November 2021

How can African Ports be more competitive at

Global level
Nancy Bansal – Global Economy

DO WELL DO GOOD
Executive Summary
• The gap between African ports and global airports lies in the higher
costs (221% higher) and the higher turnaround time (152% higher)
• Only around 15% of the transportation out of the port happens through railways.
Rest is done through Trucks, Creating road congestion in city and around the
port. This increases the time to transport goods and hence increase in costs.
• Most African ports do not have the capacity to handle gearless ships and port
equipment is often inadequate or poorly maintained.
• Steps to change the authority body and improve efficiency must be taken to
make the ports more competitive at the global level
• A 1% improvement of infrastructure in the destination country lowers transport
costs by 0.20% on average

Copyright ©2019 ShARE. All Rights Reserved 2

 Why it is important to look after Port competitiveness

• Globalized supply chains have enabled goods and services to be transported across the world to meet
the ever increasing demands of populations. Ports are gateways for 80% of global merchandise trade
by volume and 70% by value. As an emerging market region endowed with vast natural resources and
a young and growing population, SSA must accelerate its market access and trade both across the
region and with the rest of the world.
• This is important to stimulate economic growth, diversify its economies, reduce the inflationary
effects of weak transport and logistics infrastructure, become globally competitive, create
employment and reduce poverty.
• Globally Container shipping market size growth is forecasted at 4.6% CAGR. This is a huge number to
ignore. And in the coming years, this is bound to increase and hence making ports competitive is a
must for growing country like Africa.

% In c re a s e in Glo b a l C o n ta in e r S h ip p in g Ma rk e t s ize
5.60

5.10
4.80

4.80

4.60
4.00
3.10
1.20

2015 2016 2017 2018 2019 2020 2021 2022

Copyright ©2019 ShARE. All Rights Reserved 3

 The gap between African ports and global airports lies in the higher
costs (221% higher) and the higher turnaround time (152% higher)

Higher Costs Higher turnaround time

C o mp o n e n ts o f c o n ta in e r p o rt co s ts (% d ev i - Turnaround Time
a tio n fro m g lo b a l ave ra g e )
2017-18 2018-19
• Average turnaround time for global
airports is around 1.19 days and some

271.00
269.00

267.00
of the fastest airports’ time being 0.5
day. But Africa’s biggest port Durban’s
turnaround time is 3 days which is
225.00
221.00
211.00

152% higher.
198.00
178.00

Consequences
166.00

• Higher turnaround time means

136.00
132.00

containers and ships are stuck in the

ports for longer time, that means
higher charges, leading to increased
89.00

costs

To t a l P o r t T e r mi n a l To t a l P o r t Ca r g o T o t a l P o r t Ca r g o Du e s
Pric ing Ha n d l i n g Pric ing (. . . Du e s a n d Aut horit y
ex c luding Ch a r g e s t e r mi n a l pric ing (. . .
c argo d. . . handli. . .

Source: https://www.portsregulator.org/doc/Global-Pricing-Comparator-Study-2018_19.pdf
https://www.researchgate.net/figure/Turnaround-times-for-selected-major-ports_tbl1_263499595
Copyright ©2019 ShARE. All Rights Reserved 4
 Infrastructure, State authority issues are the major reasons for
the increased port inefficiency

• Only around 15% of the transportation out of the port happens through railways. Rest is done
through Trucks, Creating road congestion in city and around the port. This increases the time to
Transportation transport goods and hence increase in costs.
through trucks
• Lag effect between the availability of rail services and the time such a service was ordered
impairs the timeliness of supply chain management.
Transnet – state • Being one of its own kind of entity which owns and operates port, Transnet has become
owned port monopolistic entity which has prevented private players in the industry. This has resulted in
handling little to no competition and thus operational and management inefficiencies in the ports.
• Port efficiency is one of the important parameter of competitiveness as it decides cost and
authority
turnaround time for the users.

• Hinterland access is constrained by the dual impacts of limited corridor development and the
Hinterland additional friction imposed by borders. This creates accessibility and market distortions,
Access Issues particularly at border crossings, further challenging port development. Rail transportation in many
SubSaharan African countries is not present, operational or able to provide adequate hinterland
services, the load is usually dominantly assumed by road transportation..

• Most African ports do not have the capacity to handle gearless ships and port equipment is
Lacking often inadequate or poorly maintained. As a result, most African ports cannot receive ships
Infrastructure exceeding 2,500 TEUs, even though ships of up to 15,000 TEUs are now sailing the major
international routes.

Source: https://www.afdb.org/fileadmin/uploads/afdb/Documents/Publications/African%20Development%20Report%202010_CH%202.pdf
https://www.internationaltransportforum.org/Pub/pdf/14Durban.pdf

Copyright ©2019 ShARE. All Rights Reserved 5

 Government of South Africa can take following steps to increase
the competitiveness

Ownership Traffic Increasing Port Growing Marine Attracting

Model Management Efficiency : Time Clusters Investments

Authorities can foster Governments can

Better traffic the maritime cluster significantly improve
management in and by optimizing land- the investment
The ports should
Moving to a landlord around ports would use at the interface environment in the
work on improving
ownership model enable port freight to between port and following three ways:
their infrastructure so
that allows private better negotiate hinterland. There is 1. Greater
that the parameters
operators to drive congested road roomfor improvement collaboration
of average
port efficiencies by systems. This can be of inland depots and between countries in
turnaround time can
investing in better sone by making distribution centres establishing efficient
be improved. Such
equipment, logistics better road for value-added international and
as – Anchorage time,
processes and infrastructure so as logistics, which local trade.
Berth Time, Berth
systems. to reduce congestion would better suit the
Occupancy 2. A favorable
and stop ‘rent needs of the firms
seeking behaviour’. that cluster in the investment
hinterland of a port. environment.

Source: https://www.internationaltransportforum.org/Pub/pdf/14Durban.pdf
https://www.pwc.com/ng/en/assets/pdf/africas-ports-article.pdf

Copyright ©2019 ShARE. All Rights Reserved 6