SA port terminals: capacity and utilisation review 2014/15

SA port terminals: and utilisation review 2014/15

1. INTRODUCTION... 1 2. TOWARDS MEASURING PORT CAPACITY AND UTILISATION... 2 3. PURPOSE OF THE REVIEW... 8 4. CAPACITY OF SOUTH AFRICAN PORT TERMINALS... 9 4.1. THE NPA S LONG TERM PORT DEVELOPMENT FRAMEWORK... 12 4.1.1. Land use... 13 4.2. TERMINALS AND BERTHS... 16 4.2.1. Container terminals... 18 4.2.2. Automotives... 23 4.2.3. Dry bulk, Break Bulk and Liquid Bulk... 28 4.3. TERMINAL UTILISATION PER PORT... 35 4.3.1. Port of Durban... 35 4.3.2. Port of Richards Bay... 36 4.3.3. Port of East London... 37 4.3.4. Port of Ngqurha... 38 4.3.5. Port of Port Elizabeth... 39 4.3.6. Port of Cape Town... 40 4.3.7. Port of Saldahna... 41 5. SUMMARY... 42 6. WAY FORWARD... 46 7. CONCLUSION... 49 8. BIBLIOGRAPHY... 50

FIGURE 1: DEPICTION OF A PROCESS FLOW AT PORTS REPRESENTING KEY POINTS FOR PERFOMANCE MEASUREMENT... 4 FIGURE 2: TERMINAL OPERATOR PERFORMANCE STANDARD (TOPS): SYSTEMATIC PORT PERFORMANCE MODEL... 5 FIGURE 3: PROGRESSION FOR PORT CAPACITY UTILISATION: PRODUCTIVITY, EFFICIENCY TO CAPACITY EXPANSION... 7 FIGURE 4: LAND USE (HA) FOR CARGO AND NON-CARGO FUNCTIONS ACROSS THE 8 COMMERCIAL PORTS (2012)... 13 FIGURE 5: PROJECTED GROWTH IN LAND AREA ACROSS THE VARIOUS CARGO WORKING CATEGORIES... 15 FIGURE 6: BERTH PRODUCTIVITY - CONTAINER TERMINALS... 20 FIGURE 7: TEUS PER BERTH METRE BASED ON DESIGN, INSTALLED CAPACITY AND 2013/14 THROUGHPUT... 21 FIGURE 8: TEUS PER TERMINAL AREA (HA)... 22 FIGURE 9: TOPS PERFORMANCE FOR CONTAINER TERMINALS... 22 FIGURE 10: ANNUAL RO-RO UNITS PER METRE OF BERTH... 25 FIGURE 11: ANNUAL RO-RO UNITS PER HA OF TERMINAL AREA... 25 FIGURE 12: RO-RO TERMINAL PRODUCTIVITY IN RELATION TO DESIGN AND INSTALLED CAPACITY AND 2013/14 PERFORMANCE... 26 FIGURE 13: TOPS AUTOMOTIVE SECTOR PERFORMANCE 2013/14... 27 FIGURE 14: DRY BULK TERMINAL PRODUCTIVITY... 32 FIGURE 15: BREAK BULK THROUGHPUT PER METRE BERTH AND PER TERMINAL AREA (2013)... 33 FIGURE 16: LIQUID BULK THROUGHPUT PER M/BERTH AND PER HA 34 FIGURE 17: TERMINAL PRODUCTIVITY IN THE PORT OF DURBAN... 36 FIGURE 18: TERMINAL PRODUCTIVITY IN THE PORT OF RICHARDS BAY... 37 FIGURE 19: TERMINAL PRODUCTIVITY IN THE PORT OF EAST LONDON... 38 FIGURE 20: TERMINAL PRODUCTIVITY AT THE PORT OF NGQURHA... 39 FIGURE 21: TERMINAL PRODUCTIVITY AT THE PORT OF PORT ELIZABETH... 40 FIGURE 22: TERMINAL PRODUCTIVITY IN THE PORT OF CAPE TOWN... 40 FIGURE 23: TERMINAL PRODUCTIVITY AT THE PORT OF SALDAHNA... 41 TABLES TABLE 1: LAND USE ACROSS THE DIFFERENT PORT FUNCTIONS 2012 TO 2040+... 14 TABLE 2: WATERSIDE CAPACITY OF SOUTH AFRICAN TERMINALS... 16 TABLE 3: LATENT CAPACITY ACROSS THE MAIN COMMODITY TYPES HANDLED IN SOUTH AFRICAN PORTS... 17 TABLE 4: CONTAINER TERMINAL CAPACITY ACROSS THE SYSTEM AS PER LTPDF (2013)... 18 TABLE 5: CONTAINER TERMINALS THROUGHPUT (2013/14) VS. DESIGN AND INSTALLED CAPACITY... 19 TABLE 6: TOPS ACROSS THE SHIP RATE FOR CONTAINERS... 23 TABLE 7: RO-RO TERMINAL CAPACITY ACROSS THE SYSTEM... 23 TABLE 8: RO-RO TERMINAL CAPACITY BASED ON THROUGHPUT AGAINST DESIGN AND INSTALLED CAPACITY... 24 TABLE 9: TOPS REPORTED PERFORMANCE FOR RO-RO... 27 TABLE 10: BULK TERMINALS ACROSS THE SYSTEM (CONTINUES ON NEXT PAGE)... 28 TABLE 11: THROUGHPUT AGAINST DESIGN CAPACITY FOR DRY BULK (2013)... 30 TABLE 12: THROUGHPUT AGAINST DESIGN CAPACITY FOR BREAK BULK (2013)... 30 TABLE 13: THROUGHPUT AGAINST DESIGN AND INSTALLED CAPACITY FOR LIQUID BULK (2013)... 31 TABLE 14: SUMMARY OF TERMINAL USE BY CARGO TYPE AND PORT... 43 TABLE 15: BERTH UTILISATION FACTOR... 48 TABLE 16: EXAMPLE OF POSSIBLE OPTIMAL BERTH UTILISATION AND ATS FOR SA TERMINALS... 49 iii

1. Introduction 1. Ports have an essential role to play in facilitation of trade, which is a key driver of economic growth. As a result there is generally keen interest in how ports and port terminals perform in facilitating effective movement of goods and people. Although container traffic accounts for less than half world trade by volume, containerized cargo globally accounts for more than two thirds of the value of goods traded. Accordingly, there has been a bias toward measuring and improving the performance of container terminals. 2. In 1987, a process of defining common indicators against which the performance of a port can be measured gained momentum with the publication of the United Nations Conference on Trade and Development (UNCTAD:1987) monogram. Notwithstanding literature that abounds prior and after the UNCTAD process, the monogram represented the first attempt to document, for port managers and practitioners in developing countries, common performance indicators for calculating port productivity, identifying data requirements including who should collect and how such data should systematically be collected which informs system designs to date. 3. Practitioners have continued to influence the determination of port performance measures (see various papers delivered at the UN Ad Hoc Expert Meeting on Assessing Port Performance, Geneva 2012); or Research groups tasked with recommending the best strategies for improving port performance at country or regional levels (See Tioga Research Report on North American container terminals 2010; the Infrastructure Development Bank funded study on Latin American and Caribbean Ports (LAP) and the annual publication of port statistics for Australian ports in the Waterline Reports). 4. Various academics have also weighed- in on the matter with research on various aspects of port performance which ranges from establishing common methodologies in defining technical efficiencies of ports against which ports can be measured, to applying variations of either the Stochastic Frontier Assessments (SFA) or the Data Envelopment Analysis or a combination (see for example Cullinane: 2010; Gonzales & Trujillo (2004), Tally (2007), Merk and Dang (2012)) in measuring technical efficiency of ports. Annual publications which provide global comparisons and analyse trends and improvements in the performance of global ports, such as the JOC White Paper on Port Productivity amongst others, contribute to the wealth of knowledge and approaches on port productivity. 5. Most literature shows that port performance measurement is affected by complex interplays between various players and factors in the port system where no two ports are alike, save for

the functions they perform i.e. facilitating the transfer of goods from the sea-side to the landside and vice versa. Each of the distinct groups of port users try to weigh in and influence measures. Shipping lines, road transport companies, and cargo owners each focus on and require different levels of service and would thus be keen on different measures in the performance of container terminals. As an example, cargo owners, concerned about the time that cargo stays in a terminal making it important therefore that appropriate standards be set for cargo dwell times. 6. Shipping lines are driven by the need to transport cargo on time at the lowest cost and hence, are concerned about, transit time, and reliability of service, costs and productivity levels at a port which often is translated through a demand for the right equipment at terminal. In turn this informs the measures they would be interested in and support in ports. 7. Merk and Dang (2012) research on Efficiency of world ports in container and bulk cargo (oil, coal, ores and grains), even though limited to the case-study methodology which makes it difficult to replicate in other contexts, nonetheless lays a good base for calculating port efficiency in the non-container sector and takes previous studies on Stochastic Frontier Analysis (SFA) and Data Envelopment Assessments (DEA) forward in both container and noncontainer sector. 8. The most recent study by Salminen (2013) measures port in containers, dry bulks, break bulk, liquid bulk terminals making a link between assessments and investment strategies in uncertain investment contexts. Similar assessment will be useful in the Regulator s next iteration of the and utilisation reviews. 9. Whilst noting these global developments in port and utilisation as well as measurement of port productivity and efficiency, this review report will provide a basic snap shot and base-line from which future reviews can conduct further analysis including efficiencies in the South African system. 2. Towards measuring port and utilisation 10. The ability of a port to handle cargo and/or vessels timeously and/or economically as well as the ability of a port to manage the expectations and requirement of various grouping of port users, in the various stages depicted above, determines in part whether vessels and cargo are attracted to a port, the other part being market factors. Where alternative to a port exists, 2

then effective utilisation of facility expressed in the overall vessel turnaround time becomes important. 11. The existence or provision of port and utilisation thereof in the various stages in the movement of vessels and goods i.e. anchorage, terminals (berths and yard) and intermodal links (road and rail) are thus an important part of measuring port performance. In this regard, this review presents a status quo of existing capacities in the various South African terminals that handle containers, automotives, dry bulk, break bulk and liquid bulk commodities. 12. Measuring port productivity and defining the right measures is important in that, even with varying and different levels of endowments in ports, ports are essentially there to provide services to/for vessels (bringing or carrying cargo), cargo (including some storage thereof for defined periods of time) and the interface with cargo transportation inland (road or rail haulage). 13. Figure 1 tracks the movement of a vessel from the time it arrives at anchorage, to berthing and operations and sailing out of the port. Using vessel turnaround time as a proxy for how well the port or terminal or berth is operating, the figure also highlights key points in the journey where performance is measured through time indicators. 14. The item marked (A) shows that generally the time a vessel spends in anchorage is measured as it indicates how vessels queue before berthing. However, given time spent in anchorage may be caused by a myriad of reasons, including: weather, waiting for orders, early arrival, or terminal/berth readiness or availability of marine services, only those reasons related to terminal readiness and/or availability of marine services are considered, as these are within the control of port management. 15. From anchorage, a vessel will be readied for actual berthing, including the carrying out of marines services to bring vessel to berth, this is considered as transit time (B) the treatment of which also affects berth productivity. If this transit time is included in the calculation of berth utilisation it may reflect unproductive use since this time is not accounted for the in the movement of cargo across the ship. The practice is thus for transit time to be measured but excluded from the measurements of berth utilisation. Stevedoring and related functions must be carried out before the vessel can be worked or operation can commence. This is also considered as vessel non-working time depicted as (C1). 3

