The Realities of Multimodal Container Cargo Movements Through Durban

SOUTHERN AFRICAN FREIGHT TRANSPORT INSTITUTE

The continual debate about container logistics to and from the port of Durban is often clouded by misconceptions and even some disinformation, used to prove points or support ambitions. Official pronouncements often perpetuate the mantra of “corridor development” without examining the facts, and the continual emphasis on future mega developments fails to address the current problems.

The dominance of Durban as the busiest container port in the region, and the urgent need to provide for expansion,  is undisputed, but there are several aspects of the container trade that are often not appreciated, and it is essential that reality is used as the basis for discussion and decision making.

The relative position of Durban among the South African  ports, the effects of the recession and reduced consumer spending in 2009, the increasing volumes of transhipment at Ngqura, and increased container handling (howbeit from a low base) at Richards Bay,  and the recovery in import container volumes in 2010, are all evident in the table below, for the period 2003 -2010.

Containers Handled –All SA Ports (2003-2010) (TEUs)

The effect of the recession has been varied in each port depending on the typical cargo mix, as shown in the year-on-year variations in TEUs handled.

Two aspects of the data are critical for understanding of the logistics implications, firstly, that the numbers indicate movements (container movements are counted in and out), secondly, movements are recorded in “20 ft equivalent units” (TEUs). One standard TEU is a 6 metre container, a 12 metre container equals 2 TEUs. As 50% of import boxes are 12 metre containers, we need to adjust the numbers to calculate the actual numbers of crane movements, or the number of truck loads to be moved.

The next important fact to bear in mind is that about 20-25% of boxes landed and shipped in Durban are “transhipment” containers that do not move out of the port at all; but are stacked for collection by other vessels sailing to other destinations. Transhipment is a critical aspect of the worldwide container system and though profitable for port terminals, the space used by the transhipment stacks increases the pressure on available terminal space and the sorting and relocation of boxes competes with import – export containers for use of handling equipment, and thereby contributes to transport delays.

The impact of the abovementioned factors is that the total numbers of TEUs handled in Durban can be recalculated approximately, as follows:

TEUs handled in 2010 = 2,553,392 therefore 851,130: 6 metre boxes and 851,130: 12 metre boxes

Transhipment              = 435,352 TEU movements (50% landed and 50% shipped)

In South Africa the relative proportions  of full import and full export containers is badly skewed due to the lack of manufacturing capacity and the resultant need to import manufactured industrial and consumer goods. The relative importance of import, export and transhipment container volumes is shown in the graph below.

The number of FULL containers (TEUs) landed was 903,525 and the number of FULL containers shipped was 637, 568, giving a total number of full container movements to and from the port of 1,541,093 TEUs for the year. Total volume of (approximately 513697 x 6 metres and 513,697 x 12 metres) is therefore approximately one million transport moves per year, or 3000 per day). This number varies depending on the mix of 6 and 12 metre containers and numbers carried per vehicle. The actual number of loads is increased by movement of empty containers to and from the port.

The next significant feature of the analysis of container movements is that 65% of containerised cargo movements are consigned to destinations within KwaZulu-Natal and most of those are within the Durban Metro area. This is firstly, due to the logistical necessity to remove the boxes from the port as soon as possible to avoid penalty charges, secondly, it is cheaper to return the boxes to the coastal depots of the owners (shipping lines and leasing companies ) as quickly as possible to avoid demurrage costs. In order to achieve quick container turnaround times, goods are transported to warehouses and depots and destuffed, sorted, stored, (sometimes goods are reweighed, labelled, priced, ironed, placed on hangers, repacked into SA brand packaging, etc, and may be subjected to various other processes), and the boxes are returned to depots located all around Durban.

Destuffing the containers eliminates the weight of the boxes from the long distance transport movement (the containers weigh about 2.4 and 4.3 tons respectively for 6 and 12 metre boxes), and the contents of 3 x 6 metre boxes (or more), can be loaded onto an interlink combination.

