Transnet has defended its pick to run its Durban Pier 2 container terminal in the wake of a court challenge by snubbed bidder APM Terminals.
Transnet’s top management has unveiled a turnaround plan to clear the backlog at Durban Port that has led to container vessels queuing for up to two weeks to dock, frustrating shipping lines, businesses and importers across the national logistics supply chain.
The management team highlighted several immediate interventions at a media briefing on Monday, blaming the backlog on the port’s ageing equipment, the inclement weather and the “paralysis” of managers who have struggled to make financial decisions, due to fears of falling foul of warnings from the treasury, after Transnet’s dismal performance in the last financial year.
They said management was also holding an “emergency meeting” with Richards Bay Port users and stakeholders to confront the severe truck congestion on the N2 outside the port, which has been a challenge for months.
This comes after Transnet announced in a statement on Saturday that of the 63 ships recorded at Durban’s outer anchorage on Friday, 20 were container vessels queuing to dock at Durban Container Terminals Pier 1 and Pier 2.
According to a research report published by consultancy GAIN Group in September, Transnet’s inefficiencies are costing the economy R1 billion a day and are forecast to shed 4.9% off the country’s gross domestic product in 2023.
Transnet board chairperson Andile Sangqu, speaking during a media briefing to unveil the turnaround plan on Monday, said management was focused on clearing the backlogs and congestion at both ports. However, he warned that it would take months before operations returned to more efficient levels.
“The problem of port congestion is a complex one and it is something that was due to happen at some point, because of many years of underinvestment in equipment and its maintenance.
“We are working on several measures to turn the situation around. We need to caution that this is going to take some time as the lead times for some of the equipment is anything from 12 to 18 months,” Sangqu said.
“The team is working around the clock to procure this important equipment, to ensure our
port facilities are in line with global best practice.”
In the meantime, he said, Transnet had prioritised the optimisation of port operations, through improved planning and forecasting, which would lead to better anticipation of cargo volumes. An intervention team had already put plans in place to confront the slow turnaround times which are affecting the docking and offloading of containers.
Durban Port’s container terminals’ 2 700 staff members handle more than 40% of South Africa’s port traffic, accommodating six vessels at a time, and handle 2 400 trucks in multiple transactions, with the support of eight trains daily. Vessels are destined for more than 160 markets including the EU, UK, Middle East and US.
Durban Container Terminal manager Earl Peters said the plan for Durban Pier 2 is to ramp up efficiency to handle 4 000 containers a day (from the current 2 500) over the next three months. Under normal conditions, Pier 2 handles about 3 300 containers a day.
However, over the past four weeks, this had plummeted to 2 500 due to inclement weather and equipment problems.
At Pier 1, volumes are expected to increase from 1 200 to 1 500 containers a day.
Peters said initiatives on the cards to ensure that the recovery plan to clear the backlog succeeds included the acquisition of 16 gantry cranes for Pier 1 by the second half of 2025 and four ship-to-shore cranes for South Quay for Pier 2 in the 2025/26 financial year.
Work is also underway to refurbish and maintain critical equipment to improve asset utilisation at Pier 1 and Pier 2 and this would be completed by August 2024.
He said staff efficiencies were also being addressed with the introduction of three 12-hour shifts, which would see staff working a four days on and four days off basis, to reduce the number of breaks in-between shifts to boost operational efficiency. The new shifts will be implemented from 1 December.
Transnet acting group chief executive Michelle Phillips said an internal task team of members from specialised disciplines had recently completed an exercise to eliminate waste and introduce rapid improvements.
“They collected performance data across all shifts; analysed each vessel and the workings of all cranes to note arising problems; identified limiting factors and quantified improvement levers.
“Management at our port terminals are working around the clock with industrial engineers from the task team to maximise berth performance,” Phillips said.
“With all these initiatives in place, we expect it will take a maximum of seven weeks to clear the backlog at Pier 1 and 15 weeks for Pier 2. This will make a significant difference to the flow of container traffic through the port.”
“It is crucial that we stabilise our operations through these short-term interventions while we continue with the broad recovery plan to improve Transnet operations.
“The plan is exactly what is says it is — a plan to turn around the business and ensure significant and sustainable improvements in all our operations and in particular in rail and ports,” Phillips said.
The longer-term improvements include a new container management system to improve efficiencies and the acquisition of new equipment.
New contracts will be in place by the end of the year for the service of ship-to-shore cranes, -gantry cranes, straddle carriers, reach stackers and empty container handlers, and existing equipment is being refurbished or replaced.
“We appreciate the understanding shown by our customers and are in constant contact with shipping lines on releasing the congestion fee surcharge for import containers,” Phillips said.
Transnet management has scheduled an emergency meeting with port users and other stakeholders to discuss the road congestion challenges facing the Port of Richards Bay along the N2.
Transnet recently implemented a truck booking system as a mechanism to create order in the queuing system, however, the solution does not include trucks headed to back-of-port facilities.
As a result, even when trucks have been booked, the volumes arriving at the port gates sometimes far exceeds the pace at which trucks can be processed at the permit offices and the terminal, which were originally designed exclusively to handle rail freight.