Regulators will ensure 'common-user' element of private terminals

Alan Peat THE FEARS expressed by some in the freight industry about individual shipping lines operating the SA port container terminals are unfounded, according to Brett Gray, m.d. of SA Transport Investments (SATI). Part of the AP Moller group, SATI - a sister of Safmarine and Maersk Sealand - could very well be one of the major contenders for terminal ownership, when Portnet's 'concessioning' policy gets under way. So FTW queried Gray on the worry expressed about lines also having their hands - directly or indirectly - on the terminals. Would this not see the owning line giving preference to its own vessels? (See page 8) 'There's a multi-layered answer to that,' said Gray. 'First, any private sector terminal would be required to be common user. That will be strongly regulated by the National Ports Authority (NPA), and the still to be selected industry board. 'The latter will be composed of both government and private sector representatives, with shippers, agents and other lines all being eligible for board membership.' The principle of fairness-to-all is also a composite part of the service level agreements that will define the operational services and prices at the terminals. That's the common practice worldwide, according to Gray. 'They are very clear agreements between the user and the operator,' he said, 'and you can't over-ride them without facing penalties.' The second factor is the line's own interest. A container terminal is only a very small - though important - part of the entire logistics chain, according to Gray. And the line's interest - and that of its customers - is the cost-efficiency of this whole door-to-door chain. Said Gray: 'The terminal needs to be seen in terms of that whole logistics chain. Any shipping line would, therefore, have as its primary concern the efficiency of its terminal for its customers.' This, Gray added, would see profitability being only third in line. Another controlling factor would be the terminal's need for as much throughput as possible. 'So would it turn away other lines when they would add volume and improve the cost of the entire chain?' He also cites competition as a driving force behind the container terminal market in SA. 'Although the government has not said which it will go for there will be competition either within the existing ports, or between them. 'So you couldn't just tell a customer to lump it because they can always go elsewhere.' He also sees support for his argument from world experience to date. 'Shipping lines already own lots of terminals,' Gray said, 'and there's no evidence that operators give preference in any direction.' A final control factor would be the probably autonomous nature of the terminal operation. Said Gray: 'Most of the shipping lines have independent units which handle the terminal business. 'So there's effectively an arm's-length between the shipping line and the terminal operator.'