High port costs drive away business

The impact of Transnet’s high port charges is hitting where it hurts most – in dwindling volumes, particularly of transhipment cargo. According to a spokesman for Transnet National Ports Authority (TNPA) in Cape Town, transhipment volumes at the port are significantly down. “It is not that the volumes are going elsewhere – we are not losing business to other ports in the country – rather the lines are just not carrying these volumes to South Africa anymore,” he said. Whilst TNPA is not too concerned as yet, saying the transhipment business “is very volatile by nature” and could easily be directed back to the country, industry experts are not so sure. “South Africa’s transhipment business has always been at risk in light of our port costs,” said an FTW source. “We have expensive ports and it is starting to impact. It is just not cost-effective to use our ports as transhipment hubs.” This is a message Transnet officials heard for themselves on an international trip to meet shipping lines recently. “A report on the trip is still being compiled but it would seem that the message is quite clear from the shipping lines. They are cutting down quite a lot on the South African trade,” said a source. “It is estimated that we will have to cut our budgets by up to 15% to accommodate these cut-backs. At the same time we are going to have to relook at our ports in the country and determine exactly what role each one must play and what it can do to increase revenue.” A spokesman for the Port of Cape Town confirmed that transhipment volumes had been decreasing for some time but said it was not yet possible to say what the findings of the international business mission would mean for Cape Town. “Strategy meetings are taking place to find ways of attracting business to Cape Town and where we want to position the port,” he said. “One area that has been identified as a possible area of growth is the bunkering business.” This is despite declining tonnages of bunkers currently being sold in Africa. “It remains an attractive market and so we are investigating it. We would have to work with several industy role-players to make it happen.”