Southern Africa’s Ports Left Behind as Global Shipping Routes Evolve
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JIMMY MOYAHA: A few weeks ago, we explored the emerging opportunities for South Africa, especially as a southern African port, following the closure of the Strait of Hormuz.
We discussed what this might mean for ships rerouting via the Cape of Good Hope en route to Europe and the US through Africa. We believed this would be advantageous for African ports and their economies.
However, it appears that some countries have not capitalized on this as much as we previously expected. We’re going to delve deeper into this issue with Dr. Jacob van Rensburg, the head of research and development at the Southern African Association of Freight Forwarders.
Dr. van Rensburg, it’s great to have you back on the show. Thanks for joining us.
One might assume that with certain countries experiencing nearly a 90% surge in port traffic, this would directly convert to heightened economic and port activity. Yet that doesn’t seem to be the case. What’s happening?
JACOB VAN RENZBURG: Good evening, Jimmy. It’s a pleasure to be here again.
This is quite interesting as there’s a stark difference between ‘increased vessel traffic’ and an actual ‘increase in economic activity or port calls’. Currently, that’s what we are observing.
Remember that international trade, particularly shipping, operates on schedules. Generally, a port might be one of 10 to 15 ports in a broader rotation—these can last from 50 to 70 days.
Even with a reported significant rise, as you noted at the beginning, a 90% increase in certain areas does not necessarily equate to a proportional rise in vessel calls.
Looking specifically at South Africa’s context, last year our port throughput for containerized trade increased by nearly 4%. Bulk throughput also rose by almost 4%, but vessel calls increased by only 2%.
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This indicates that although some activity has increased around our ports, traffic growth has not directly linked to enhanced economic activity.
JIMMY MOYAHA: Dr. van Rensburg, let’s discuss the commercial aspect. For many vessels, the ports we’re referring to are merely stopovers on their way to final destinations. This doesn’t rule out potential commercial incentives for these ports.
How do ports typically position themselves to benefit from transitory vessels compared to those delivering cargo to final destinations?
JACOB VAN RENZBURG: It’s essential to first understand the port model.
In South Africa—and similarly globally—there exist primary ports that serve as crucial feeders into economic activities. Consider significant ports like Shanghai in China or Rotterdam in Northern Europe.
Additionally, we have transshipment hubs where cargo is redirected. Good examples in the aviation sector are Dubai and Doha with their many stopovers. The same applies in South Africa.
Ten years ago, we had 15% transshipment activity, but this has decreased to about 13% now, despite increasing vessel volumes. We are not seeing these vessels making significant stops here, affecting our economy.
Ports that handle a lot of activity with high capacity see an increase in transshipment, and vice versa.
Then there are supplementary activities like bunkering (refuelling), crew changes, and dry docks for repairs. If you cannot increase cargo volumes, engaging in these economic activities becomes vital.
Geographically, South Africa holds a significant position globally, especially amidst recent crises.
These crises—like events in the Red Sea, the Ever Given blockage in the Suez Canal, and now the closure of the Strait of Hormuz—present a clear opportunity for enhanced participation at the desired levels.
But if volume cannot be achieved, ports should still latch onto these ancillary economic activities.
JIMMY MOYAHA: Before we conclude, Dr. van Rensburg, let’s consider how to effectively position this opportunity. Some might argue that routing through the Cape of Good Hope increases time and costs, causing delays in deliveries compared to routes like the Strait of Hormuz or the Suez Canal, particularly for Europe.
However, this doesn’t mean we should dismiss the idea in future discussions. As you mentioned, disruptions are becoming more frequent.
How can we frame this opportunity to the international community to establish it as a viable rerouting destination?
JACOB VAN RENZBURG: For South Africa, we need to refine our port models to clarify our role and performance.
In the past two decades, the only substantial investment in our port system has been at Coega in the Eastern Cape, designed as a transshipment hub around the Cape of Good Hope.
It appears we are attempting to cater to all needs, which may not align with current opportunities.
Most trade occurs east-west, with minimal traffic flowing around South Africa.
In terms of containerized shipping, only 2% of the world’s oil goes through South African call ports, and roughly 5% in the bulk space.
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Despite these low figures, the uptick in traffic illustrates potential.
Investment in our ports, equipment, and data sharing are critical steps to leverage this (green shoots of recovery). We’ve seen favorable outcomes from the recent concession involving Transnet and ICTSI at the Durban Gateway Terminal, previously Pier 2, resulting in an estimated year-on-year increase of 6.7% in Q1.
We must continue to invest in equipment, enhance our workforce, employ digital methodologies and best practices, and integrate the entire logistics system effectively.
A crucial aspect is ensuring strong linkages with the hinterland. We require improved rail and road connections alongside coordination across the entire ecosystem.
There are certainly positive signs, but many opportunities await action.
JIMMY MOYAHA: There are definitely opportunities we can still tap into. It’s vital that we approach this strategically.
We’ll conclude our discussion on this note. Thank you, Dr. Jacob van Rensburg from the Southern African Association for Freight Forwarders, for joining us to discuss how we can better leverage our ports.