How cost-competitive are SA ports?

How well do South Africa’s ports compare, on a global scale, in terms of cost competitiveness? For participants at the Special Interest Group (SIG) Transport Forum held in Durban recently, answering that question was not as simple as it seemed – and it sparked a heated debate as industry braces itself for another tariff increase application to the Ports Regulator.

According to data from, amongst others, the World Bank – South Africa leads in operational performance compared to its African counterparts. And, from a cost perspective, total port charges are well below the global average, said Transnet Port Terminals (TPT) senior manager, Willie Coetsee.

But  according to senior researcher for transport, freight and logistics at the Council for Scientific and Industrial Research (CSIR), Simone Smith, global best practice and the issue of connectivity need to be considered before the proverbial ‘pat on the back’ is administered.

“Factors influencing port competitiveness range from location, ownership and management, labour relations and the customer base to the hinterland network and information technology connectivity,” she said.

Smith commented that South Africa’s port realities included a monopoly by a state-owned enterprise (Transnet) and a small market place where certain “anti-competitive practices”, such as price collusion by carriers, were enabled.

“An ongoing issue is the long dwell times and the extensive import handling times at port,” said Smith, noting that the average import handling time at South Africa’s main ports – Durban, Port Elizabeth, Ngqura and Cape Town – was six to nine days.

This is further compounded by the high number of documents required for import and export in South Africa. According to the World Bank’s Doing Business in Africa 2015 report, South Africa’s document requirements are almost twice the Organisation for Economic Co-operation and Development average, pipping only Brazil and China for exports and Brazil for imports.

And while technologies such as electronic data interchange (EDI) and online documentation processing were gaining ground in South Africa, much still needed to be done to improve the country’s global maritime connectivity, said Smith.

Added to this was the lack of infrastructure, traffic congestion, unprecedented stops and limited modal options available for the transport of goods from the ports into the hinterland which pushed up logistics costs and reduced South Africa’s overall competitiveness on the global trade stage, commented Smith.