ISSUE 3 2010


SOUTH AFRIcA


Cross-border solution to port congestion


Grindrod Intermodal operates supply chain and logistics services throughout South Africa, as well as across borders. Its network of warehousing and container terminals is the result of the amalgamation of several existing Grindrod businesses. It has long been involved in the transport


by road of vehicles from South Africa’s ports to inland dealerships and distributors. A new development is a new car terminal at Maputo, across the border in Mozambique which is currently handling around 52,000 vehicles a year, many of them from the large car manufacturing plants at Johannesburg and Pretoria in South Africa. Hoegh Line has a stake in the new terminal. The Maputo development had been


prompted by increasing terminal congestion in Durban, although that has now abated with the crisis in the global car industry and problems at Toyota, one of the major customers. However, when prosperity returns to the industry, so will congestion, says Paul Leisegang at Grindrod Terminals, and the investment should prove its worth.


There are plans to vastly increase the capacity of the Maputo terminal to around 250,000 vehicles a year, in two phases, and while this has inevitably been delayed somewhat, the second phase to boost capacity to around 150- 160,000 cars a year could go ahead in 2011, subject to agreement, says Paul Leisegang. A third phase would further increase capacity to around the 250,000 mark. Grindrod recently announced that it would


be providing 40% of an US$800m investment programme in Maputo’s port operations, including dredging and improving container and bulk handling facilities. The programme could multiply the port’s capacity five-fold over the next 15-20 years. Maputo has a long history of serving the


South African market, going back to the 1960s and 1970s and in fact is slightly closer than Durban is to the greater Johannesburg area. Customs clearance formalities are straightforward and the two countries’ railway administrations also co-operate closely. Grindrod’s intention is to put as much of the car traffic on rail as possible as it develops.


Patience is a virtue in southern African shipping


Short-sea operator Ocean Africa Container Lines (OACL) services ports in the region that the bigger containerships cannot access, including Luanda, Beira, Maputo and Walvis Bay through two routes centred on Durban.


The West Coast service offers weekly, named-day sailings between Durban and Luanda calling in all major ports in South Africa, Namibia and Angola. The East Coast service also operates weekly, named-day sailings


between Durban, Maputo, Beira and Nacala. Although it is 51% owned by Safmarine and 49% by Grindrod, it operates as a neutral feeder and handles boxes to and from most of the world’s major shipping operators. OACL uses its own chartered tonnage exclusively, and maintains its own agency network. Chief executive officer Andrew


Thomas says that port congestion is a fact of life in Africa and, along with peak season surges, is the determining factor in the size of the OACL fleet, which is all chartered tonnage. “We lose


on average 20-25% of our total voyage days waiting for a berth. The infrastructure in many of the ports we serve is fairly rudimentary – in fact, many of the ports north of the Limpopo are scarcely developed at all.” OACL uses mainly self-geared


ships of around 1100teu. “We tend not to use the most modern ships because the older ones with higher deadweight capacity cope better with the heavier boxes, which predominate in this trade,” explains Andrew Thomas. “A lot of our commodities are things like foodstuffs and a 20-foot box averages nearer 17 tonnes than


the 14 tonnes found on other trades.” The newer ships tend to be build for high speed and high volumes, neither of which is necessarily a priority in Africa. A dredging programme is at


long last under way at Beira, which would in fact remove one of the last remaining obstacles to an increase in ship size. However, OACL is not in a


hurry to move to anything much bigger for the time being. “If you arrived at some of these ports with a 2,000teu ship, you could swamp the available port facilities,” Edward Thomas explains.


Nevertheless, the Beira dredging will be useful as even ships of the current size often have to wait for high water before they can berth. There is no shortage of port


development plans in Africa – just about every port has plans to turn itself into a regional transhipment hub – but finding the investment to bring them to fruition is another matter, especially in the current financial climate. But at least most countries in the region have been peaceful for several years now so the political climate is much more conducive to investment than it was.


Get the duty right and airfreight is easy, says UCS


Courier and express to South Africa is generally straightforward, says Richard Mansell, general manager at courier firm UCS - apart from the issue of whether shipments are classified as low-value, and therefore duty-free, or higher value and therefore dutiable. The exact definition of high value depends on customs exchange rate being used that month, but it generally hovers around £30/£35. Anything under this amount incurs no VAT or duty as it is cleared as low value,


but anything above it attracts standard-rate VAT of 14% and duty dependent on commodity. The amount of money involved


is not often large, but it is something that needs to be sorted out beforehand, and the consignee if necessary made aware of what the total price will be. Problems have sometimes arisen because the importer has failed to take account of VAT and duties. South African customs have


got a pretty good idea of the value of most goods, so claiming that ten brand-new boxed


laptops are worth less than £35 probably won’t get you very far. However, it is worth remembering that genuine personal effects are allowed in duty-free, whatever their value. Customs may ask for proof of purchase in this case. Regular


importers are


required to be registered with customs but other than that there is very little red tape and, unlike some other markets, there are no import licences or other trade restrictions. Infrastructure is very good and, now that the


World Cup is over, there are no problems getting courier and express-size consignments onto flights, says Richard Mansell. Eight airlines - SAA Cargo,


British Airways, Air France, KLM, Cargolux, Singapore Internat ional , Mar t inai r and Alitalia are accused by South Africa’s Competition Commission of conspiring over fuel surcharges. Lufthansa has been granted immunity from prosecution in exchange for its cooperation with the enquiry. However, with the World Cup


over, says Richard Mansell. “the airlines are very keen and are offering very keenly discounted rates. “The airlines may not have won themselves many friends, but that’s human nature I suppose.” There are in fact now some


signs that business to South Africa is beginning to recover again, even with the World Cup euphoria dissipating. “Companies are beginning to dip their toes in the market again and whereas before we weren’t seeing too many exhibitions or marketing materials, that is


starting to pick up now.” South Africa is a good market


for UCS. Not only is it one of the strongest in the region but the country also acts as a hub for other countries – and not only its near-neighbours either. Direct flights from Europe to many African countries are limited and even where they are available, the South African office may have a good commercial relationship with agents in other African countries, making it easier to expedite door-to-door shipments.


Port congestion in southern Africa has prompted DAL to deploy two additional vessels on its feeder services between Durban and Mozambique. DAL, which operates a weekly container service jointly with Safmarine/Maersk and MOL from Tilbury, Rotterdam and Bremerhaven via Las Palmas to Cape Town, Port Elizabeth and Durban said its priority was to clear transshipment containers from the Port of Durban in the immediate aftermath of the Transnet strike. Growing peak season volumes


swamping the Port of Beira and, in Maputo, continued equipment failures and limited berthing capacity were also major concerns, all of them leading to higher dwell time for containers.


19 DAL beats port jams


DAL’s director of liner services, Michael Davies, says that the congestion in Maputo is due to a general upsurge in business in Mozambique, particularly from China and Asia, seasonal factors such as the tobacco harvest in Malawi and Mozambique and crane breakdowns, all of which have led to a big build-up in containers in both Durban and Maputo. This has let to waiting times of 5-6 days outside Maputo port. Much of the new business in Maputo is carried on new direct calls from Asia, but there is a lot to be said for feeding this comparatively restricted port rather than going direct. That way, at least, problems in Maputo don’t have a knock-on effect on the deepsea service.


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