Figure 1: Depiction of a process flow at ports representing key points for perfomance measurement Source: Report on Study of Indian Ports 16. Vessel working time is the time between the commencement of operation and completion of operation i.e. working time. Idle time (C2) includes latching and rope untying time in preparation for departure. Lastly, vessel sailing from berth from the last rope being dropped is considered non- working time. 17. Figure 1 assist in visually summarizing the steps and key points in the handling of a vessel where key performance indicators and measures of port performance are defined. The more commonly measured benchmarks on productivity, each with their own indicators and data inputs, can be categorized into those that cover: Berth productivity (TEU/metre of berth length), Quay crane productivity, (TEU/crane/hour), Yard productivity (TEU/hectare of yard), and Workforce productivity (TEU/employee/year). 4

18. The Terminal Operator Performance Standards (TOPS) of the NPA, introduced in December 2013, follows the same logic and identifies key performance measures in a systematic port performance model as outlined in Figure 2. Figure 2: Terminal Operator Performance Standard (TOPS): systematic port performance model 19. The NPA has started a process of measuring port performance in four key points depicted in Figure 2, namely; a. At anchorage measuring berthing delays b. At berth - measuring berth occupancy, berth utilisation, gross crane moves per hour and ship working hour; c. At terminal the measure is throughput and dwell times; d. Point of intermodal exchange of cargo measures truck turnaround time, truck waiting time, rail turnaround time and trains departing on time. 20. Ports are contested spaces where players want to maximize the benefits that can be derived from the system whilst minimizing their direct cost as much as they can. Benefits from the system are not always mutually inclusive e.g. port pricing of South African ports is done at system level through the Required Revenue method which is a zero sum system i.e. all port users must contribute in varying degrees to the total CAPEX and maintenance of port infrastructure. When segments of port users require investment to be made to expand and reduce congestion in ports, they equally should be responsive to shared increases in port charges to achieve the objective. 5

21. In addition, Cullinane (2010) also posits that increasing port efficiencies may temporally result in higher rather than lower port costs in the short term(e.g. where it is achieved through deployment of more resources). Creation of often displaces existing for a period of time which, notwithstanding proper planning, and it is often unavoidable, resulting in less throughput which is a key indicator in most measures of port productivity and efficiency. Deployment of additional, e.g. equipment, tends to affect the throughput during the period of adjustment making the investment not cost effective during such periods. As an example, in the expansion of container terminal at Pier1 in the Port of Durban in 2013, the total TEU throughput reduced resulting in the Durban Container terminal losing two places in the Top 100 Container Terminals of the world. 22. The nature and character of port infrastructure i.e. long lead times and expansive capital outlays, makes it imperative that optimal use of current infrastructure is encouraged to make the most of existing infrastructure. In the short term, of a port can only be increased by adding cranes, improving efficiency or optimising container yards, often focusing on increasing stacking density and operating hours. 23. Medium to longer term strategies to address may include adding more infrastructure in the form of expanding or building new quay walls, dredging and deepening of berths, building new terminals. Overall, terminal establishes a terminal s limit and may point to areas where terminal productivity and efficiencies can be increased in the port development. It is not static, as it can be changed over time either through optimization of the system or through expansion. 24. The of a port is usually defined as the maximum traffic it can handle within given parameters and is informed by fixed and variable factors. Fixed port factors include maritime channels, berths, terminals, storage facilities and other transport linkages. Variable factors included cranes, carriers, IT systems, labor as well as marine equipment and services. 25. In assessing port performance, a distinction is also made between design (theoretical) and installed (operational) of terminals. Design is the maximum throughput that can be achieved in a terminal as designed whilst installed, also called operational, refers to optimal amount of throughput achievable given resources deployed in terminal at a given time. 6

Measures Characteristics Stage 1: Port or Terminal Start up Stage 2: System Optimisation Stage 3: Capacity Investments Low utilisation System and technology improvements Expand existing Low cost operation Full deployment of land, capital and labour Create new Capacity against throughput Terminal throughput per crane, yard, hectare, labour, Dwell times, berth occupancy, Road/Rail Turnaround time etc Installed vs. throughput Financial measures Labour Figure 3: Progression for port utilisation: productivity, efficiency to expansion 26. Figure 3 graphically illustrates the progression of port development from start up, to the stage of system optimization and expansion. Generally, low-utilisation and low cost operations characterise ports or terminals at the start. Port or terminal performance and productivity at this stage is measured simply by assessing throughput against installed. Financial and labor measures can be added if cost effectiveness dimensions of port are to be addressed. 27. As port operations become more complex and involve more players, ports tend to make system and technology improvements that allow them to take full advantage of land, capital and labor. The objective is to reach the limit of the system with full deployment of land, capital and labor. 28. When limits of expansion are reached, investment in capital equipment to minimize labor costs is often then the route taken, exhausting throughput capability of the system, technology, land, and capital equipment. Measures of congestion such as dwell times, berth occupancy become important at this stage as they indicate the extent to which port or terminal infrastructure can handle more throughput or whether these should be expanded. 29. Utilisation indicators measure how intensely port facilities/ is used i.e. percentage of actual use of resources and maximum possible use of those resources over time. The most collected utilisation measures are berth occupancy (the ratio of time a berth is occupied by a vessel to the total time available in that period) and storage utilisation. High berth occupancy rates i.e. above 65 70% have been accepted to be a sign of congestion. Berth and terminal 7

utilisation are better indicators than just berth occupancy as they measure the time that a berth or terminal is productively utilized rather than just the time a vessel is alongside the berth. 30. For the purpose of this review, the terminal expressed in terms of number and length of berths dedicated to handling particular cargo type, the size of the terminal in hectares as well as design and installed capacities as extrapolated from the NPAs LTPDF are used to paint a picture of the extent to which existing is being used. 31. In line with the National Ports Act, Act 12 of 2005, the Ports Regulator (the Regulator) must, through economic regulation of the South African port system ensure that the National Ports Authority (the NPA) effectively manages South Africa s port system in a manner that enables the objects of the Act to be met, one being the development of an efficient port system supporting the country s economic development. 32. The optimal and efficient use of existing, i.e. sweating of assets, by the NPA is an important indicator for the Regulator and is reflected in the current tariff setting methodology which highlights an intention to include efficiency measures in future tariff determinations. 3. Purpose of the review 33. The purpose of this PRSA review of the NPAs and utilisation is to begin to identify and analyse existing terminal including terminal area, berth, design and installed, and based on 2013 throughput, to assess the extent to which is utilised across cargo types and port terminals. 34. The review of the NPAs port and utilization will be an ongoing process and it is important that a baseline be set as a start. This is especially so where the Regulator has had to collate for the first time information on South African port terminals and their capacities. 35. This first review of the NPAs and utilisation thus simply intends to lay a baseline on existing port infrastructure and the extent of its utilisation. The review does look at some productivity measured in terms of terminal throughput against design and installed based on the NPAs data/information collated from the Long Term Port Development Framework and the 2013 throughput data for terminals. 36. It is intended that the review process will, in the short term serve to create dialogue on how the Regulator should encourage improvements in the use of port infrastructure. It is envisaged that ultimately there will be common definitions and monitoring of the 8

performance of South Africa s port terminals, alongside the Operator Performance Standards of the NPA and indications of where further analysis is required in subsequent reviews are given. 37. Efficiency and comparisons against international benchmarks will be done in a separate Benchmarking report which takes the utilisation and productivity statistics reported herein and compares them against reported performance of other terminals internationally. 4. Capacity of South African port terminals 38. Empowered by the National Ports Act, the NPA develops both operational and long term port development plans that guides and directs how South African ports will grow. It has developed the Long Term Port Development Framework (LTPDF) which provides a long-term vision for the development of South Africa s 8 of 9 the commercial ports namely Ports of Richards Bay, Durban, East London, Ngqurha, Port Elizabeth, Mossel Bay, Cape Town and Saldahna Bay. 39. The LTPDF is consulted with and supported by port users as required by the Act and Regulations, with the current LTPDF consulted with stakeholders in May 2014. The LTPDF provides a long term vision and direction of the NPAs CAPEX programme, as well as engenders support for the CAPEX programme especially from port users from whom tariffs are raised to provide, sustain and expand. Before delving into the provisions of the LTPDF, a brief overview of the various ports and their development over time is provided in the items that follow. 40. As noted in the report of the Development Bank of Southern Africa and Presidency (DPME: 2012), each port in South Africa has its own history and origins. In the case of Cape Town, its trading history goes back to the formal Dutch settlement at the Cape in 1652. But before this, ports such as Saldanha Bay, Mossel Bay, Durban and several other locations were visited by Portuguese and then Dutch traders stopping for shelter, water or even small-scale trading. The modern commercial era of South Africa s ports commenced with the unification of the country geographically and politically at the beginning of the twentieth century, following the 1899-1902 Anglo-Boer War. Port of Durban 41. History traces the development of the Port of Durban to the appointment of the first harbor master for Durban around 1840, although the use of the Bluff to shelter ships is recorded as 9

far back as 1497. In the 1930s to the 1950s the Bayhead area in the Port of Durban was used as a base for flying boats. Over the years Durban became the busiest general cargo port and the largest and busiest container terminal in the Southern Hemisphere. It services its own industrial and commercial region in addition to the rest of South Africa s hinterland through Gauteng as well as regional traffic. To accommodate growth, the port has grown its container handling with second container terminal at Pier One become operational in 2007. Plans exist to extend Pier 1 Container terminal through the infilling of Salisbury Island (which belongs to the South African Navy). The Port channel has been widened (222m at its narrowest point) and deepened (16,5m in the inner channel) to allow bigger vessels to be accommodated. 42. The main commodity categories handled at Durban are: containers, vehicles, grains (rice, maize), forestry products (including woodchip), liquid bulks (crude oil, petroleum products and chemicals), coal, fertilizer, steel, fruit, sugar, and passengers (including cruise vessels). Although the whole port is owned by Transnet through the NPA, a number of terminals are operated by private companies. Port of Richards Bay 43. The Port of Richards Bay was developed between 1972 and 1976 in response to the demand for additional rail-linked port infrastructure to service export potential from the (now) KwaZulu-Natal and Mpumalanga coalfields. A deepwater facility was needed because of the development internationally of very large bulk carriers. Richards Bay was chosen because of the large lagoon; the ease of dredging; direct links with the national rail network, an adjacent town, Empangeni, to stimulate initial development; and an ample supply of fresh water. 44. The port is now South Africa s premier dry bulk port, handling an increasing variety of bulk and neo-bulk commodities in addition to break-bulk. The coal terminal, single bulk liquids berth and bulk liquid storage and phosphoric acid loading facility are operated by private companies. Port of East London 45. The Port of East London is South Africa s only river port situated at the mouth of the Buffalo River. As a common user port, it boasts the largest grain elevator in South Africa, a car terminal on the west bank which includes a four story parking facility connect by dedicated road to Mercedes Benz factory. The Port also has a multipurpose terminal on the East Bank which handles containers, a dry dock, a repair quay, pilot and fishing jetty, the Latimer s Landing Water frontage as well as bunkering with fuel oil and marine gas oil. 10

