shippers would be in a position to grow exports.
In contrast to this approach, Walvis Bay is expanding to create a hub port for West Africa – and the port authority
is investing without having any guarantees in place. “In South Africa there seems to be a need for business plans and long-term guarantees from customers before investments are made,” he said.
Experts across South Africa
have echoed Hall’s sentiments with many saying that if South Africa wants to retain its leadership position in the region it needs to up its game.
Part of the problem, says Hall, relates to the high turnover of personnel. “As a liner operator, consistency is crucial – and staff turnover unfortunately leads to constant inconsistencies.
“The availability and experience of pilots and tug services seems to have deteriorated as well in recent
years,” says Hall. “One example is the Maydon Wharf channel which is normally closed when you have winds in excess of 20 knots. The ripple effect of closing the channel for a day or more is costly to all operators and industry as a whole.
“This is exacerbated by the port policy which gives priority to container ships,” said Hall. “This policy should be extended to all liner services, while hiring and training of staff should top the agenda.”
‘SA ports must up their game’
If Transnet committed to expansion at the Port of Richards Bay, shippers would be in a position to grow exports.– William Hall
“ A MACS vessel at the Port of Richards Bay.
Phot
o: W
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icha
el H
all
June 2015 Durban 5
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6 Durban June 2015
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Smooth landside operations and quick access to containers remain a challenge at
the Port of Durban, with lines often the target of criticism.
According to Junaid Kathrada, customer experience manager for Safmarine, operations at Pier 1 and Pier 2 terminals are especially challenging.
“Customers and transporters have grown frustrated as they struggle to collect or deliver containers within the specified free time,” he said. “At the same time the shipping lines are sometimes criticised for not placing more pressure on the terminal to improve turnaround and this is often unjustified. As the line, these delays also impact us as we would like to maximise loadings and obtain swift turnaround
of our containers for future shipments.”
He said shipping lines also coordinated a fair amount of transport to and from the terminal on behalf of their customers.
“We understand the challenges being encountered by the port and are working with them to alleviate the congestion. Low traffic periods are highlighted and customers are encouraged to collect containers well in advance of expiry of the free time. These may seem like small measures but there is no quick fix to this problem and we prefer to work with the terminal to reduce
the impact of the delays to our customers.”
Commenting on waterside operations at the port, he said thus far it had not been challenging this year.
“But this was anticipated as congestion and wind delays do not generally occur during this period.”
He said container volumes were starting to see slight increases, but shipping lines still had to
keep their fingers on the pulse, remaining close to the market as they were not out of the woods yet.
“The first quarter of the year has seen no major shifts in trends with the Far East
still our main trade route – especially on the inbound leg into South Africa,” said Kathrada. “We noted an increase in volumes prior to the Chinese New Year as customers pushed to have cargo shipped out of the East before most of their suppliers shut down for the holiday period, which has been quite positive.”
Volumes subsequent to this period have been steady, he said.
Exports, said Kathrada, were still largely dependent on the commodity sector and lower demand from the Chinese market had impacted some exporters in South Africa. This, together with relatively low commodity prices, has neutralised the benefit of the weaker rand in terms of increased volumes.
He said nationally container volumes in the first quarter of 2015 had increased, with the market showing good growth.
‘Working with the port to speed up turnaround’
Nationally container volumes in the first quarter of 2015 have increased, with the market showing good growth.– Junaid Kathrada
“
June 2015 Durban 7FTW3186SD
Growing its profile in the Durban market is high on the agenda
for software solutions provider Easyclear.
According to Leon Govender, Durban account representative for the business, this has seen the company appointing a new sales person and account representative for the KwaZulu Natal region.
“Jody Fruin has joined our team in Durban. Our aim is to now focus on growing our business in KwaZulu Natal significantly in the next few months,” he said.
Whilst the clearing industry did not have the best of years – being more “down than up” during 2014 – expectations for 2015 are brighter.
