Nelson Mandela Bay’s position as the hub of the South African automotive industry was further entrenched last week with the opening of a R500m extension to auto components manufacturer Benteler’s facility and announcement of a R3bn vehicle manufacturing plant planned by global automaker Stellantis for the Coega SEZ.
These developments are very welcome in terms of investment and much-needed job creation, and an encouraging signal of business confidence in our region — particularly as they have come despite a weak enabling environment.
An efficient supporting logistics network is, if not the missing link, certainly a weak link hampering our enabling environment, stifling the ability of local industry to grow and limiting Nelson Mandela Bay’s economic potential.
With two ports and an advantageous location for trade and transport interconnectivity, Nelson Mandela Bay is wellpositioned to be not only the hub of the automotive industry but an import-export and logistics hub. Almost half servicing’global of SAs 200 auto and continental trade in diverse raw materials and products. component manufacturers and suppliers are located in Nelson Mandela Bay, and more than half of fully built-up vehicles exported annually are manufactured in the Eastern Cape.
We are a global centre for production, processing and export of citrus, wool and mohair.
One of the world’s biggest manufacturers of tank containers and bulk liquid shipping containers, servicing not local but global customers, is located here.
And we have a thriving logistics business sector, ready to grow, create more employment and service the needs of manufacturers, farmers, importers and exporters.
This potential is drastically limited, however, by our ports being plagued by inefficiencies, equipment failures and poor productivity causing delays and lengthening shipping turnaround times, along with the collapse of the rail network.
South African ports are ranked among the least productive in the world, with already-high costs of berthing and handling made more expensive by delays in docking and loading/offloading.
Congestion at the ports of Durban and Cape Town should represent an opportunity for the ports of Port Elizabeth and Ngqura to be viable alternatives, but we equally have operational problems and dysfunctional port-rail linkages for cargo to move between ports and to and from inland centres.
The result is many shipping lines are now skipping South African ports altogether, making it difficult for importers to get goods into the country and causing exporters delays in meeting overseas customer orders and ultimately losing out to more productive and reliable countries, with resulting job losses and limited potential for new investment here.
Additionally, transport and logistics role players in the Bay have raised grave concerns with Transnet on its plans to implement a new booking system one that is already not working in Durban and Cape Town and has impacted even further on congestion and delays there, and increased costs to business.
The link from ports to rail is critical materials and goods landed here need to be moved to other manufacturing and commercial hubs; raw materials need to be moved to the coast for export; finished goods, vehicles built in Tshwane for example, need to be moved to a port for export.
Rail, when it is working as it should, is just more efficient than road transport which is congested, heavier on fuel and emissions, and our roads are not designed to carry heavy trucking at the scale they are currently bearing.
The north-south rail corridor to move cargo between our ports and Gauteng needs to become fully functional, and we believe it is imperative that Transnet explore full outsourcing of this route at the same level as is proposed for the Durban-Joburg corridor, rather than a half-hearted, semi-privatised and unintegrated approach currently on the table.
Transnet should be prioritising improving the capabilities of the Nelson Mandela Bay ports at least at the same level as the attention paid to Durban.
There is untapped opportunity to leverage this city’s advantage of strategic location and two, arguably underutilised, ports, to the benefit of the entire country’s logistics and trade.
If new investments can be secured despite the challenges of the current operating environment, imagine the opportunities that could be unlocked if all stakeholders work together with common purpose to have an enabling logistics network fully in place.