Port of Port Elizabeth 46. Although services started in 1836 (a surfboat for handling cargo and passengers) and the first jetty was constructed in 1837, the Port of Port Elizabeth was established as a proper harbour in 1933 with the construction of the Charl Malan Quay (now used as the container and car terminals) which for the first time offered protection from open seas. 47. Agriculture and farming deciduous and citrus fruits and wool crop played an important role in the development of the Port of Port Elizabeth, prior to the growth of containers and motor industry in prominence in this port. The fishing industry and passenger ships (accommodated at the fruit terminal berths when calling at the Port) are important players in the Port. Other products handled in this port include Manganese ore (which by 2017/18 will be relocated to the Port of Ngqurha) and petroleum form other South African ports. The Port of Port Elizabeth will be losing some of its commercial activities to the new and deeper Port of Ngqurha. Port of Ngqurha 48. The Port of Ngqurha is South Africa s 8 th and latest commercial port development. It is a deepwater port capable of handling post-panamax dry and liquid bulkers as well as 6,500 TEU cellular container vessels. The port s main breakwater is the longest in South Africa. At a construction cost of R10b, the port of Ngqurha was to have an aluminium smelter as its anchor tenant with a required expenditure of about R1, 8b by Eskom. With the energy crisis in 2008, the aluminium smelter became unlikely against the pressures for Eskom to provide adequate and inexpensive energy on a national basis. This brought about a change in focus for the Port of Ngqurha from a deep-water bulk port to container handling with operations on the container terminal commencing in 2009. The Coega Industrial Development Zone (IDZ) as well as the Nelson Mandela Bay Strategy all aim to optimize the existence of the two ports in this undeveloped region. Port of Cape Town 49. The Port of Cape Town, established in 1652 as a station for ships of the Dutch East India Company, has evolved to the two docks Ben Schoeman Dock and Duncan Dock respectively housing container and the multipurpose, fruit terminal, dry dock, repair quay and tanker basin. The port has ship repair facilities the Sturrock Dock, Robinson Dry Dock, a synchrolift, a repair quay in the Duncan Dock and Berth A where ship repair is done by a private company. Port of Mossel Bay 50. The Port of Mossel Bay is the smallest commercial harbor in the South African system. It caters for the developing oil industry which began with Mossgas in the late 1980 s as well as 11

small but significant fishing industry in the region. The Port has not grown other significant commercial activity over the years. Port of Saldahna Bay 51. The Port of Saldahna Bay was developed from a need to facilitate export of iron ore from the Northern Cape. Until the late 1970s the Port of Saldanha was a small fishing village. The opportunity to export iron ore from Sishen in the Northern Cape led to the construction of a 800km railway line, together with storage and loading facilities for the largest dry bulk carriers in the world. The first vessel loaded with ore left Saldanha in September 1976. The construction of the Saldanha Steel Mill near the port led to export of steel manufactured from more iron ore which is railed from Sishen directly to the mill. 52. It is supported by more than 800kms of rail line connecting the port to mines at Sishen in the Northern Cape. The rail line was originally built by Iscor (now Acelor Mittal) before being taken over by Transnet Freight Rail. As one of the deeper harbours in the South African port system, the Port of Saldahna accepts vessels up to 20.5m draught with the harbor master conditionally accepting vessels up to 21.5m. 4.1. The NPA s long term port development framework 53. The Long Term Port Development Framework (2013) provides a picture of NPAs CAPEX plans for the short term (2012 2018), medium term (2018 2040) and long term (2041 and beyond) with provision/expansion of port for the five main commodity classes i.e: containers; dry bulk (coal, iron ore, manganese, sugar, chrome ore, copper, lead, woodchips); Liquid bulk (petroleum products, chemicals, vegetable oils); Break-bulk (fruit, steel, scrap metals, Ferro alloys, pig iron, fish & fish products); and Automotive at the various ports. 54. The NPA uses a Freight Demand Model to project the possible extent of future traffic growth in cargo handled at each of the ports. The model is developed at a broader transport level by Transnet with a dedicated section for ports. Combined with the LTPDF is the port component of the Transnet Market Demand Strategy (MDS) which provides traffic and demand forecasts for which the NPA develops strategies to maintain/sustain or expand infrastructure and in the short, medium and long term. 55. It should be noted that the long term port development framework is not a set or prescriptive plan, but rather an indication of the direction that the NPA believes port development will go based on current, assumptions and projected demand. The plan is therefore flexible and should accommodate changes where assumptions and projections 12

change. The LTPDF s periodisation has short term being the period 2012 2017, medium terms is 2018 2040 and long term is 2040 and beyond. 4.1.1. Land use 56. Figure 4 summarises land side in terms of available land for uses in cargo working and non-cargo working areas in the South African port system. Figure 4: Land use (ha) for cargo and non-cargo functions across the 8 commercial ports (2012) 535 3562ha, (68%) 1664 ha, (32%) 419 367 145 Open space/npa other Liquid Bulk Commercial Logistics Vehicles 97 66 17 Dry Bulk Container Ship Repair Fishing 18 57. The status quo as summarised in Figure 5 has total port land of 5 226 hectares. More than half (3 562ha) of land available to the NPA is categorized as open space or NPA other i.e. land which is currently not productively used. Open land alone is 1 625ha, which suggests availability of land to support the NPA Capex expansion programme into the future. What is not obtainable from the LTPDF are the port specifics that informs how much of this land is usable, must remain open land, and how much is available for further developments in the future. 13

58. The remaining 1 664 ha covers both cargo and non-cargo working land uses. A significant portion of this is currently used for Dry Bulk (535 ha), Liquid Bulk (419ha) and container terminals (367ha). Automotives account for the least size of land at 66 ha. 59. On non-cargo working land uses, Commercial logistics at 145 ha accounts for the next most significant land use parcel in the system. Remaining land uses are shared amongst Ship-repair (whose prominence in the system is anticipated to increase owing to Operation Phakisa), fishing, vehicles and maritime commercial. 60. Plans for land use in the medium to long term are depicted in Table 1. According to the NPAs port planning principles, South African ports must increasingly play a supportive role for economic growth and trade by facilitating back of port developments. This is evidenced in the projected growth in maritime commercial and commercial logistics land uses from 162ha (145 +17) in 2012 to 309ha by 2019 and 522ha beyond 2040. This reflects a 260% growth in commercial logistics land and similarly a 253% growth in maritime commercial land in the next 27 years. Table 1: Land use across the different port functions 2012 to 2040+ Land Use Current (2012) (hectares) 2018 2040 Medium Term (hectares) 2040+ Long Term (hectares) Hectares % growth hectares % growth (on current ha) (on current ha) Containers 367 812 121% 1 100 200% Vehicles 66 94 42% 107 62% Dry Bulk 535 916 71% 819 53% Liquid Bulk 419 833 99% 884 111% Ship Repair 97 140 44% 117 21% Commercial 145 249 72% 522 260% Logistics Fishing 18 29 61% 28 55% Maritime 17 60 253% 60 253% commercial TNPA other 1 937 2 380 23% 3 750 94% Open Space 1 625 1163-28% 1 506-7% Total 5 445 6 991 9 218 Compiled from Long Term Port Development Framework (NPA) 2013 61. For cargo working land, container terminals with 367ha of land area in 2012 grows to 1 100ha by 2040 and beyond, a planned 200% growth. Dry bulk land area which currently is the biggest at 535ha is anticipated to grow to 819ha, a 53% growth by 2040+, whilst land area for liquid bulk which currently is the second largest land area is anticipated to have grown by 111% to 884ha in the long term. Bucking the global containerization trends where most 14

commodities are being containerized, the LTPDF anticipates growing the dry bulk land use by 71% in the medium term and by an overall 53% over the long term which will take the current 535ha to 819ha by 2040 and beyond. 62. In the context of Operation Phakisa, current LTPDF only anticipated to grow land use for ship repair by a modest 44% in the medium term and overall 21% in the long term i.e. from 97 ha currently to 140 ha in the medium term and reducing to 117ha in the long term. 63. Figure 5 graphically shows the trend in the planned growth for the various land uses in the system. Figure 5: Projected growth in land area across the various cargo working categories 64. Dry bulk, Liquid Bulk and Containers account for the most land area currently and in the future. Vehicles and ship repair facility accounts for the least land area currently and in the future growing to just above 100hectares. 65. The land use part of the LTPDF estimates the requirement for land for port development based on long term volume projections which are more difficult to project than short term. The Regulator will thus, in subsequent reviews, interrogate more rigorously the modeling, data and modeling that informs the reported land use in Table 1. 15

4.2. Terminals and Berths 66. The terminal details in this review are from the NPA s Long Term Ports Development Framework LTPDF (2013) which provides the extent of port terminal area in hectares, numbers of berths including a distinction between usable berths and unusable berths, berth length as well as the design and installed capacities of the various terminals. This terminal indicates how much a port is able to handle in terms of cargo-throughput. The physical attributes of a port or terminal also determines the size of vessels that can call. Table 2: Waterside of South African terminals Terminal Total Berths Usable berths Berth Length(m) Installed Design Containers 18 17 5 590 4 790 043 8 013 000 Vehicles 7 5 2 050 681 041 850 000 Dry Bulk 30 25 8 081 187 666 802 229 084 000 Break Bulk 40 37 6 476 17 344 903 32 513 153 Liquid Bulk 18 17 3 715 26 141 684 66 451 207 Total 113 101 25 912 Compiled from Long Term Port Development Framework (NPA) 2013 67. As depicted in Table 2, South African terminals total a berth length of about 26kms, with 113 berths and 1 618 hectares of terminal areas for cargo handling. Out of the total berths available in the system 101 are reported as usable. Reasons for berths not being used include, berths used for lay-bye, or temporary decommissioning due to dredging or where cargo is not handled due to superstructure not installed i.e. terminal not operating for example, 2 berths out of 4 in the Port of Ngqurha. 68. Dry and break bulk terminals account for a combined total of 14 557m of berth length and a total of 62 usable berths out of 70. Liquid bulks are handled at 17 out of 18 usable berths, with 3 715 m of berth length. Container cargo is handled in 17 of 18 berths with 5 590m of berth length and a total of 367 hectares. Vehicles are handled in the three ports of Durban, Port Elizabeth and East London which have a combined total of 5 berths (from a total of 7). The automotive sector is served by 2 050m of berth length and 66 hectares of available land area. 69. With regards to terminal, the container terminals in the South African system are designed to handle up to 8 013 000 TEUs per annum. Just over half of this is available as installed. This suggests that there is significant for container handling in the system before additional can be laid down. 16