“Several companies unfortunately closed their doors in 2014, but we are very positive about 2015 as volumes are on the increase and we are seeing some growth in the KwaZulu Natal market – all of which is very encouraging.”
According to Govender, warehousing and logistics are still the primary focus in the region since Durban is still the hub for Johannesburg-based importers and exporters.
“Bulk imports and exports are trending currently, with much of this bulk being warehoused and
consolidated before being transported by road or rail,” he said. “Offering clients a viable and efficient solution
to optimise their warehousing and logistics is therefore key for us.”
He said one of the biggest challenges
for Easyclear clients was still unexpected stops by the South African Revenue Service (Sars). “This often leads to storage charges and increases costs. If this happens at the start of a weekend, the cargo has to sit in storage for three days which leads to unnecessary charges and angry clients that agents have to deal with.”– Liesl Venter
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The Durban market accounts for 30-35% of Safmarine’s
Southern African Cluster book of business and grew by about 20% year on year, according to Thabani Dlamini, Safmarine regional sales manager KwaZulu Natal and Swaziland.
Dlamini said the line remained optimistic about the Durban market.
“While we see traditional bulk export commodities steadily rising, it is encouraging to see that of late some key players in the market are slowly looking at moving some of their traffic by road to Durban for export in containers.”
He said one of the big challenges for shipping was still the imbalance in equipment, with imports mostly in 40-foot containers as opposed to exports
which generally use 20 footers. But there is always opportunity for 20 to 40-foot conversions.
“This assists us in leveraging empty 40-foot container evacuation costs to the Far East. We are also seeing opportunities
for breakbulk conversions to containerisation – as has been the case in recent years with second-hand car imports from Japan, as well as citrus fruit exports.”
There have also been some
changes to Safmarine’s Durban operations in the past few months.
“General processing and standardised tasks are now being performed offshore in Mumbai. We have however maintained the local customer experience team in Durban.”
Durban market grows 20%
General processing and standardised tasks are now being performed offshore in Mumbai.– Thabani Dlamini“
Software provider pushes for Durban growth
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8 Durban June 2015FTW5613
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Liesl Venter
Neutral groupage operator CFR Freight has recorded year-on-year growth thanks to several key
investments in infrastructure and equipment, says managing director Martin Keck.
At the same time congestion into and out of the Port of Durban has improved, allowing for a swift and efficient service, he said.
“We have relocated our airfreight office from the Dube Tradeport to the Zacpak facility based in Mobeni,” said Chilton Corrigall, Durban airfreight branch manager. “Having all our offices under one roof has huge benefits in that we are now able to maximise the infrastructure that’s in place.”
He said whilst the office was now a distance from King Shaka
International Airport, they had still been able to improve service levels and turnaround time in exports due to the line haulage between Zacpak Durban and Zacpak Johannesburg.
“All of this allows for better management of shipments as they are being controlled entirely by our own offices,” he said.
In addition to the move the launch of a new export tariff has also assisted the branch in gaining ground in the market, said Corrigall. “We are seeing a definite increase in volumes. We hope to be able to sustain and grow this in the future.”
CFR Durban seafreight branch manager, Liza Allan, said there had also been an increase in seafreight volumes.
This was particularly evident on the UK and Turkey routes. “Together with our
WorldWideAlliance partner Shipco we have launched a new and improved service from Pakistan to Durban that is expected to see good results. We have also extended our internal sales department, continuously focusing on increased contact with our clients.”
At the same time the organisation has invested in additional equipment for standard and heavy container handling - specifically for Zacpak Durban.
“Additional vehicles for local collections and deliveries have also been purchased. An application for an OS bond store has been submitted and we’re currently awaiting the outcome,” said Keck.
The company recently developed its own direct service from Durban to Zambia in a bid to grow its cross-border operations.
