Restricting foreign-owned vessels from moving cargo along South Africa’s coastline and forcing long-haul containers to be offloaded at hub ports for localised redistribution is a real concern, Exporters Western Cape (EWC) has said.
Responding to the issue resurfacing at the National Transport Conference on Tuesday (see lead post), EWC chairman Terry Gale said the idea of placing a restriction on cabotage (exclusive short-sea shipping rights), was not opposed in and of itself.
“While the intention to stimulate job creation and grow South Africa’s maritime sector is understood and supported in principle, from an exporter perspective the practical implications remain a concern.”
With the country only beginning to recover from the extreme port congestion of recent times, such a development could add to nagging delays, he said.
“A hub-and-spoke model, regardless of which port is designated as the central hub in the country, would introduce additional handling into the supply chain. Containers would need to be discharged, stored, sorted and reloaded before reaching their final destination. This inevitably adds cost through increased handling, storage and administrative requirements.”
Gale added that there was a broader concern around system pressure.
“South Africa’s ports are already operating under strain and concentrating volumes through a single hub port risks exacerbating congestion and inefficiencies, rather than alleviating them.”
Double handling would also be anti-competitive, as exporters relied heavily on direct access to global shipping services, said Gale.
“Any model that introduces additional transit steps and delays, especially for time-sensitive cargo such as perishables, would have a direct impact on market competitiveness.”
He stressed though that it was important to have a balanced view about the proposed cabotage restriction contained in the current Merchant Shipping Bill (2023).
“While the objective of supporting local industry and job creation is important, it is equally critical to consider the broader economic impact. Increased logistics costs can erode export competitiveness, which in turn places pressure on the very industries that sustain employment.”
The same argument is used as one of the principal reasons why the Bill was referred back to the National Economic and Development Labour Council, to thoroughly scrutinise the potential impact of the Bill on the wider freight industry.
“EWC remains of the view that the focus should rather be on improving performance across all ports, strengthening logistics corridors and enhancing efficiency through investment in infrastructure and systems. These interventions would support both trade growth and job creation in a more sustainable and balanced manner,” Gale said.