70. The system has to date handled 681 041 units of vehicles in a year against the design of 850 000 units a year again suggesting that there is excess in the system. The same trend applies to dry, break and liquid bulk where installed is lower than design. 71. In terms of the LTPDF, deep water berths at the Ports of Richards Bay (14m to 19m), Saldahna (up to 23m) and Ngqurha (16.5m to 18m) account for 6kms of berth length. The remainder of the terminals have berth depth which is medium to shallow i.e. 12m and below. 72. The NPA in the LTPDF plans to expand the system to 57 000m (57km) where 50% of the berths will be 16m and deeper to accommodate global trends in bigger vessels requiring deeper berths. In the long term (by 2042), the berth length across all ports is anticipated to grow to 92kms with about 66% of this made up of deep water berths. The next section reports on the latent in the South African port system which is arrived at by taking the difference between design and installed capacities. It points to additional that can be made available to handle cargo. As highlighted before, design is the maximum throughput that a terminal can handle per annum based on infrastructure that has been put down and all things being equal. Installed refers to the maximum throughput that a terminal can handle per annum, taking other performance factors into account i.e. installed superstructure, the appropriate and capable labour and systems as prevailing market conditions. Table 3: Latent across the main commodity types handled in South African ports All Installed Design Capacity Latent Containers (TEUs pa) 4 790 043 8 013 000 3 222 957 Vehicles (units pa) 681 041 850 000 168 959 Dry Bulk (mtpa) 173 666 802 155 884 000 (17 782 802) Break Bulk (mtpa) 17 344 903 32 513 153 15 168 250 Liquid Bulk(klpa) 26 141 684 66 451 207 40 309 523 Compiled from Long Term Port Development Framework (NPA) 2013 73. In Table 3 latent in the terminals handling the various commodity or cargo types is calculated. This was arrived at simply by calculating the difference between installed or operational from design. A more through assessment would take into account the factors outlined above i.e. superstructure and labour. Accordingly, the outcomes here are cautiously interpreted as indicative of what may be happening in the terminals. The results shows that most of the terminals are either reaching their design levels or have latent. 17

74. The review also looks at productive use of the terminal in terms of throughput per metre of berth and throughput per hectare of terminal area based on the 2013/14 throughput figures. This is only a snap shot of berth and terminal area productivity. A better picture on productivity will be attained when the comparisons are with historical and projected throughput, which will be a focus of the next iteration of the review. The next iteration will also analyse productivity of the berths and terminal area in relation to vessels callings in each of the berths and terminals based on the recently acquired Vessel Tracking System data. The next section reports on the breakdown and analysis per cargo handling terminal. 4.2.1. Container terminals 75. Container traffic is handled through dedicated terminals in the Ports of Durban, Ngqurha, and Cape Town. However, the Port of East London does not have a dedicated terminal, containers are handled at the break-bulk terminal and berths instead. Container traffic that is also handled at the Port of Richards Bay and the Port of Saldahna break-bulk terminals is not included herein. 76. Having established that there is latent of about 3,2million TEUs in the system, we review how is spread across the terminals handling container cargo. Table 4: Container terminal across the system as per LTPDF (2013) Container terminals Installed Capacity (TEUs pa) Design Capacity (TEUs pa) Installed as a percent of design Durban 3 020 000 3 020 000 0% Port Elizabeth 325 211 600 000 54% Ngqurha 491 442 2 800 000 18% East London 53 390 93 000 57% Cape Town 900 000 1 500 000 60% Total 4 790 043 8 013 000 60% Compiled from Long Term Port Development Framework (NPA) 2013 77. Table 4 shows that, overall, installed at South Africa s container terminal stands at 60% of design. Reportedly, only in the Port of Durban s container terminals does the installed match the design, which shows full utilisation of design. The Port of Ngqurha, on the other hand, has design of 2,8m TEUs per annum with installed for only 491 442 TEUs meaning that only 18% of its design is being used. The Ports of East London and Port Elizabeth are operating at just above half their design at 57% and 54% respectively. The container terminal at the Port of Cape Town is operating at 60% of the terminal s design. 18

78. Container throughput in the system in 2013 is summarized in the second column of Table 5. Based on 2013 throughput levels, with throughput of 4,6million TEUs through the system, overall container terminals are operating at 58% of their design which suggests sufficient in the terminal. This contrasts with the same throughput measured against installed where the terminals are operating at 96% of installed. Rather than an indicator of terminals running out of, this high figure reflects the existence of latent and the extent to which improvements can be made in installed to handle more throughput in the system. Table 5: Container terminals throughput (2013/14) vs. design and installed Container terminals 13/14 Total TEUs Throughput against design (%) Throughput against installed (%) Durban 2 660 144 88% 88% Cape Town 907 796 61% 101% Ngqurha 713 306 25% 145% Port Elizabeth 291 233 49% 90% East London 41 080 44% 77% Total 4 613 559 58% 96% Compiled from Long Term Port Development Framework (NPA) 2013 79. The averages also hide the situation in the individual ports. The Durban container terminal, based on 2013 throughput against design is operating at 88% of its design. The least used container terminal when considering throughput against design is the Port of Ngqurha with only a quarter (25%) of its design reportedly being used. Because the terminal is designed as a four berth operation, but in 2013 was operating with installed of a two berth terminal, this registers the Port of Ngqurha s container terminal as using 145% of its installed. The same trend applies with the Port of Port Elizabeth which is only utilizing 49% of its design but throughput against installed reflects a higher rate of 90%. This points to the need for further analysis of all the factors around installed capacities in the terminals to determine the extent to which the design can be optimized before terminals are said to have run out of as suggested by this reported figures. 80. Berth productivity indicates how productively a berth is used by dividing the number of units over the metre of berth length per annum only for vessels that are able to call a port. It is calculated as throughput per berth length. 19

Annual TEU/berth(m) 1200 1000 800 1032 991 789 818 600 400 459 200 0 Durban Ngqurha Cape Town Port Elizabeth Average Annual TEU/berth m Figure 6: Berth Productivity - container terminals 81. Figure 6 shows the number of containers moved per metre of berth in each of the terminals. The average performance across the system was 818 TEUs per metre of berth. With 1032 TEU/m the Port of Durban moves the highest number of TEUs per metre of berth. This is followed by the Port of Ngqurha at 991 TEUs per metre of berth. Both the Ports of Cape Town and Port Elizabeth performed below South African container terminal average. Although the averages allow for comparisons to be done per terminal, as done in international studies (see Drewry: 2014), regard should be paid to how the terminals are performing in relation to their design an indicator of what is possible based on infrastructure already provided as well as the installed an indicator of what is feasible based on investment in superstructure and operational standards for the terminals. 82. Figure 7 provides a more comprehensive picture of berth productivity based on design, installed and 2013/14 through for each of the terminals. The difference between current throughput and maximum throughput based on design and installed highlights where additional throughput is possible by addressing installed issues. It is assumed that design and installed account for the effects of terminal layout, the alongside depth and vessels sizes accommodated at each port, as well as superstructure and port operating systems in each of the terminals. 83. The Port of Durban s Container terminals, which handled 1032 TEUs per metre of berth, were 39 TEUs short of the number of TEUs that they can handle in terms of design and installed. The challenge is with the Port of Ngqurha, which based on design, has the potential to handle 3 889 TEUs per metre of berth against the 991 TEUs per metre of berth that the port achieved in 2013/14.The productivity of its installed is 683 TEUs per 20

TEUs per berth metre metre of berth which is 570% of installed. In simple terms this points to significant latent in the Port of Ngqurha and raises questions about installed as well as total volumes and projected growth of containers handled by the Port. 4500 4000 TEUs per berth meter: design vs installed vs 2013/14 throughput 3889 3500 3000 2500 2000 1500 1000 500 1171 1171 1032 991 683 1303 782 789 945 512 459 0 Durban Ngqurha Cape Town Port Elizabeth Teus per berth metre on design TEUs per berth metre on installed 2013/14 TEUs per berth metre Figure 7: TEUs per berth metre based on design, installed and 2013/14 throughput 84. The Port of Cape Town whose throughput in 2013/14 was 789 TEUs, and is operating at its optimal berth productivity levels in terms of installed. However, this is only half of the design, pointing to possibility of more throughput if installed is increased to be closer to the design. 85. Figure 8 averages terminal productivity in terms of annual TEUs per hectare of terminal area to an annual count of 11 222 TEUs per hectare. The terminals in the Ports of Durban (14 379 TEUs/ha) and Cape Town (13 156TEU/ha) handle more TEUs per/ha in the system. Respectively the two terminals have 185ha and 69 ha, making the Port of Cape Town the more productive of the two. 21

3.9 3.3 3 4.0 5 4 4 4 4 6 5 6 8 8 11 13 13 17 28 31 35 49 48 49 Annual TEUs/hectare 16000 14000 12000 10000 8000 6000 4000 2000 0 14 379 13 156 11 222 9 264 8 090 Durban Cape Town Ngqurha Port Elizabeth Average Annual TEUs/hectare Figure 8: TEUs per terminal area (ha) 86. With 77ha and 36ha respectively and accounting for an annual 9 264TEUs/ha and 8090TEUs/ha, the Ports of Ngqurha and Port Elizabeth are performing below the average of the country s four container terminals. Other factors measures that affect terminal and berth productivity must be assessed. This includes cargo dwell times, ship turnaround times, container handled per ship working time, etc. CONTAINER SECTOR Baseline 2012/13 Actual Y1 TOPS Y1 Annual Throughput (Million TEU's) Cargo Dwell Time Import (days) Cargo Dwell Time Exp (days) Cargo Dwell Time Trans (days) Rail Turn Around Time Truck Turn Around Time Ship Working Hour Terminal Berthing Delays Figure 9: TOPS performance for container terminals 87. Some of these are measured in TOPS and are reported in Figure 9 which shows Cargo dwell times (import, export and transshipment) as well as rail/truck turnaround time in terminals and ship working hours. Across the system, import cargo dwell time is reported to be 4 days, for export containers it was 6 days whilst transshipment boxes could stay for up to 13 days from the previous year s 17 days. Further analysis of this reported performance against throughput in the terminals will be a focus of the next iteration of the review taking into 22

account installed superstructure etc., size of storage, and terminal stacking policy all of which affects the time it takes for boxes to be handled across at the berth/quay and in the terminal area. Table 6: TOPS Across the Ship Rate for containers Container terminals 13/14 Total TEUs TOPS performance (ship working rate per hour) Durban 2 660 144 49 Cape Town 907 796 55 Ngqurha 713 306 54 Port Elizabeth 291 233 40 88. According to the Terminal Operator Performance Standards (TOPS) phase 1 performance report, the Ports of Cape Town and Ngqurha handled 55 and 54 containers per ship working hour which indicates high productivity of installed in the terminals. An observed general trend in terms of setting of terminal performance standards was/is based on previous performance rather any optimal measure. Whilst it is practical starting point, it does not allow for definition of efficient measure, rather perpetuating or slightly improving on previous performance. 4.2.2. Automotives 89. Imports and exports of vehicles in South Africa is through the Roll-On, Roll-Off (Ro-Ro) terminals in the Ports of Durban, Port Elizabeth and East London which collectively have a design of 850 000 units per annum. In Table 7 a summary of the endowments of the terminals is provided. There is a total of 7 berth with 5 being used, 2 050m of berth length and 69ha of terminal area across the system for handling automotive traffic. The maximum throughput that has been handled in the three ports, based on installed to date has been 681 000 units. Table 7: Ro-Ro terminal across the system Automotives Terminal area(ha) Total Berths Usable berths Berth Length (m) Operational Capacity (Units per annum) Design Capacity (units per annum) Design /oper ational Durban RoRo 39 3 3 1149 480 000 520 000 92% Port Elizabeth 21 2 1 342 133 552 200 000 67% East London 9 2 1 559 67 489 130 000 52% Sub-total 69 7 5 2050 681041 850 000 80% Compiled from Long Term Port Development Framework (NPA) 2013 23