‘Growth in imports and exports on all routes’ An application for an
OS bond store has been submitted and we’re currently awaiting the outcome.– Martin Keck
“
June 2015 Durban 9
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Liesl Venter
Adding a further burden to escalating port costs, Transnet Port Terminals has announced the
introduction of a “sorting fee” that will now be introduced at the Point terminal should the port be required to sort cargo for loading onto vehicles.
Carl Webb, managing director of specialist project logistics company PLM and a Saaff Harbour Carriers representative for Point and Maydon Wharf breakbulk terminals, says the introduction of
fees without industry consultation has significant impact.
“Vehicles can sometimes wait up to 24 hours to collect or deliver containers at the Durban Container Terminal,” he says.
According to Webb, the fact that the cargo is not staged in any order when discharged from the vessels is seemingly not being taken into account.
“Why is industry expected to
now pay for this? Surely TPT is responsible for staging cargo according to marks and numbers at the outset?”
He says parties are notified of
the charges, and if not disputed within 24 hours, they just debit the agents’ accounts accordingly.
“The period of 24 hours hardly gives an agent time to locate his file on the shipment, let alone contact the transporter and obtain any information on the additional charges,” he says.
Webb maintains that TPT remains one of the biggest stumbling blocks to doing business in Durban. “They drive up cost through the constant changing of procedures, new fees and payments – and delays to name but a few.”
With well-established businesses already having to close their doors it is essential that business has a stable environment in which to operate where they are not held accountable for incompetence beyond their control, said Webb.
New sorting fee bumps up port charges
Surely TPT is responsible for staging cargo according to marks and numbers at the outset?– Carl Webb“
In the competitive Durban market more and more companies have
become sales-driven, says Candyce Zore, a recruitment consultant with Bertlie Recruitment.
“We are also seeing a lot of attention being given to customer support.”
And according to Zore, requirements have become more multimodal. “I find that our clients are seeking candidates who are well versed in all modes and fulfil a broad role comprising airfreight, seafreight, roadfreight imports and export controlling, whereas previously there was more specialisation.”
She says there are currently several opportunities in Durban.
“We have job opportunities for customer services, numerous sales executive vacancies for both junior and senior level candidates, air and sea import and export controllers and warehouse managers amongst others.”
Big focus on sales and support
June 2015 Durban 11
Liesl Venter
Despite the slide in the rand against the US dollar, 2015
kicked off with a boom in import volumes that is expected to remain
constant for the foreseeable future.According to Clive Nel, ZacPak
branch manager in Durban, exports are also starting to show a slight increase as new business picks up.
“The freight industry has seen a dramatic shift in terms of imports and exports in the past few years,” said Nel. The current market has become quite sensitive to pricing and prefers solutions that are more cost-effective, shopping around for the various options available.”
There has also been a definite reduction in inventory during the recession, he said. “These
reductions have been achieved in the past by simply buying less, but now companies are managing inventory correctly. With this emerging trend, a cross-docking facility has become an absolute necessity for the ZacPak Durban depot. It is definitely a sector in which we want to become a market leader, in terms of both imports and exports.”
According to Nel, there’s been a drastic increase in requests for FCL cross docking from clients. “We
specialise in the area and are seeing growing demand.”
Nel said with the ZacPak brand now firmly established it was time for the Durban depot to specialise in the needs and expectations of each consignee as an individual.
“Our strategy is to grow our business significantly in the future in both our freight stations and new business sector,” said Nel. “We believe this is possible in a challenging market by finding ways to add value at the right price.”
FTW3180SD
‘Major increase in FCL cross-docking requests’
There has been a definite reduction in inventory during the recession.– Clive Nel“
The ZacPak Durban depot.
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Liesl Venter
There are big plans in the pipeline for Sasfin Premier Logistics in Durban, including the acquisition of a
world-class warehouse facility.According to Vischal Dhudibal,
KZN regional manager, this will extend the company’s service offering in the port city significantly, not only opening up warehousing opportunities, but also providing cross haul, cross dock and a pick and pack facility.
