Cape Town - What, I wonder, were those union leaders thinking when they called the Transnet strike?
Perhaps a more pertinent question is whether they were thinking at all. The country cannot afford a strike in the most important sector in the economy – transport, and particularly in the harbours through which passes over 90 percent of South African trade.
Reflecting on the already inefficient ports and rail system, Roger Baxter, CEO of Minerals Council SA, claims that the country has lost around R50 billion in bulk exports, such as coal, iron ore and manganese, this year alone. Kumba iron ore mining house announced that disruptions to Transnet’s rail and port services could impact exports by about 120 000 tons per day.
Those are staggering figures, and of course, the lamentable losses of business have a direct bearing on foreign exchange earnings, profits of mining houses (and on the taxes that they pay), as well as affecting many peripheral service providers and on the all-important job market.
Strike action in the ports has exacerbated the problem, with 28 ships – containerships, bulkers and tankers - queuing for berths outside Durban harbour and the same number – mostly bulk carriers - in the Richards Bay anchorage.
Although there has been no abnormal build-up of ore carriers anchored in St Helena Bay waiting to load at Saldanha Bay, several ships are said to be slow-steaming to the west coast port, hoping that strike action and any backlogs will have been cleared by the time they arrive.
A few years ago, a strike at the Durban car terminal caused car manufacturers to seek another export port for their vehicles. Maputo, closer to the factory, took a large number of vehicles, a situation that continued after the strike had ended. Maputo benefited to the detriment of Durban. Similar examples can be found all over the world where strike-bound ports are ditched by shipping lines or shippers who, angry at the delays and the costs they incur, take their business elsewhere. Jobs are lost in the process, and it takes years to regain the lost ground – if at all.
Demurrage – the additional costs that are paid when cargo work is delayed beyond the agreed time – is added to ships’ daily hire rates, mounting up to thousands of dollars per day of delay.
You and I, dear reader, pay for these additional costs in price increases in our local supermarkets and at the petrol pump. In addition, we pay higher prices for fuel that is imported over longer distances than necessary. Unless overriding considerations regarding the quality or grade of crude oil and refined fuels dictate otherwise, all of these commodities should be imported from west Africa.
It is shocking that we need to import refined products following the curious closure of or lengthy repairs to existing refineries. Eskom’s demand for diesel has accentuated the problem that has seen three tankers in Cape Town and another three awaiting berths. But why are these cargoes brought from the Arabian Gulf when – from west African refineries – Durban is four to eight days shorter voyage time for tankers?
The country urgently needs another working refinery. With its open land and existing deep water tanker terminal, Saldanha is the ideal place for that refinery.
Ironically, the Transnet strike and its associated impact on harbour operations coincide with a three-day international maritime conference that began in Durban yesterday. The official opening happens today, with umpteen delegates being welcomed by the visionless minister of transport. On his watch, the railway system finally collapsed, while his watch has yielded absolutely nothing for the maritime industry that is so vital to the country’s economy.
The conference will focus on four themes of international maritime interest, including the inevitable green topics and the blue economy. However, perhaps one day, we shall see a conference at which scientists and economists will highlight the real environmental and financial impact of the thousands of wind turbines that are being manufactured, transported over thousands of nautical miles from China and elsewhere to many destinations, installed and maintained, processes for which specialised ships need to be built or existing ships modified.
Perhaps a future conference programme will announce speakers who will provide the true financial costs and impact on employment of not prospecting for oil and gas off our coast, prohibited by that court ruling earlier this year. Forbidden from finding our own reserves of oil and gas, we shall continue to be exploited by OPEC and its associates who, as they recently demonstrated, hike the oil price at will.
And perhaps one day, we shall see a press release – we don’t need a conference for this one – that a cabotage system will be phased in for the shipment of all coastwise cargo, for the export of certain percentages of some minerals, and for oil imports.
And hopefully - dare I repeat it – another future press release may announce the construction of a large drydock in Cape Town.
Ingpen is a freelance journalist and the author of 10 maritime books.
Cape Times