90. Table 7 shows the operational as a proportion of design to give an indication of the extent to which the terminals are used as designed. The Ro-Ro Terminal in the Port of Durban shows operational to be at 92% of design, the Port of Port Elizabeth at 67% and Port of East London at 52%. This suggests that the Port of Durban s Ro-Ro terminal is closer to running out of than the other two terminals. However, at Ro-Ro terminal is not only determined by the throughput that is handled per metre of berth, but also by the storage (parking space, cargo dwell times etc), factors that are not included in this review at this stage. Table 8: Ro-Ro terminal based on throughput against design and installed Ro-Ro Terminal Design Capacity (units per annum) Operational (units per 2013/14 Throughput (TEUs) Throughput against design (%) Throughput against operational (%) annum) Durban 520 000 480 000 501 456 96% 104% Port 200 000 133 552 133 194 67% 100% Elizabeth East 130 000 67 489 56 193 43% 83% London Total 850 000 681 041 81% 101% Compiled from Long Term Port Development Framework (NPA) 2013 91. Table 8 shows that with 2013 throughput figures, the Ro-Ro terminals in the three ports used 81% percent of the installed. The Port of Durban (96%) recording the highest, followed by Port of Port Elizabeth (67%) and Port of East London. The extent to which the terminal are utilised against installed/operational shows the Durban (104% and Port Elizabeth (100%) terminals operating at full installed capacities. The Port of East London is utilizing 83% of its installed. When measuring throughput against operational, the Ro-Ro terminals come through as operating beyond their. As indicated above, further analysis looking at factors such as cargo dwell times, parking space, as an example are necessary before concluding that additional should be deployed in this sector. 92. Calculating the productivity of the Ro-Ro Terminal in terms of the number of units handled per metre of berth annually and the number of units handled per hectare annually provides the following picture. 24

500 450 400 350 300 250 200 150 100 50 0 Ro-Ro Units per annum /metre of berth 436 389 309 101 Durban Port Elizabeth East London Average Figure 10: Annual Ro-Ro units per metre of berth 93. The total throughput of 681 041 units per annum over 2 050m of berth gives an average throughput of 309 units per metre of berth. The Port of Durban and Port Elizabeth had the higher throughput per berth metre at 436 and 389 units per metre of berth respectively. With the second largest berth metres for handling vehicles at 559m, the Port of East London s 101 units per metre of berth is below the average and reflects on the lower annual throughput handled at this Port. 94. Terminal utilisation in terms of throughput per total terminal area (in hectares) is presented in Figure 11. On average the system handles 8 481 Units per terminal area per annum. 14000 12000 10000 8000 6000 4000 2000 0 Ro-Ro Units pa/ha terminal area 12858 8481 6343 6244 Durban Port Elizabeth East London Average Units pa/ha terminal area Figure 11: Annual Ro-Ro Units per ha of terminal area 25

Units per metre of berth 95. The Durban Ro-Ro terminal handles 12 858 units per hectare. Both the Ports of Port Elizabeth (6 343) and East London (6 244) handled similar number of units per hectare. The Port of East London s terminal utilisation rate is higher than its berth utilisation rates. This shows higher utilisation of its 9 hectares of terminal area for Ro-Ros. The Port of East London s berth and terminal utilisation rates indicate the productive use of terminal area and availability of to handle more throughput at berth. 96. An assessment of berth utilisation in relation to design and installed provides as sense of the level to which available is utilised, other things constant. 700 600 Ro-ro terminal productivity in relation to design & installed vs. 2013/14 performance 585 500 400 453 418 436 391 389 300 233 200 100 121 101 0 Units per berth metre/ design Units per berth metre/installed Units per berth meter 2013/14 Durban Port Elizabeth East London Figure 12: Ro-ro terminal productivity in relation to design and installed and 2013/14 performance 97. Figure 12 illustrates what the annual throughput per Ro-ro terminal should be based on design, installed and in relation to the reported number of units handled in 2013/14. 98. The Durban Ro-ro terminal throughput per meter of berth, overall, is in line with the number of units that the terminal should handled as per design and installed. With 389 units per metre of berth, the berth productivity for the port of Port of Port Elizabeth for 2013/14 is in line with that calculated from its installed (391 units per metre of berth). However, with design at 585 units per metre of berth, there is extra handling that can be availed through adjustments in installed. 26

5 7 5 13 14 11 10 12 10 40 45 45 162 146 150 565 553 596 99. With 101 units per metre of berth, the berth productivity of the Port of East London is close to its installed of 121 units. This however, is only half of its design, again pointing to additional that can be gained in the system through adjustments in installed. Table 9: TOPS reported performance for Ro-Ro Container terminals 13/14 Total TEUs TOPS performance (ship working rate per hour) Durban 501 456 136 Port Elizabeth 133 194 172 East London 56 193 172 100. Actual operational hours for Ro-Ro terminal as reflected in the number of vessels calling within these terminals not just port hours, may yield different outcomes and will be further investigated. RO-RO SECTOR Baseline 2012/13 Actual Y1 TOPS Y1 Annual Throughput Cargo Dwell Time (Thousand) Import (days) Cargo Dwell Time Exp (days) Cargo Dwell Time Trans (days) Truck Turn Around Ship Working Hour Time Figure 13: TOPS Automotive sector performance 2013/14 101. Figure 13 reflects the TOPS outcomes for 2013/14 according to which ship working hour for automotive sector is on average 150 hours. Cargo dwell times of 5 days for import vehicles, 11 days for Export vehicles and similarly 10 days for transshipped vehicles. 102. The next phase of the review can assess utilisation by applying these TOPS outcomes at berth and terminal levels to further refine our understanding of the factors and determine the extent to which what has been reported as latent in these berths and terminals can be further utilised. 27

4.2.3. Dry bulk, Break Bulk and Liquid Bulk 103. Bulk products are handled at all of the South African ports with terminal capacities as summarised in Table 10. The bulk products are handled either at the dry bulk terminals (dominated by coal, iron ore and manganese), or break-bulk terminals (dominated by agricultural products, grains, project cargo etc) or liquid bulk terminals (edible and non-edible oils including petroleum) terminals. 104. There are 25 usable dry bulk berths (out of 30) in the system with 8 081m of berth length and terminal area of 525ha, the largest cargo working space in the system. Breakbulk has 37 usable berths (out of 40), 6 476m of berth length and 230.6 ha terminal area. Liquid bulk terminal comprise 17 usable berths (out of 18), 3 715m berth length and 276,5 ha terminal area. Table 10: Bulk terminals across the system (continues on next page) Dry bulk Terminal area(ha) Total Berths Usable berths Berth Length(m) Installed Capacity (mtpa) Design Capacity Installed / Design Capacity Saldahna 73 2 2 1260 50 736 955 58 000 000 87% Cape Town 7 3 2 569 1 400 000 2 100 000 67% Port Elizabeth 18 1 1 360 4 459 369 5 000 000 89% Durban 59 9 7 1581 11 000 000 11 000 000 100% Richards Bay 280 6 6 2060 91 000 000 110 000 000 83% (coal) Richards Bay 85 8 6 1863 14 600 000 21 000 000 70% East London 3 1 1 388 470 478 984 000 48% Sub-total 525 30 25 8081 173 666 802 155 884 000 111% Break-bulk Terminal area(ha) Total Berths Usable berths Berth Length Installed Capacity (mtpa) Design Capacity Installed / Design Capacity Durban 81 14 14 871 4 000 000 4 000 000 100% Mossel Bay 3,6 1 1 274 30 084 53 000 57% Cape Town 22 7 6 1368 4 000 000 10 877 071 37% Saldahna 20 6 3 874 1 708 047 3 300 000 52% Richards Bay 81 6 6 1244 7 200 000 9 935 915 72% East London 10 2 2 492 3 096 166 667 2% Ngqura 5 1 1 316 0 3 000 000 0% Port Elizabeth 8 3 4 1037 403 676 1 180 500 34% Sub-total 230,6 40 37 6476 17 344 903 32 513 153 53% 28

Liquid Bulk Terminal area(ha) Total Berths Usable berths Berth Length Installed Capacity (mtpa) Design Capacity Installed / Design Capacity Saldahna 0,5 1 1 360 6 946 229 25 000 000 28% Cape Town 11 2 2 489 3 400 000 3 400 000 100% Port Elizabeth 16 1 1 242 972 208 2 926 829 33% Durban 157 9 8 1765 11 000 000 21 000 000 52% Richards Bay 73 2 2 600 1 011 432 3 152 778 32% East London 19 1 1 259 918 688 3 000 000 31% Mossel Bay 0 2 2 0 1 893 127 7 971 600 24% Sub-total 276,5 18 17 3715 26 141 684 66 451 207 39% Compiled from Long Term Port Development Framework (NPA) 2013 105. Table 10 shows the operational at 100% of design at the Liquid Bulk terminal in Cape Town Port, and Break and Dry-Bulk terminals in the Port of Durban. Indicating that operations at these terminals have reached operational. 106. Overall, Dry Bulk terminals are operating at 111% of their design. However, this belies the range where at the low end is the Port of East London with operational at only 48% of design against terminals in the Port of Durban that on average have operational at 100% of installed. 107. Operational at Break Bulk terminal overall, is 53% of installed. Next to the Port of Durban at 100%, is the Port of Richards Bay whose operational is at 72% of design. Port of East London stands at only 2% of operational against its design, indicating significant underutilization of bulk terminals in this port. 108. In liquid bulk terminals across the system, operational is only 39% of design suggesting significant latent overall. Only in Durban is operational or installed at half (52%) of design. 109. The throughput for break, dry and liquid bulks are captured in Table 11 together with an indication of what that throughput represents in terms of utilisation of the terminal in 2013. 110. It shows overall utilisation of Dry Bulk terminal in 2013 at 70% of design overall. At the level of terminals, the Port of Port Elizabeth s Dry Bulk terminals are handling more than their design and operational at 122% and 137% respectively. This is followed by terminals in the Port of Durban and Saldahna both with utilisation rates of 95% of the design (which for the terminal in Durban is the same as operational ). The data suggests that the Port of Durban s terminals have reached and would experience more congestion levels which would be characterized by vessels waiting for long periods of time for berths. 29