“Clients are increasingly looking for a one-stop shop in respect of clearing and forwarding, stevedoring, quayside operations and transport,” said Dhudibal. “Our goal is to provide our customers with a total logistics solution that incorporates all that and more.”
There is no denying the importance of the Port of Durban, Dhudibal told
FTW, and with more growth on the cards in light of the planned dig out port at the old airport precinct it is essential that companies work
towards creating capacity to ensure they are able to service clients efficiently.
“We are already seeing an increase in project shipments coming through the Durban port destined for southern and central Africa,” he
said. “And the dig out port is certainly going to create much-needed growth for the KZN economy, resulting in job creation, skills development and hopefully a reliable rail network.”
All of this means opportunity for
logistics service providers.But, said Dhudibal, Durban
was not without its fair share of challenges. “Port delays remain a concern. At times shipments can be stopped up to three times – be it customs, NRCS or the border police - resulting in significant delays with huge recoupable cost to the client.”
That is without port congestion, which has become increasingly problematic.
But, said Dhudibal, it was not just issues around the port that were impacting negatively. Durban was also bearing the brunt of load shedding – much like other cities
in the country. “It is creating havoc and causing major delays. The release of documents by shipping lines is one example. Because of load
shedding the documents are released later than would
normally be the case and this causes a
ripple effect in getting shipments released timeously.”
Commenting on volumes, he
said the current exchange rates
seemed to be hurting the import
markets, but they were seeing a gradual increase in
exports, especially in terms of perishables and agricultural cargo.
“However this is seasonal and cannot be sustained over a long period of time.”
Increase in project shipments through Durban
Because of load shedding the shipping documents are released later than would normally be the case and this causes a ripple effect.– Vischal Dhudibal
“
June 2015 Durban 13
MBABANE – Without Durban and Richards Bay ports to deliver and pick up cargo,
Swaziland Railway would have closed in the 1980s when its original destination, Maputo, was inaccessible due to civil war. This is particularly true because Swaziland Railway depends on transit traffic, which in 2015 accounts for 75% of its revenue and which is almost entirely destined for Durban and Richards Bay. Now a new agreement between the company, Caminhos de Ferro de Mocambique, the Maputo Port Development Company and
Transnet SOC Ltd will bring more rail business through Swaziland by moving coal destined for Brazil and India from a jointly controlled facility in Maputo to Richards Bay Coal Terminal via Swaziland.
Even without the coal initiative, Stephenson Ngubane, CEO of
Swaziland Railway, told FTW, “We are seeing a
much higher demand for imports and exports by rail into Swaziland.”
One reason for importers to opt for
rail from Durban to Swaziland Railway’s
Inland Container Depot at
Matsapha is a reduction by one-third of the transit time, which has been achieved by doubling the length of train loads. From 72 hours, the rail trip from Durban to Swaziland now takes 48 hours.
“We maintain bigger trains, 40 wagons and above. These move faster than a train of 20 wagons because they get preferential treatment at the border. Smaller trains are bumped and they wait on the side while the big trains go through. It’s the way the rail business works,” Ngubane said.
“We are doing everything for everyone, one a week. Everything is on these big trains: 80 containers on 40 wagons,” Ngubane said.
Swaziland moves about four million metric tonnes of cargo annually, mostly on its southern link that crosses the border at Golela in KwaZulu/Natal, where freight then proceeds along the Transnet network to Richards Bay and then Durban. With the cessation late last year of iron ore shipments railed to Mozambique, outgoing Swazi rail freight is destined for Durban and Richards Bay, and its incoming cargo that is delivered to inland countries via Swaziland also originates at those ports. SA rail cargo travels from Komatipoort eastward through Swaziland, where it is directed to Durban.
