June 12, 2024

Crisis at SA Ports: Cape Town Hits Rock Bottom Globally, Container Handling Plummets by 30.3%

Port of Cape Town

Cape Town – The latest World Bank Container Port Performance Index has marked the Port of Cape Town as the lowest performer worldwide, a concerning indicator for South Africa’s logistics sector. Alongside Cape Town, the ports of Durban, Ngqura, and Port Elizabeth also languish in the bottom segment of the list, which comprises 405 global ports.

The City of Cape Town has expressed that this ranking underscores the critical need for substantial reforms and urgent actions. James Vos, the Economic Growth MMC, emphasized the necessity of integrating private-sector investment and participation in port management and logistics to overcome these inefficiencies. “The poor performance of our ports severely hampers economic growth, affecting the flow of goods and the overall productivity of local companies,” Vos noted.

In an effort to tackle these challenges, the city’s Economic Growth Directorate is actively collaborating with strategic business partners across various sectors to enhance productivity and market access. However, Vos acknowledged that despite these efforts, significant hurdles remain as goods continue to struggle through inefficiencies at the port.

Vos is advocating for a quick expansion in private-sector involvement, which could potentially inject R6 billion in additional exports and create around 20,000 jobs. “The involvement of the private sector could bring innovative solutions and more efficient operational practices essential for the movement of diverse and critical products like agricultural goods, manufactured items, and high-value exports such as wine and seafood,” he explained.

National Container Handling Crisis

Meanwhile, a stark reduction in container handling capacity has been reported, with a 30.3% decrease in throughput at South African ports in just one week, as per the latest Cargo Movement Update (CMU). This drop, recorded from 8,244 to 5,737 containers handled daily, was primarily due to extreme weather conditions and equipment failures, severely affecting operations especially at the Port of Durban.

The CMU highlights that these capacity challenges are part of a larger global issue, with container shipping markets experiencing severe capacity shortages and increased freight rates. The report points out that nearly half of the westbound Asia-Europe sailings have been delayed, and port congestion continues to exacerbate the situation in Southeast Asian hubs.

Critics and industry experts, both locally and internationally, have raised concerns about the World Bank’s methodology, suggesting that the Container Port Performance Index might not offer a fair comparison of global port operations. According to a local logistics principal who preferred to remain anonymous, the index doesn’t accurately reflect the operational and size dynamics of various ports. Additionally, the Port of Djibouti has outright rejected the findings of the index, arguing that it does not represent the actual conditions on the ground.

As South Africa grapples with these critical issues in its port operations, the call for immediate reform and the adoption of innovative strategies has never been more urgent.