Table 11: Throughput against design for dry bulk (2013) Dry bulk Design Capacity (units per annum) Operational Capacity (Units per annum) 2013/14 Throughput(mtpa) Throughput against design (%) Throughput against installed (%) Durban 11 000 000 11 000 000 10 443 977 95% 95% Cape Town 2 100 000 1 400 000 646 659 31% 46% Saldanha 58 000 000 50 736 955 55 051 928 95% 109% Richards Bay East London Port Elizabeth 131 000 000 105 000 000 87 116 278 67% 83% 984 000 470 478 105 637 11% 22% 5 000 000 4 459 369 6 099 605 122% 137% Total 173 666 802 159 464 084 70% 85% 111. The next dry bulk terminals with high utilisation rates are the Port of Richards Bay dry bulk terminals (including RBCT) with throughput representing a utilisation of 67% of the terminal s design. The Port of East London has the least utilisation of its design at 11%, followed by the Port of Cape Town at 31%. This trend continues when throughput is considered against operational/installed. Table 12: Throughput against design for break bulk (2013) Break-bulk Design Capacity (units per annum) Operational (units per annum) 2013/14 Throughput (mtpa) Throughput against design (%) Throughput against installed (%) Durban 4 000 000 4 000 000 3 460 865 87% 87% Mossel Bay 53 000 30 084 57 664 109% 192% Cape Town 10 877 071 4 000 000 449 244 4% 11% Saldanha 3 300 000 1 708 047 873 803 26% 51% Richards Bay 9 935 915 7 200 000 3 383 847 34% 47% East London 166 667 3 096 93 748 56% 3028% Ngqurha 3 000 000 0 80 031 3% N/A Port Elizabeth 1 180 500 403 676 316 714 27% 78% Total 8 715 916 27% 50% 112. Due to non-homogeneity of cargo handled at breakbulk terminals within those terminals annually and across the ports, breakbulk terminals demonstrate large variations in utilisation. Performance of breakbulk terminals is depicted in Table 12 in terms of throughput against design and installed. Overall, only 27% of Break-Bulk terminals are utilizing their design capacities in South African ports. In 2013 the Port of East London and Mossel Bay s throughput puts their performance at way above installed. It is possible that installed in this case is understated resulting in such significant performance. 30

113. Table 13 provides the summaries for liquid bulk terminals throughput against design and installed of the terminals in the respective ports. The 39,2million kiloliter of throughput in the system in 2013 represents utilisation of 59% of the design of the liquid bulk terminals across the country. However, assessing the same throughput against installed shows some strains in the system with an average of 150% utilisation. Table 13: Throughput against design and installed for liquid bulk (2013) Liquid Port Bulk Design Capacity (units per annum) Installed (units per annum) 2013/14 Throughput (klpa) Throughput against design (%) Throughput against installed (%) Durban 21 000 000 11 000 000 26 790 888 128% 244% Mossel Bay 7 971 600 1 893 127 2 118 992 27% 112% Cape Town 3 400 000 3 400 000 2 605 900 77% 77% Saldanha 25 000 000 6 946 229 4 260 761 17% 61% Richards Bay 3 152 778 1 011 432 1 777 610 56% 176% East London 3 000 000 918 688 836 843 28% 91% Port 2 926 829 972 208 30% 91% Elizabeth 887 466 Total 66451207 26 141 684 39 278 460 59% 150% 114. Terminal productivity for dry bulk, break bulk and liquid bulk terminals was assessed in terms of throughput per berth and terminal area. It should be noted that with liquid bulks, some of the product not handled at the berths, but through SBM, may be included in the total throughput. This makes attribution of throughput to berths and to terminal area to be imprecise requiring further work in data capturing and reporting in the next review phase. What is presented is based on assessment of existing data. 31

50000 Dry Bulk. mtpa/m berth 800000 754136 Dry Bulk. Mtpa/ha terminal area 45000 43692 42289 700000 40000 600000 35000 30000 500000 25000 20000 16943 18490 400000 300000 338867 311130 284790 15000 200000 177017 10000 5000 6606 1136 272 100000 92380 35212 0 mtpa/berth length 0 mtpa/hectare Saldanha Richards Bay Port Elizabeth Durban Cape Town East London Average Saldanha Port Elizabeth Richards Bay Durban Cape Town East London Average Figure 14: Dry Bulk terminal productivity 115. Figure 14 highlights productivity figures in the dry bulk terminals in terms of annual throughput per metre of berth and annual throughput per hectare of terminal area available at each port handling dry bulk cargo. On average the system handles 18 490 million tons of throughput per annum (mtpa) on a metre of berth. The Ports of Saldahna and Richards Bay performs above this average handling 43 692mtpa and 42 289 per metre of berth. They are followed by the Port of Port Elizabeth which handled 16 943mtpa, the next highest tonnage per metre of berth, though below average. These three ports which handle coal, manganese and iron ore, collectively account for the highest dry bulk throughput in the South African port system. 116. Handling 338 867mtpa per hectare the Port of Port Elizabeth performs slightly higher than the Port of Richards Bay on this measure with the latter handling 311 130mtpa per hectare. The Port of Saldahna handled 754 136mtpa per hectare which set the average at a very high 284 790mtpa per hectare. 32

Break bulk mtpa/m berth Break bulk mtpa/hectare 4500 50000 4000 3973 45000 43690 42727 41776 3500 40000 39589 3000 2500 2000 1500 1000 2720 1000 1 073 35000 30000 25000 20000 15000 10000 20420 16018 16006 9375 22067 500 328 305 253 210 191 5000 0 mtpa/m berth 0 mtpa/hectare Durban Richards Bay Saldanha Saldanha Durban Richards Bay Cape Town Port Elizabeth Ngqura Port Elizabeth Cape Town Mossel Bay Mossel Bay East London Average Ngqura East London Average Figure 15: Break bulk throughput per metre berth and per terminal area (2013) 117. Terminal and berth productivity for break bulk terminals, also measured in terms of through put per metre of berth and per terminal area in hectares is presented in Figure 15. The system handled break bulk cargo at an average of 1 073mtpa per metre of berth in 2013. The Port of Durban recorded the highest number of break bulk tons per metre of berth at 3 973mtpa per metre, followed by the Port of Richards Bay which handled 2 720mtpa per metre of berth. The rest of the Ports were below the average line. 118. Average performance on terminal area productivity, which is calculated in terms of annual throughput per hectare, is 22 067mtpa per hectare. The four ports of Saldahna (43 690mtpa), Durban (42 727mtpa), Richards Bay (41 776mtpa) and Port Elizabeth (39 589mtpa) performed above the average with the remainder below the average. 33

Liquid Bulk (klpa)/ m berth Liquid Bulk, klpa/ha 16000 15179 250000 236900 14000 12000 11835 200000 170643 10000 150000 8000 6000 5329 100000 84509 4000 2000 3667 3231 2963 2038 50000 55467 44044 24351 0 Durban Saldanha Cape Town Port East Elizabeth London Richards Average Bay 0 Cape Town Durban Port Elizabeth East London Richards Bay Average kilolitres pa/m berth kilolitres pa/hectare Figure 16: Liquid bulk throughput per m/berth and per ha 119. Figure 16 summarises the productivity of the liquid bulk terminals measured by annual throughput against berth length and hectares of land available. As mentioned previously, the total throughput figures includes the liquid bulk cargo that would have been handled through the Single Buoy Mooring (SBM) which is not accounted for by the given berth length. A result of this is the absence of numbers for the Port of Mossel Bay and the Ngqurha. Figure 16 is thus presented only as indicative. In the next review data issues with liquid bulk terminals will be resolved with the NPA. 120. Overall, the Port of Durban accounts for high utilisation of berth i.e. above average throughput per berth metre in Container, automotive, Break Bulk and Liquid Bulk sectors, whilst the Port of Saldahna accounts for high throughput per metre of berth in the Dry Bulk sector. The Port of Port Elizabeth accounts for the lowest throughput per berth metre in containers, whilst the Port of East London accounts for the lowest throughput per berth in the Automotive, Dry Bulk and Break Bulk sector and the Port of Richards Bay s Liquid Bulk Terminal accounts for the lowest throughput per berth metre for liquid bulk. 121. With regard to throughput per hectare, Durban s container and Automotive terminals registered the highest throughput per hectare, whilst the Port of Saldahna accounts for the highest throughput in the Dry and Breakbulk sectors with the Port of Cape Towns Liquid bulk terminal s throughput being the highest. The Port of East London s Automotive, Dry Bulk and Breakbulk sectors account for the least throughput per hectare in the system, followed by 34

Port Elizabeth in the container sector and Richards Bay in Liquid Bulk. A summary across the system is provided at the end, in section 5. 4.3. Terminal utilisation per port 122. In this section terminal performance is consolidated and reported per port with some port level comparisons given for productivity measures per commodity type handled. In order to compare like with like, the throughput per cargo type was converted into metric tons using the following conversion rates: Containers: 1 TEU = 21tons (as per Global Port Pricing Comparator Study assumption) subject to confirmation of ration between full and empty Auto: 1 metre = 2 tons (as per tariff book) and average length of 2.5m per unit (as per GPPCS assumptions). Liquid bulk: due to different density per cargo, individual calculations must be done based on TOPS data to establish a conversion factor for liquid bulk. For the purpose of the review, the given kiloliters per annum were used without conversion. 4.3.1. Port of Durban 123. Comparing productivity across the terminals in the Port of Durban as captured in Figure 17 shows more throughput per metre of berth in the liquid bulk terminals relative to the other terminals. This is followed by productivity in the container terminals which handles 12 384 tons per metre of berth. 35

16000 15179 Port of Durban Port of Durban 14000 12000 12384 Dry bulk 177017 10000 Containers 172548 8000 6606 Liquid Bulk 170643 6000 4000 2000 0 3973 2180 Liquid Bulk Containers Dry bulk Breakbulk Automotive tonspa/m berth Automotive 64290 Breakbulk 42727 0 50000 100000 150000 200000 (tons)pa/ha Figure 17: Terminal productivity in the Port of Durban 124. Containers (185ha) and liquid bulk (157ha) accounts for the most hectares of terminal area in the Port of Durban. However, the productivity levels in Figure 17 show that the Dry Bulk terminals have handled slightly more tons per annum per hectare, relative to containers and liquid bulk. 4.3.2. Port of Richards Bay 125. The Dry Bulk terminal handled the most throughput per metre of berth as well as per hectare in the Port of Richards Bay. 36

Port of Richards Bay 45000 42289kl Port of Richards Bay 40000 Dry bulk(mtpa) 35000 311130 30000 Breakbulk(mtpa) 41776 25000 20000 15000 Liquid Bulk(klpa) 24351 10000 5000 2963kl 2720mt 0 50000 100000 150000 200000 250000 300000 350000 annual unit/ ha 0 Dry bulk Liquid Bulk Breakbulk annual unit pa/m berth Figure 18: Terminal productivity in the Port of Richards Bay 126. The terminal accounts for both the most land area (385ha compared to Break Bulk (81ha) and Liquid Bulk (73ha). Breakbulk terminal is more productive in terms of throughput per metre of berth. The productivity of the liquid and breakbulk terminals are similar where throughput per hectare is concerned. 4.3.3. Port of East London 127. Figure 19 shows the most productive terminal by metre of berth in the Port of East London is the Liquid bulk terminal which handled 3 231mtpa per metre of berth. The terminal is also the most productive in the port in relation to throughput per terminal area(ha) with 44 044klpa processed per hectare. 37

