Maritime Archives

The Durban Chamber of Commerce hosted a presentation by the developer responsible for the long awaited Cato Ridge intermodal hub. The Cato Ridge development includes a truck and rail staging area; office, industrial and warehouse space; a tank farm and a host of community services including an FET college.

The rationale for the Cato Ridge development is that it will alleviate pressure at the port of Durban and provide a more efficient route for cargo owners. Members of the audience (which was largely made up of freight forwarders and hauliers) questioned whether either of these rationale are valid. The audience felt that facilities 50km away from the port would not alleviate port pressures because the main cause of the pressure is inefficiency at the Durban container terminal once the truck arrives at its designated time. The audience further felt that this route would not be more efficient or more cost effective for cargo owners via truck or rail. Finally, the environmental approvals have not yet been achieved – a major stopping point in the past.

Unfortunately, the developer does not know himself if the rationale is valid because he has not yet tested it with the market. It seems the developer is relying heavily on Transnet who have already signed off the rail staging area and possibly the tank farm. It is typical of Transnet to only test plans with the market once they have been decided but one wonders how the developer has gotten to this point without understanding his potential customers.

The meeting wasn’t all objections and confusion as the audience perked up towards the end and started to offer some suggestions on how this hub could be successful. One suggestion that gained support among the audience was that the hub is treated as an extension of the port boundaries and included within the port fees already charged.

The developer has some high hoops to jump through to win over both industry and the environmentalists, and that journey has only just begun, but he was not daunted by the strong views of the audience and is very determined to make this project work. Despite this, my feeling is we will be waiting a good few more years before we see a spade in the ground at Cato Ridge.

Not incorporating strategic plans as deliverables across the organisation;
Not including relevant stakeholders in the development of the strategy;
Too much of a focus on infrastructure over soft issues;
Not getting buy-in from related government departments; and
Not being flexible enough in planning scenarios.

…are the five most frequent strategy errors made by ports across the globe, according to Port Economics associates, Peter de Langen and Jonas Mendes.

South Africa’s port strategy is the responsibility of state owned entity, Transnet, and its port division, the National Ports Authority (NPA). The National Development Strategy is conducted every five years and results in the Port Development Plan (PDP), which is completed annually and has a planning horizon of 30 years. From my experience working with the NPA on their strategy in 2012/13, the common mistakes identified by de Langen and Mendes resonate with me to varying degrees.

The two most important mistakes made by Transnet and the NPA is using the strategy purely as an infrastructure development tool and excluding vital stakeholders from the process. The NPA is in the business of building port infrastructure, therefore, while all outcomes of the strategy were not infrastructure related, only those that were infrastructure related were able to be reflected in the Port Development Plan. The Port Development Plan is a set of maps and an investment plan. All other suggestions around policy and the environment fall away, not through prioritisation, but by the nature of the planning outcome, which is an engineering outcome. I believe that there are effective tools and measures in place in Transnet’s head office to incorporate environmental outcomes into deliverables but the two processes never meet in the strategic phase, which brings me to the next failure – that of not including vital stakeholders in the process.

No external stakeholders were included in the strategic development of the PDP, until the plan was completed and a roadshow was conducted. There is little accountability with regard to how the comments received from roadshows are included in the plans. Perhaps worse, was the lack of internal engagement on the strategy. Final plans were presented to the executive committee of NPA and then Transnet without buy-in being created as the executive was not included in the development of those plans. This leads to lack of implementation and duplication of efforts. The same can be said for Transnet’s plans being made in isolation of the NPA. The entity is not good at consultation, internally or externally.

Despite these mistakes, South Africa can be proud that it does not always fall into the trap of inflexible planning. The demand forecasting techniques developed by Transnet do include an enormous amount of flexibility and do account for external factors. Transnet’s project factory also verifies demand on a project by project basis. Furthermore, Transnet and its port division, NPA, have been able to attract and retain excellent staff who are committed and experienced. With the correct engagement processes, better internal synergies and tools for creating non-engineering deliverables, the National Development Strategy could be substantially improved.

Read the full article from Port Economics here.

Cato Ridge Intermodal Hub – to be or not to be?

The Top 5 Strategy Errors Made By Ports