The goods are then made up into loads on road vehicles (and may be consolidated) for consignment to a range of destinations in the interior. The road transport cost is minimised by use of optimum vehicle configurations and the coordination of transport operations to achieve high levels of return cargo, (that often includes empty containers).

Most of the containers to be transported inland by road are moved immediately from the port to transporter’s depots, located as near to the port as possible, where they are then reloaded for inland transport. This is necessary due to the complexity and inefficiency incurred in scheduling long-distance vehicles to collect containers from the port. Herein lies one major stumbling block to creating “container hubs” at a distance from the port.

The balance of 35% of full containers that are not destuffed amounts to about 539,382 TEUs p.a. of which approximately 70% (377,567) are transported by road and 30% (161,814) by rail to inland destinations. The return of these boxes to the coast, usually empty, doubles the volumes to be transported by road and rail, in more or less the same proportions.

From the above analysis it is apparent that the continual promotion of the proposition that rail transport of containers can revolutionise logistics in South Africa is largely illusory and based on false appreciation of the realities of the container trade. 85% of rail container movements are transported between 15 origins and 15 destinations (including the ports). City Deep is the largest inland rail container terminal, but other inland destinations include cross border and manufacturing industrial concentration points ; The 15% balance of containers that are consigned all over the country, in very small numbers are really not economical to transport by rail. The logistics of container movement in Port Elizabeth and Cape Town are different to Durban, due to the major commodities handled at those ports, but operating principles are similar.

A recent development that is improving the proportion of full export containers, is the increasing use of empty containers to export a range of bulk commodities at the reduced rates offered for backhaul containers. Enterprising logistics providers are relocating boxes to bagging plants and a range of loading sites in Durban and in Richards Bay, to permit loading of commodities such as scrap metal, ferro-chrome, cobalt, fluorspar, granite, steel in sheets, coils, sheets and pressings, aluminium, manganese, wood-pulp and copper. Most of the filled containers are placed in depots close to the port, in Durban, to await ships to the Far East.

The increasing export of bulk goods in containers is reflected in the graph of container movements in 2003-2010 shown above, despite the recessionary dip in 2009. Unfortunately the trend does not reflect increasing export competitiveness or volumes from South Africa, merely smart logistical thinking.

The peripheral effect of the bulk export development that is of consequence to shipping lines, is that import 6 metre containers from the Far East weigh about 14.0 tons ( 12 metres = 22 tons) but export 6 metre boxes weigh 22 tons; this has obvious implications for ship loading as well as the costs of returning the balance of containers. On the Europe and USA routes the variance is not as great with import 6 metre boxes weighing 18 tons and export boxes about 20 tons for 6 metre and 22 tons for 12 metre boxes. The trend also has very serious implications for potential overloading of road haulage vehicles and rail wagons.

If, as currently proposed, there is to be introduction of the internationally supported, mandatory weighing of all containers before shipment, and the EU 24 requirement in terms of ship stack closing times, there will be a great need to revise current processes and a requirement for significant capital expenditure and systems development by the logistics industry. Any increased need for agility in the logistics system is likely to favour road transport and again underscores the urgent need for planning better road access and more container handling and storage space closer to the port of Durban.

As shown in the table of container volumes, South Africa, and Durban in particular, has a brief breathing space of possibly two years before container volumes again increase beyond the capacity of the access roads, the port infrastructure and operations, and the logistics industry is once again faced with reducing efficiency and rising costs.

It is essential that the future development of the whole of the Durban area, not just the port, makes provision for the future economic and logistical realities of our import – export trade including the need for effective transport, storage and handling. The planning must promote the development of local manufacturing industry if we are to create a competitive environment that attracts businesses and grows the economy of the area, instead of just acting as a conduit to the interior.

Nick Porée

SAFTI - 21 Feb 2011

safti@safti.co.za