3500 3231 Port of East London Port of East London 3000 2500 Liquid Bulk 44044 2000 Dry bulk 35212 1500 1000 Automotiv e 31220 500 0 505 272 191 Liquid Bulk Automotive Dry bulk Breakbulk mtpa/m berth Breakbulk 9375 0 10000 20000 30000 40000 50000 mtpa/ha Figure 19: Terminal productivity in the Port of East London 128. The next productive terminal is the automotive terminal handling 505mtpa per metre of berth. However, the Dry Bulk terminal is the second most productive terminal in terms of throughput per hectare having handled 35 212mtpa per hectare; which is followed closely the automotive terminals 31 2200mtpa per hectare. The break bulk terminal performance per metres of berth is only 191mtpa per metre and slightly higher per hectare, attesting to the low installed and volumes in this terminal. 4.3.4. Port of Ngqurha 129. Figure 20 shows productivity at the Port of Ngqurha defaulting to the container terminal since the Port currently only handles significant volumes of containers. 38

14000 Port of Ngqurha Port of Ngqurha 12000 11892 10000 Container 111168 8000 6000 4000 Breakbulk 16006 2000 253 0 Container Breakbulk 0 20000 40000 60000 80000 100000 120000 mtpa/m berth mtpa/ha Figure 20: Terminal productivity at the Port of Ngqurha 130. As reported earlier, comparing the berth and terminal productivity for the Port of Ngqurha container terminal to that of Durban, Port Elizabeth and Cape Town places the Port of Ngqurha ahead second to Durban on berth productivity and second to the Port of Cape Town on terminal productivity. 4.3.5. Port of Port Elizabeth 131. Terminal productivity as reported in Figure 18 shows the Dry Bulk Terminal in the Port of Port Elizabeth accounting for the highest tons per metre of berth and per terminal area. This is due to Manganese which is moved in the terminal and whose throughput is same as the installed. 39

Port of Port Elizabeth Port of Port Elizabeth 18000 16943 16000 Dry Bulk 338867 14000 12000 Containers 97080 10000 8000 Liquid Bulk 55467 6000 5508 Breakbulk 39589 4000 3667 2000 0 1945 305 Dry bulk Containers Liquid Bulk Automotive Breakbulk mtpa/m berth Automotive 31715 0 100000 200000 300000 400000 mtpa/ha Figure 21: Terminal productivity at the Port of Port Elizabeth 132. The container (5 508mtpa/berth metre) and liquid bulk (3 667mtpa/berth metre) terminals are the next two terminals with high throughput per berth metre and terminal area. Break bulk only handled 305mtpa per berth metre whilst automotive terminals handled 31 715 mtpa per hectare at the bottom end of the productivity rates in this Port. 4.3.6. Port of Cape Town 133. The productivity levels in the Port of Cape Town shows the container terminal performing higher than the other terminal with a throughput of 9 468mtpa per metre of berth. In terms of terminal area, liquid bulk had the highest throughput per hectare, handling 236 900mtpa per hectare. 10000 9468 Port of Cape Town Port of Cape Town 9000 8000 Liquid bulk 236900 7000 6000 5329 Container 157872 5000 4000 3000 Drybulk 92380 2000 1000 1136 328 Breakbulk 20420 0 Containers Liquid Bulk Dry bulk Breakbulk unitpa/m berth 0 50000 100000 150000 200000 250000 mtpa/ha Figure 22: Terminal productivity in the Port of Cape Town 40

134. Breakbulk terminal recorded the lowest throughput per berth metre and per hectare in the Port of Cape Town. 4.3.7. Port of Saldahna 135. The Port of Saldahna handles liquid, dry and break bulk. The reported terminal area for Liquid Bulk is 3.6hectares which translates into a significantly high productivity rate of 8 521 511kilolitres per annum per hectare. Port of Saldahna 50000 Port of Saldahna Liquid Bulk(klpa) 8521522 45000 43692mt 40000 35000 Dry bulk(mtpa) 754136 30000 25000 20000 15000 11835kl Breakbulk(mtpa) 43690 10000 0 2000000 4000000 6000000 8000000 10000000 5000 0 1000mt Breakbulk Liquid Bulk Dry bulk unitpa/ha unitpa/m berth Figure 23: Terminal productivity at the Port of Saldahna 136. However, productivity measured at throughput per berth metre, shows the dry bulk terminal to be more productive. 43 672mt per annum per berth metres are handled. The berth area for liquid bulk in the Port of Saldahna is given as only 500 metres which accounts for the significantly high throughput per berth metre. Dry bulk (which handles mainly iron ore and manganese ore) accounts for the highest throughput per hectare in the Port of Saldahna. Very limited break bulk cargo is handled at the Port of Saldahna with the terminal accounting for low productivity per metre of berth and terminal area. 41

5. Summary 137. Table 14 below provides a snap shot on the status quo of the levels of utilisation of South African terminals per commodity type and per port. It summarises current port terminal use using reported NPAs 2013/14 throughput per terminal in relation to design and then installed in the terminal. Full is defined as a terminal operating at 100% of design or installed. 138. The table also summarises terminal performance in terms of throughput per metre of berth and per terminal area for each of the commodity types as reported. Averages were determined for each of the commodity types and that average is used to indicate if the reported performance of a terminal is within the average of all terminals handling the same cargo types. For container and Ro-ros, the table also reflects performance against design and installed. 42

Table 14: Summary of terminal use by cargo type and port Richards Bay Durban East London Port Elizabeth Ngqurha Throughput in relation to design : compared against of 100% Containers N/A Close to (88%) (44%) (49%) (25%) Ro-Ro N/A Close to (96%) Dry Bulk Break Bulk Liquid Bulk Port level summary analysis (67%) (34%) (56%) Close to (95%) Close to (87%) Above (128%) Close to and above (43%) (11%) (56%) (28%) (67%) Above (122%) (27%) (30%) Mainly below Mossel Bay N/A Cape Town (61%) Saldahna N/A N/A N/A N/A N/A N/A N/A (31%) (3%) N/A Significan tly below Capacity Throughput in relation to installed : compared to of 100% Containers N/A Close to (88%) Close to (77%) Close to (90%) Above (145%) *** Ro-Ro N/A Above (104%) Dry Bulk Break Bulk Liquid Bulk Port level summary analysis Close to (83%) (47%) Above (176%) Mainly close to and above Close to (95%) Close to (87%) Above (244%) Mainly close to and above Close to (83%) (22%) Above (3 028%) Close to (91%) Mainly close to and above Throughput per berth metre: compared against average Containers (Ave: 818) N/A Above ave (1 032) N/A Ro-Ro N/A Above ave ave (Ave:309) (436) (101) Dry Bulk Above ave ave ave (Ave:18 490) (42289) (6 606) (272) At (100%) Above (137%) Close to (78%) Close to (91%) Mainly close to and above ave (459) Above (109%) (27%) Breakbu lk above, Liquid Bulk below N/A (4%) Close to (77%) Mainly At (101%) Close to (95%) (26%) (17%) Mainly below N/A N/A N/A N/A N/A N/A N/A (46%) N/A N/A Above Above Ave (991) Above (192%) Above (112%) Above for two of four berths N/A (11%) Close to (77%) Mainly below Ave (789) Above (109%) (51%) (61%) Mainly and above on Dry bulk Above ave (389) N/A N/A N/A N/A ave N/A N/A Ave Above ave (16 943) ( 1 136) (43 692) Break Bulk Above ave Above ave ave ave Ave Ave (Ave:1 073) ( 2 720) (3 973) (191) (305) (253) Ave (328) Average (16 018) (1000) Liquid Bulk Above ave Above Above Above ave N/A N/A** Above ave Above ave N/A

(Ave:2 038) (2 963) ave* (15 179) Port level Above Mainly summary average Above analysis average Ave (3 231) average Mainly average (3 667) (5 329) (2 038) Average average Mainly Average Mainly above Average Throughput per berth metre compared against design and installed : Containers (Reported figures based on 2013/14 throughput) Design N/A (1032) 1 N/A (459) 945 (991) N/A (789) 1 N/A 171 3 889 303 Installed N/A (1032) 1 N/A (459) 512 (991) 683 N/A (789) 782 N/A 171 Port level N/A Terminal N/A Terminal Terminal N/A Terminal N/A summary analysis (reported throughput vs design and installed ) operating at full operating close to installed and at half of design operating above installed but significant ly below design operating above installed with some design still available Throughput per berth metre compared against design and installed : Ro-ro( reported figures based on 2013/14 throughput ) Design N/A (436)453 (101)233 (389) 585 N/A N/A N/A N/A Installed N/A 418 121 391 N/A N/A N/A N/A Port level summary analysis N/A N/A N/A N/A N/A Terminal operating at design and installed Terminal operating close to installed but below design Terminal operating close to installed but significantly below design Throughput per terminal area compared against average Containers (Ave: 11 222) N/A Above ave ( 14 379) N/A Ro-Ro N/A Above ave ave (Ave: 8 481) (12 858) (6 244) Dry Bulk Above ave ave ave (Ave: (311 130) (177 017) (35 212) 284 790) Break Bulk ( Ave: 22 067) Liquid Bulk (Ave: 84 509) Port level summary analysis Above ave (41 776) ave (24 351 Mainly Above Average Above Ave (42 727) Above Ave* (170 643) Mainly Above average ave (9 375) ave (44 044) average ave (8 090) ave ( 6 343) Above ave (338 867) Above ave (39 589) Above ave (55 467) Mainly Above Average ave N/A Above ave N/A (9 264) (13 156) N/A N/A N/A N/A ave (16 006) average N/A N/A Ave (92 380) ave (16 018) ave (20 420) N/A N/A** Above ave (236 900) average Average Above Ave (754 136) Above ave (43 690) Above ave (8 521 522) Above average * Some of the Liquid Bulk is handled at the off-shore mooring at Isipingo and is thus not included in the throughput per berth or per hectare. **Liquid bulk at the Port of Mossel Bay is handled at the Single Buoy Mooring (SBM) off shore thus no figures are given for berth and hectare. *** this is against installed of two berths out of four. 44

