Lessons for SA from largest US port

Why are South Africa’s wharfage charges four times higher than those at the Port of Los Angeles? On a recent visit to North America’s largest gateway, Dave Watts, maritime director of the SA Association of Freight Forwarders (Saaff), spent some time at the port where he found wharfage charges raised against terminal operators in the region of US$48 per TEU, compared to the equivalent of about US$200 here. “My visit there,” he told FTW, “raised some interesting ideas which might be relevant to our main home port of Durban.” One is the complete separation of port ownership and operation. Owned by the City of Los Angeles the port is situated in San Pedro Bay in the south of LA. The LA Port Authority is a division of the City, and is a non-profit, tax-exempt entity. “It acts as landlord and is responsible for infrastructure, security and pilotage,” Watts said. “All income, largely consisting of rental and wharfage remains with the authority. It is utilised exclusively for the benefit of the port – covering operational expenses, maintenance and infrastructure development – unlike here, where the income largely serves to support Transnet’s overall bottom line. “Virtually all other port activities are in the hands of private enterprise.” Watts told FTW that his personal conclusion was that it was common that in many port cities worldwide ownership of the port rests with the city. “Though such a change in the port structure in SA would be impractical and politically unacceptable, there needs to be far greater involvement of the city and its management and people in port decision making.” INSERTS $200 SA wharfage charges $48 La wharfage charges