Posted on June 26, 2024
State logistics group Transnet has hit back at the World Bank’s recent 2023 Container Port Performance Index (CPPI) ranking, which placed South African ports among the worst-performing in the world.
The ranking listed 405 ports worldwide and placed Cape Town at the lowest, at 405, Ngqura at 404, Durban at 398, and Port Elizabeth at 391.
Transnet this week “denounced” the CPPI, saying that the report did not accurately measure port performance and relied on unverified data.
“The (World Bank) incorrectly uses the duration of a vessel’s stay as a measure of container port cargo handling performance, relied on third party sample data, and failed to give a measured terminal access to the data sample for verification prior to publication.”
The World Bank’s report carried a disclaimer stating that it “does not guarantee the accuracy of the data included in this work”.
However, Transnet argued that the results still purport to be an indicative measure of port performance and that the “inaccurate index” has a “damaging reputational impact on measured terminals”.
Time spent at ports
The biggest factor making up the World Bank’s ranking is that of time spent by vessels in ports – which is one of the points of contention that Transnet has.
“Upon entering a port, a vessel is serviced by many role players before the actual loading and offloading of cargo, and these services contribute to the length of its stay [thus the] measurement of vessel stay in port does not take into consideration throughput and other factors that determine the duration of a stay,” said Transnet.
The state logistics group’s executives met with the World Bank’s Transport Specialists, who allegedly advised them that the CPPI only seeks to advise on the stay of a vessel in a port.
Resultingly, “Transnet is of the opinion that the index is, therefore, not correctly titled,” said the group.
The full title of the report is Container Port Performance Index 2023: A Comparable Assessment of Performance based on Vessel Time in Port.
Verifying the data
Another point of contention is that Transnet was not afforded the opportunity to comment on or verify the accuracy of the data or facts used in the report; it only became aware of the report through the media.
Transnet said the data that informed the report was derived from the automatic identification system and liner shipping data.
“Transnet Port Terminals (TPT) has been requesting access to this data over the past few years, without any success… we are of the opinion that we should be given a right of reply before any report relating to our performance is finalised or published,” said Transnet.
It said that at the meeting with the World Bank it was agreed that Transnet could now access the data so it could do its own number crunching.
The CEO of the Southern African Association of Freight Forwarders (SAAFF), Dr Juanita Maree, said that “the CPPI rated our ports as the lowest in the world [but] we have a different view because we use different data sets.”
“We are not at the bottom of the pile. Yes, we have not invested over the last 30 years in port infrastructure, but when we analyse the data [from SAAFF], we see that we are in the region of 250 to 280,” said Maree.
The Recovery Plan
Transnet has previously stated that South Africa’s port issues are complex and cannot be immediately overcome due to serious equipment and maintenance backlogs.
Transnet also used its statement “denouncing” the CPPI to highlight the interventions being made through its Recovery Plan to improve port performance that was badly affected by weather and equipment failures in the last quarter of 2023.
This resulted in extreme backlogs at Durban Container Terminal (DCT) Pier 2 and the Cape Town Container Terminal.
The SAAFF said that delays at ports at its peak had direct costs to the South African economy of R98 million ($5.2 million) a day, while the movement of around R7 billion worth of goods were impeded.
However, congestion has eased since as a result of numerous interventions in its Recovery Plan.
Under Transnet’s Recovery Plan launched in October 2023 “it is clear that there has been a stabilisation in the business as well as real improvement in rail and port operations,” said Transnet.
The Recovery Plan features acquiring new cargo handling equipment, on-site support from manufacturers for technical issues and spares, a 24-hour maintenance program for equipment reliability, contingency plans for weather disruptions, and collaboration with customers and the industry.
TPT has also upgraded its container management system with US-based NAVIS’s help.
Additionally, there have been attempts to encourage private sector involvement in the ports, such as DCT Pier 2. However, Transnet’s decision to choose International Container Terminal Services as a partner for Transnet Port Terminals for a 25-year period is being legally contested by rival bidder AP Moller-Maersk.
Maree said that “the timing of its release unjustifiably tarnishes today’s developments, casting doubt on the efficacy of robust corrective action underway and the… strong strategic public-private consultative initiative by government that serves as the anchor.”
“At the same time, we must acknowledge that there are valid points in the report, and we must not simply dismiss it, but rather constructively use it as another building block and join hands to ensure that we improve our container port performance,” added Maree.
“We continue to collaborate with all our partners to ensure that we remain on course in the implementation of the Recovery Plan and necessary reforms despite historical underinvestment in equipment and maintenance across the business,” said Transnet.
The World Bank has not yet responded to Transnet’s criticism of the report.