The Brazilian and Indian coal shipments initiative from Maputo to Richards Bay is expected to significantly boost Swaziland Railway’s business with the SA ports. – James HAll
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Coal destined for Brazil and India will be moved from a jointly controlled facility in Maputo to Richards Bay Coal Terminal via Swaziland.– Stephenson Ngubane
“
New deal adds volume for Swazi Rail
www.ftwonline.co.za
14 Durban June 2015FTW3181SD
T he Port of Durban may be a fixed port of call on the SafmarineMPV South Africa-West
Africa (SAFWAF) schedule, but it is one of the multipurpose line’s most flexible, according to line management. And it’s a feature they believe has become increasingly important to Kwazulu Natal and Gauteng-based equipment manufacturers using Durban to serve the West African market.
According to James Lewer and Pamela Yerushalmy, many of these industries supply large engineering and infrastructural cargo to the oil and gas majors operating in West Africa and require a multipurpose service that has the flexibility to accommodate the changes and fluctuations in the market.
“What is particularly important to them is not only flexibility in terms of schedule rotation, but also in operations such as transhipment,” they said. “For example, in addition to providing services for local South African vehicle producers, SafmarineMPV has, for some time, been providing a large car carrier – which ships
vehicles from India to Durban – with a transhipment service from Durban to the DRC. By doing so, we have made it possible for the carrier to extend its product offering into this key West African market.”
Looking ahead, they believe there is great potential for other carriers, particularly those whose vessels are too large to call West African ports directly. “By using the Port of Durban and the SAFWAF service they can tranship a large variety of cargoes, whether they be containerised, general cargo or cargo for oil and gas, energy, infrastructural, mining and other projects in East or West Africa.”
According to Lewer and Yerushalmy, SafmarineMPV is not only able to tranship cargo already discharged at the Port of Durban but, if required, can ‘hot tranship’
cargo through direct vessel-to-vessel transfers.
Yet another example of the line’s flexibility relates to the shipment of hazardous cargo (IMO 1 and 5), which cannot transit South African ports once loaded onboard a vessel.
“To accommodate this
requirement, SafmarineMPV offers Durban as the last port of call for this type of cargo.
“We also have the flexibility of moving the SafmarineMPV vessel between the Maydon Wharf and container terminals to load the various cargo types required.”
Fluctuating markets call for increased flexibility
From left the Durban-based Socopao team agents for SafmarineMPV: Adrian Govender (operations), Mohammed Cassim, Aleshia Samuels and Vernon Pillay (shipping manager). Rehana Ally is not pictured.
June 2015 Durban 15FTW3187SD
The demand for skilled personnel is showing no signs of abating, with
a major focus on experience and a high level of industry knowledge, says Jill Morris, a director at recruitment specialists Lee Botti and Associates.
Be it sales or operations, she says, the focus is on experience and a proven track record of skill.
“Most of the employment opportunities are at present in and around the Durban market more than Richards Bay where we have not seen as much activity,” she says. “The vacancies within the Durban area reflect a definite increase in sales roles.”
According to Morris, there has been a noticeable relocation of shipping-related companies away from the Durban CBD area in recent times, with many opting for more upmarket office environments like Umhlanga’s new development areas. “Some are even moving out as far as the airport area.”
She says although the company
saw a 34% growth in job orders in the first quarter, it quietened over April due to public holidays, which is a normal trend. “There have also been many candidates approaching us to assist them in trying to negotiate better financial packages owing to the impact of higher living costs.”
According to Morris, the company has in recent months seen an increase in mergers, amalgamations and company buy-outs, owing to business strategies focused on providing a wider scope of service to clients.
“This has been on a national level,” she says. “With this, there have also been a number of retrenchments as companies are being forced to centralise or downsize their businesses for survival.”
Increase in mergers sees more retrenchments
Be it sales or operations, the focus is on experience and a proven track record of skill.– Jill Morris“
T he recent cancellation of a steel shipment from South
Africa brought the practical impact of South Africa’s strike action into sharp relief for MACS Maritime Shipping.
According to commercial director William Hall, one of its customers was buying steel products from South Africa.