139. This is only a snap shot and as previously indicated; the next iteration will look at trends based on historical throughput and demand projections to enable some conclusions to be drawn on the need for expansion, both in terms of infrastructure and installed. The snap shot is only indicative based on information assessed. 140. The Port of Richards Bay is operating below installed in general, and its operations are close to and above with regards installed. This indicates that overall there is that can be made available in the system by addressing matters relating to installed. It s overall performance in terms of throughput per metre of berth and per hectare for all the cargo types suggests above average performance in the system. 141. The Port of Durban numbers suggests that the port is operating close to and above design in all its terminals in relation to both design and installed pointing to limited scope for more to be handled with current. The recorded performance of the terminals in terms of throughput per metre of berth and terminal area points to terminal performance above average in the system. 142. The Port of East London figures show that it is operating below in terms of design. The numbers for installed has the port operating mainly close to and above highlighting that additional can be accessed by addressing installed. This is supported by below average performance in the port s throughput per metre berth and per terminal area. Besides installed, market factors may also account for the performance of the Port of East London which services a hinterland with lower economic performance. 143. In the same region, the Port of Port Elizabeth comes through as operating mainly below design of its terminals but close to and above installed (dry bulk terminal) with below average performance in both throughput per metre of berth and terminal area. Overall, this suggests scope for improvement in installed and operational performance. The dynamic created by the proximity of the Port of Port Elizabeth to the Port of Nqgurha must also be taken into account. 144. The Port of Ngqurha itself is shown to be operating significantly below installed whereas the levels of installed suggests above operations. This point to the fact that installed is not maximizing design in this port, highlighting that more can be achieved by addressing installed. The Port of Ngqurha performed on average in terms of throughput per metre of berth and below average on throughput per terminal area. The above performance against installed must be seen in the context of installed of two berths. 45

145. The Port of Mossel Bay s terminal operations in relation to design is below for liquid bulk the main cargo type handled at this port and above for breakbulk. Its operations are above average in relation to installed again suggesting more throughput can be handled by increasing installed. On both throughput per metre of berth and terminal area, the port has performed below the averages. 146. The Port of Cape Town operations are mainly below design and close to for liquid bulk whilst, in relation to installed the terminals are operating mainly below. With mainly below average and average performance on throughput per metre of berth and terminal area respectively, the Port of Cape Town improving operations and installed can provide more. 147. Lastly, the Port of Saldahna s terminal operations in relation to design and installed is mainly below, except for dry bulk terminal where operation are above installed. The terminals are also performing above the system averages. 6. Way forward 148. In the introduction of the review, it has been established that various approaches can be followed to determine optimal performance standards against which the terminal performance can be assessed. This includes the Stochastic Frontier Analysis approach, Data Envelopment Analysis approach, Benchmarking against international ports etc. This requires much expertise as well as data and has not been used in this initial study. In addition, efficiencies and utilisation can also be weighed against investment and availability of capital in analysis such as financial and economic NPV, internal rates of return, payback analysis, economic value add and many others. At most, the analysis presented in this document serves to paint a picture of some of the PRSAs observations within the limitation of the data and expertise available. 149. Another approach, which is presented below, is to use the UNCTAD berth utilisation factor to determine whether South African terminals are operating optimally. It is proposed that the NPA be engaged further on this approach, as outlined below. 150. In determining optimal performance standards; berth and terminal utilisation rates as well as across the ship rates must be calculated using the UNCTAD international norms. Berths and terminals are the point of interface amongst various players in the port systems, primarily exchange between vessels and cargo. Terminal and berth utilisation rates i.e. the time available to vessels to exchange cargo across the quay wall and the rate at which that 46

exchange happens are key indicators of how well a port or terminal is doing. The following are the formulae and input parametres used in calculating optimal berth utilisation and ATS for South African terminals: 151. Operational hours, number of berths per terminal as well as throughput per terminal are required to calculate both berth utilisation and across the ship rates. Operating hours: Ports: Durban, Richards Bay, Ngqurha, Port Elizabeth, Cape Town, Saldahna East London No of. Operating hours As per tariff book 365 days * 24hrs = 8760 16hrs * 5 days a week: 60 * 52 = 4160 plus 6hrs on Saturdays: 8*52 = 416 Total hrs: 4576 Mossel Bay 12hrs * 5days a week: 60*52= 3120 Total hrs: 3120 Usable berths: 152. Usable Berths instead of total berths would be used. The intention is to determine the utilisation of operational rather than design. However as has been done in the report, the same calculations can be done to determine productivity level of the full infrastructure that port users are paying for. 153. The terminal utilisation rate describes the ideal number of hours that all the berths, collectively; in a terminal should be operating cargo. This can be used as a standard by which South African terminal s actual utilisation should be compared to. 154. Berth Utilisation calculates an optimum utilization rate of a terminal (in hours) based on the number of berths (as per utilisation factor) and number of terminal operational hours i.e. the number of hours that the terminal should be operational per annum. Berth/terminal utilisation factor 155. The Berth Utilisation Factor attempts to standardize across various factors that influence operations in a berth to arrive at a commonly agreed figure that a berth must operate in a year. The Berth Utilisation factors are based on those set by the United Nations Conference on Trade and Development (UNCTAD:1986) in the port performance measurement manual. Although determined in the 1980s, these factors have not required material adjustments over the years, except for upward revisions on container terminal factors. Berth utilisation factors used in the calculations are provided in Table 15. 47

Table 15: Berth Utilisation Factor Number of berths Vehicles (%) Liquid Bulk(%) Containers (%) Dry Bulk(%) Break Bulk(%) 1 45 45 45 70 45 2 50 50 50 70 50 3 55 55 55 70 55 4 60 60 60 70 60 5 65 65 65 70 65 6 70 70 70 70 70 7 70 70 70 70 70 UNCTAD: where there are more than 7 berths, the factor remains 70%. 156. These represents the percentage of time that a berth or number of berths when available will allow optimal use thereof without congestion or low service. The highest utilisation factor is 70%. This is however not the maximum but rather the optimal utilization for a terminal with x number of berths. Where actual utilisation is above the utilisation factor, the likelihood of congestion is high, pointing to a need for either operational improvements or additional. Formulae for calculations: a. Terminal Utilisation rate (%) = Operational hrs x no. of berths x utilisation factor (UNCTAD utilisation factors in table above) b. Berth Utilisation rate (%) Terminal Utilisation rate Number of berths c. Across the ship rate (ATS) = Throughput Terminal Utilisation 157. As an example, using the 2013/14 cargo throughputs gives the following indicative utilisation rates: 48

Table 16: Example of possible optimal berth utilisation and ATS for SA terminals Containers Automotive Dry Bulk Break bulk Liquid Bulk Ship rate (ATS) Berth Utilisation (hrs) Ship rate (ATS) Berth Utilisation (hrs) Ship rate (ATS) Berth Utilisation (hrs) Ship rate (ATS) Berth Utilisation (hrs) Ship rate (ATS) Berth Utilisation (hrs) Richards Bay Coal n/a n/a n/a n/a 2368 36 792 n/a n/a n/a n/a Richards Bay n/a n/a n/a n/a 0 36 792 92 36 792 203 8 760 Durban 62 42 924 35 14 454 243 42 924 40 85 848 546 49 056 East London 9 4 576 27 2 059 n/a n/a 20 4 576 406 2 059 Port Elizabeth 33 8 760 30 4 380 995 6132 16 19 272 184 4 818 Ngqurha 81 8 760 n/a n/a n/a n/a 20 3 942 n/a n/a Mossel Bay n/a n/a n/a n/a n/a n/a 41 1 404 679 3 120 Cape Town 37 24 528 n/a n/a 53 12 264 12 36 792 297 8 760 Saldahna n/a n/a n/a n/a 4489 12 264 47 18 396 1081 3 942 158. According to these calculations for Durban container terminals as an example, the optimal berth utilisation rate for this 7 berth, 8760 hrs terminal must be 42 924hrs in a year. Across the ship working rate, is 62 TEU per hr, which can be verified by simply multiplying the calculated optimal ATS and Berth Utilisation to find the Annual throughput 42 924 x 62 = 2 660 144. However, actual performance must be assessed when actual terminal availability in hours and actual ship working rates are computed. 159. Table 15 therefore provides an indication of the optimal levels or standard for ATS and Berth Utilisation rates as per the UNCTAD model which should be compared to the actual ATS and Berth Utilisation for South African terminals as reported by the NPA. 7. Conclusion 160. This review reports on the infrastructure the NPA provides to service the various cargo types handled in South African ports. The report provides a birds eye-view on the utilisation of infrastructure in the various terminals, identifies using various measures, infrastructure that may be close to full, and points towards prioritisation of infrastructure needs in the NPA CAPEX programme. The study forms a baseline which will lay a foundation for the next phase of the Regulator s Review which will gradually improve CAPEX analysis capability on behalf of port users. 49

8. Bibliography 1. Bichou K & Gray R. 2004. A logistics and supply chain management approach to port performance measurement. Maritime Policy Management Journal. Vol. 31, No.1. 47-67. Taylor & Francis. 2. Chung, C.K. (1993) Port Performance Indicators, Transportation, water, and urban development department, The World Bank. 3. Container Ports Fact Book: Antwerp, Zeebruggee, Rotterdam, Bremen and Hamburg. Development and realisation of growth. Adstrat Consulting, 2012. 4. Kevin Cullinane 2010? Revisiting the productivity and efficiency of ports and terminals: methods and applications. Transport Research Institute, Edinburgh Napier University. 5. Kevin Cullinane, Rickard Bergqvist and Gordon Wilmsmeier (2012). The dry port concept theory and practice. Maritime Economics & Logistics (2012) 14, 1 13 (http://www.palgravejournals.com/mel/journal/v14/n1/full/mel201114a.html) 6. Merk, O., Li, J. (2013), The Competitiveness of Global Port-Cities: the case of Hong Kong China, OECD Regional Development Working Papers, 2013/16, OECD Publishing, http://dx.doi.org/10.1787/5k3wdkjtzp0w-en 7. Pjevcevic, D; I. Vladisavljevic & K. Vukodinovic (2013) Analysing the efficiency of dry bulk cargo handling at the inland port terminal using simulation and DEA. A paper presented at the 1 st Logistics International Conference, Belgrade. November 2013. 8. Port benchmarking for assessing Hong Kong s Maritime services and associated costs with other major international ports. Marine Department Planning, Development and Port Security Branch, December 2006. 9. Salminen, J.B., 2013. Measuring the Capacity of a port system: a case study on a Southeast Asian Port. Dissertation in partial fulfillment of the requirements for the Degree of Master of Engineering Logistics, Massechusetts Institute of Technology. 10. Sarriera J.M., T. Serebrisky, G. Araya, C. Briceno- Garmendia and J. Schwartz. Benchmarking container terminal efficiency in Latin American and the Carribean. Inter-American Development Bank (IDB) Working Paper Series no. IDB-WP-474. 11. Talley, W.K. (2008) Container Port Efficiency and output measures. 12. The DBSA & DPME, 2012. The State of South Africa s Economic Infrastructure: Opportunities and Challenges 2012. A publication of the Department of Performance, Monitoring and Evaluation at the Presidency and the Development Bank of Southern Africa. 13. The National Ports Act, Act 12 of 2005. 14. The National Ports Authority (NPA), 2013. Long Term Port Development Framework. 15. The Tioga Group (2010). Improving Marine container terminal productivity: development of productivity measures, proposed sources of data and initial collection of data from proposed sources. A report prepared for the Cargo Handling Co-operative Program. 50

16. UNCTAD 1986 Manual on a uniform system of port statistics and performance indicators www.portsregulator.org 51