Southern Africa’s Ports Are Left Behind as Global Shipping Routes Evolve

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JIMMY MOYAHA: A few weeks back, we explored the potential opportunities for South Africa, particularly as a southern African port due to the closure of the Strait of Hormuz.

We discussed the implications for ships needing to reroute around the Cape of Good Hope on their journey to Europe and the US via Africa. This situation appeared to present benefits for African ports and economies.

However, it seems that some countries are not capitalizing on this as much as we expected. Today, we’ll examine this further with Dr. Jacob van Rensburg, the head of research and development at the Southern African Association of Freight Forwarders.

Welcome back to the program, Dr. van Rensburg. Thank you for taking the time to be with us.

With some countries experiencing nearly a 90% surge in traffic through their ports, one would expect this to lead to a significant boost in economic and port activity. Yet, that doesn’t appear to be happening. What’s going wrong?

JACOB VAN RENZBURG: Good evening, Jimmy. It’s great to be back on your show.

This phenomenon illustrates a disparity between ‘increased vessel traffic’ and real ‘economic activity or port calls’. Currently, we are witnessing this discrepancy.

It’s essential to remember that international trade, particularly shipping, operates on schedules. Typically, a port is part of a network of 10 to 15 ports within an extended schedule, usually lasting between 50 to 70 days.

Thus, while we may observe a notable increase—as you mentioned, a 90% spike in certain areas—this does not correspond to a proportional rise in vessel calls.

In our context, South Africa’s port throughput for containerized trade rose by nearly 4% last year, and bulk throughput also increased by roughly 4%, yet the increase in vessel calls only amounted to 2%.

This indicates that while our ports have seen some uptick in activity, there’s no direct correlation with increased traffic translating into economic growth.

JIMMY MOYAHA: Now, Dr. van Rensburg, let’s discuss the commercial perspective. For many vessels, the mentioned ports serve merely as transit points on their journey to final destinations. They don’t necessarily represent new or ultimate destination points. However, this doesn’t imply there aren’t commercial opportunities for these ports.

How do ports usually position themselves to capitalize on transitory vessels rather than those delivering goods to final destinations?

JACOB VAN RENZBURG: It’s crucial to first understand the port model.

In South Africa, as is the case worldwide, we have major ports that feed the country’s economic activity. Think of large ports like Shanghai in China or Rotterdam in Northern Europe.

Additionally, we have transshipment hubs where cargo is redirected—similar to key players in aviation like Dubai and Doha.

Looking at South Africa’s figures, about a decade ago, 15% of our cargo was transshipment-related, with numbers fluctuating between 15% to 25%. Currently, that’s down to 13%.

Evidently, while we have more vessel traffic, we aren’t seeing them making port calls; this relates to whether the ports are serving local economies or ongoing shipments.

When port activity is thriving, you’ll notice an increase in transshipment. Conversely, if it’s sluggish, transshipment declines as well.

Additionally, ancillary activities like bunkering (refueling), crew changes, and dry docks—where repairs or machinery work is done—can supplement economic activity.

If you can’t enhance volume, you should still aim to participate in the related economic activities.

South Africa holds a critical geographical position globally, especially given recent crises.

The challenges we’ve encountered—including events in the Red Sea, the Ever Given incident in the Suez Canal, and now the closure of the Strait of Hormuz—present an opportunity to bolster participation in these activities.

JIMMY MOYAHA: Dr. van Rensburg, before we conclude, let’s address how we frame this opportunity. Many argue that routing via the Cape of Good Hope, through South Africa, extends delivery times, raises costs, and introduces delays compared to the Strait of Hormuz or the Suez Canal for shipments to Europe.

Nevertheless, this shouldn’t detract from the ongoing discussions about the potential of this route. As you properly pointed out, disruptions are becoming more frequent.

How can we effectively present this opportunity to the international community to make this a sustainably viable rerouting option?

JACOB VAN RENZBURG: For South Africa, a primary focus should be refining our port models—understanding our strengths and leverage.

Over the past two decades, significant property investment in our port system has predominantly occurred at Coega in the Eastern Cape, specifically designed to function as a transshipment hub for cargo around the Cape of Good Hope.

We appear to be attempting to cater to everyone, which isn’t where the prospects lie.

Moreover, most trade flows east-west, with limited commerce routed past us.

In terms of containerized trade, only 2% of global oil interactions are with South African port calls, while in the bulk sector, it stands around 5%.

Despite these low figures, the surge in traffic suggests untapped opportunities.

We must invest in our ports, enhance our equipment, and foster collaboration and data sharing. Progress has been made.

It’s vital to recognize that we’ve hit a turning point, but substantial work remains—this requires collective effort from all stakeholders.

The recent collaboration between Transnet and International Container Terminal Services, Inc. (ICTSI) at the Durban Gateway Terminal, formerly Pier 2, is yielding positive outcomes.

According to my estimates, there’s seen a year-on-year increase of 6.7% in Q1.

While there are promising signs, we must consistently invest in equipment, continue improving our processes, leverage digital solutions, and integrate the entire logistics system.

Additionally, strengthening connections with the hinterland is crucial—this includes enhancing rail, roads, and overall system coordination.

There are definitely positives, but many opportunities lie ahead that we must seize.

JIMMY MOYAHA: Indeed, there remain plenty of untapped opportunities that we can exploit effectively. We need to ensure we’re making the best possible moves moving forward.

We’ll wrap up the conversation there. Dr. Jacob van Rensburg of the Southern African Association for Freight Forwarders joined us to discuss how we have the potential to maximize the benefits from our port situations.