“The quality and price ex SA were excellent, and cargo comprised around 500mts of steel for a UK government building contract. Unfortunately, thanks to strikes in the steel industry at the time, it took six months to deliver the order and now the customer buys inferior quality from China at a better price and the entire order is delivered and on the ground in the UK within 30 days.”
Sadly not an isolated occurrence.
Steel buyer switches to China
www.ftwonline.co.za
16 Durban June 2015
FTW7229
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Berth deepening plans at Durban Container Terminal Pier 2 remain on the pending
list following appeals from two stakeholders against the environmental authorisation granted by the Department of Environmental Affairs (DEA) on January 21 this year.
According to a spokesman for Transnet National Ports Authority, the plans involve deepening Berths 203, 204 and 205, as well as the basin and approach channel, from 12.8-15.4 metres.
“There is a strong business case for these plans. Presently large vessels requiring a deeper draught than 12.2 m can only enter the channel at high tide, resulting in delays. Deepening the draught will enable vessels to enter at any time, reducing the queue of vessels waiting to enter the port,” said the spokesman.
The project will also see the three berths lengthened from 914 metres to 1210 metres, enabling them to accommodate three 9200-TEU (twenty
foot equivalent unit) vessels with a 14.5 metre draught simultaneously. Currently a 9200-TEU vessel takes up two berths.
“Larger vessels carry more containers, which means the price of shipping cargo to and from South Africa should come down, as operators are able to reduce the number of vessels they charter. These savings can be passed on to cargo owners and importers, reducing the cost of doing business with this country.”
The South Durban Community Environmental Alliance (SDCEA) and Earthlife Africa Durban earlier this year appealed the process. Whilst no timelines are available, a ruling is only expected in June at the soonest taking the average time of an appeals process into consideration. Respondents had until March 12 to appeal after which TNPA had 30 days to respond. The DEA, it is anticipated, will take at least another two months to make a ruling.
Berth deepening plans await ‘green’ light
The Port of Durban.
June 2015 Durban 17
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Demand for labour in the logistics and warehouse sector
in Durban and Richards Bay has been slow over the past quarter due to seasonal requirements but this hasn’t prevented employers from investing in staff training to grow essential skills.
Tyron Hubbart, general manager of cargo and personnel management firm Clydesdale, which has its own major expansion plans in the pipeline despite the current economic downturn, picked up on the trend that is working on closing the skills gap.
“Some of our big customers have had a great drive in the skilling of general workers, training them up into machine operators to work in bagging plants or skilling them as forklift drivers for warehouses,” he said.
Hubbart said other businesses had also skilled former general workers to operate 45-ton high reach stackers.
“The labour demand over the past quarter has been very slow. We saw an increase and high demand just after the
Christmas holidays, which later died down to a trickle. This time of the year usually has low demand,” Hubbart said, adding that warehouses dealing with commodities such as copper and chrome had been impacted.
However, the company has opened new branches in both Richards Bay and Kimberly and has expanded with the launch of a sister company, Outsourced Project Solutions, which specialises in resource managing outsourced, non-core functions and labour-intensive activities for short-term projects.
“In these difficult economic times in the industry we have had growth due to our business model,” Hubbart said.
“The challenges that face our logistics industry at the moment are the same as all South African businesses – a lack of productivity and large staffing pools
with poor efficiency, which is what our model aims to address,” Hubbart said.
The demand for labour in the sector depended on market trends and the country’s economic growth rate, he added.
“At current levels there is low demand but if there is growth the demand will definitely increase,” Hubbart said. – Lyse Comins
Major drive to upskill general workers
The commissioning of the Port of Durban’s new sand
hopper and sand bypass system at A-berth started in May this year with performance testing scheduled from June.
According to a spokesman for Transnet National Ports Authority (TNPA), during the port’s entrance channel widening project the municipal sand hopper, otherwise known as the sand pumping station, was demolished and a new one was built to the north of the entrance channel.
“Subsequently, as part of the channel widening agreement, Transnet is constructing and funding the new sand hopper at A Berth. It is important for reinstating the beaches as sand naturally migrates along the coast.
8400 cubic metres of sand, or two full dredger loads, is the capacity of the sand hopper. The eThekwini Municipality requires TNPA to provide 500 000 cubic metres of sand to the city’s beaches in a financial year.– Liesl Venter
New sand hopper gets ready for action
www.ftwonline.co.za
18 Durban June 2015FTW3044SDFTW1875SD
Liesl Venter
T he newly developed C & D West stockpile and storage facility at the Port of Richards Bay is set to
become fully operational by no later than June this year.
The new facility, constructed at a total cost of R315 million, is expected to significantly increase efficiency at the port thanks to the added capacity it will generate.
According to a spokesman for Transnet Port Terminals (TPT), the stockpile and storage facility project was approved in December 2011.
“Alleviating the considerable pressures on the port caused by the increase in the volume of cargo at the Richards Bay terminals was necessary. The terminal was fast running out of space to accommodate and stockpile commodities such as manganese and coal.”
Having identified a vacant piece of land called “D West “ and “C West” at the Richards Bay Dry Bulk Terminals for the development, the project started in September 2013.
“The new facility provides the necessary additional capacity
required to accommodate both weather-sensitive and non-weather-sensitive cargo,” said the spokesman. “Cargo such as chrome ore, coal and manganese ore will be stored here and were central to how this new facility was developed.”
RB adds storage capacity
Terminal manager for the Richards Bay Dry Bulk terminal, Mandla Mpungose, addresses the core project team at the new C & D West stockpile and storage facility.
F inal clean-up measures in the Port of Durban are nearing
completion following a vegetable oil spill from the burned-out Africa Sun Oil Refineries factory in Mobeni in March this year.
According to a spokesman for Transnet National Ports Authority (TNPA), the situation was brought under control very quickly and no effort was spared to contain the spill.
“The Department of Environment Affairs (DEA) and TNPA have been continuously monitoring the affected sites. Efforts to contain the oil have yielded positive results as there is no free oil to be recovered from the Silt Canal anymore,” said the spokesman.
It has been confirmed that an estimated 663 430 litres of oil was recovered during the containment and clean-up operation. – Liesl Venter
End in sight for Durban oil spill clean-up
June 2015 Durban 19
Despite a number of external challenges, Zim
Integrated Shipping Services South Africa (Zim SA) has seen a “substantial increase” in business and has had to deploy larger vessels to meet the greater demand.
“We also plan on increasing our special equipment stock to cater for the increase in demand to West Africa for this type of equipment,” said Slava Liskovich, managing director of Zim SA.
He commented that Durban remained strategically a very important hub for the company and the region as it was Africa’s busiest commercial port and
the largest container hub in southern Africa. “However, port volumes have only increased marginally over the past several years,” said Liskovich.
According to him, the lack of maintenance and insufficient
infrastructure to support traffic in and out of the port – compounded by inefficient support from the marine side – have led to Durban becoming one of the most expensive ports
in the world in which to operate. Liskovich commented that
this meant that Durban was losing its competitive edge in the region. “Yet another blow which the South African economy has to absorb,” he said.
FTW7301 FTW3088SD
Current market volatility aside, MBS Carriers is optimistic
about the future of its Durban operations launched just over a year ago.
Having recently expanded and strengthened its foothold in Durban with the acquisition of a depot, plans are also in the pipeline for warehousing.
According to the company’s Durban general manager, Rudi von Platen, investment will continue in an effort to improve the service offering of the company.
“Our strategy in Durban is to grow volumes – and to do that efficiently it is essential that we have the capacity to service our supply chain well. Growing and creating our own export volumes is part of our plan.”
He said while there was no denying that volumes were currently down, expectations were high for an upturn.
“Various factors have led to the drop in volumes including the commodity pricing and the
exchange rate.”But, he said,
commodity prices would improve and volumes were set to increase again. Being ready to service the market was therefore crucial.
“We are already seeing increases in
southbound volumes that are coming through the Port of Durban for further export and we believe there will be opportunity to target the volume-driven business as soon as the market picks up again.”– Liesl Venter
Plans in the pipeline for new warehousing facility
We are already seeing increases in southbound volumes that are coming through the Port of Durban for further export.– Rudi von Platen
“ Durban has become one of the most expensive ports in the world in which to operate.– Slava Liskovich“
‘Substantial growth’ for shipping line
www.ftwonline.co.za
FTW3141SD
20 Durban June 2015
THE FTW ADVERTISERS’ INDEX
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New South Africa Shipping ..............12Project Logistics Management.........14Port of Maputo ................................ IBCSACD .....................................................5Safmarine .............................................9Safmarine MPV ..................................16Sasfin Premier Logistics ....................20Semwat Transport ...............................1South Africa Inland Logistics ...........13Swaziland Railway .............................12
Truckhire...............................................6United Container Depots .................12United Maritime Logistics ................19Unitrans Freight Forwarding and Clearing ......................................IFCUPS .................................................. OBCWallenius Wilhelmsen Logistics .........6ZacPak ...................................................4Ziegler South Africa ............................4Zim Integrated .....................................9
Lyse Comins
KwaZulu-Natal’s manufacturing-dependent economy is expected to continue on
a sluggish growth path, partly due to slow global demand, as it faces internal pressures of drought, rising fuel prices and Eskom’s energy crisis.
This was the gloomy forecast from KZN Treasury economist Dr Clive Coetzee who told FTW that the provincial economy was expected to grow between 1.4 and 1.5% in 2015/16, slightly below the national economy’s anticipated 1.5-2% GDP for the period.
Coetzee said macro-economic conditions, including slow global demand for local goods and services, rising fuel prices, Eskom’s energy crisis, which was expected to worsen during the period, and concerns around labour costs and risks were hampering growth and business expansion.
“KZN is predominantly a manufacturing economy and
unfortunately all these negative factors on a macro level are impacting manufacturing so we are going to be hard hit,” Coetzee said.
According to the latest KZN Business Barometer compiled by economist Mike Schussler of
economists.co.za, manufacturing declined 0.7% year-on-year in February, although electrical machinery, clothing, textiles and footwear experienced growth, possibly due to a demand for energy-efficient electrical
equipment and school clothes at the start of the year. A 44% surge in vehicle production was likely due to factories getting back to full production after the holiday period.
However, the transport and communication index grew 18.2% year-on year, on the back of port
cargo volume growth of 7.7%, while airport arrivals were up 0.6% and land transport grew 7.4% following the fuel price drop.
Coetzee said the positive impact of a lower oil price had been erased by the 30.5 cents a litre increase in the fuel levy, and oil prices had already climbed to US$66 a barrel with an outlook of US$80.
Coetzee said Eskom’s energy crisis could be solved if the private sector stepped in and alternative funding was considered for bulk infrastructure.
He added that the province had massive potential to generate alternative energy as a large percentage of the land was under sugar cane. He said it would be possible to power Durban for 24 hours a day for a year using the full
potential of the province’s sugar cane production.
Coetzee cautioned that the industry was under pressure from mass production in India and Brazil and alternatives such as energy generation could lift it from a slump.
He said the growth potential of Richards Bay and Durban ports should be harnessed with continued infrastructure investment to entrench future competitiveness against developing
Mozambican and Nigerian ports.“We have two massive ports in
Durban and Richards Bay and we have to make them the anchors of growth in KZN. A possible solution is to decentralise the ports to the city and for cities to take ownership of the ports and to create public-private partnerships to fund investment in the ports,” he said.
Energy crisis slows down already sluggish economy
It would be possible to power Durban for 24 hours a day for a year using the full potential of the province’s sugar cane production.– Dr Dirk Coetzee
“
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