Businesses across the value chain have been affected by Transnet’s incapability to run the port efficiently and meet the rising demand. Piture: Picture Leon Lestrade/ Independent Newspapers
Stakeholders in the public and private sector have expressed concerns about the ongoing issues surrounding the functionality at the Port of Durban, with specific focus on its effect on the automotive industry.
The Port of Durban, the largest in Sub-Saharan Africa, is experiencing prolonged delays, leading to ships being stuck out at sea due to congestion.
This week, Minister of Trade, Industry and Competition, Ebrahim Patel, said the country’s logistics issues needed to be solved urgently as it directly impacts the automotive manufacturing sector, according to Bloomberg.
"We do need to solve the energy and transport logistic issues absolutely urgently. The producing side requires transport logistics.
"When components are stuck in a port, then they undermine the ability to cost-effectively produce vehicles. And then, of course, the finished cars should not be sitting in factory warehouses. They’ve got to get to the market,” Patel was quoted saying in Bloomberg.
Meanwhile, the Automotive Business Council, Naamsa, said the incapacitated port and freight rail network is negatively impacting the country’s vehicle product landscape and on new vehicle sales.
Naamsa chief executive Mike Mabasa said there’s been a fourth consecutive monthly decline in new vehicle sales, attributed to the return of the Stage 6 load shedding and supply chain disruptions at Transnet.
The country’s automotive industry contributes just under 5% to the national GDP.
“November 2023 vehicles market declined by 9.8% and recorded 45,075 registrations compared to the 49,986 vehicle registrations recorded in November 2022.
“Overall, out of the total reported Industry sales of 45,075 vehicles, an estimated 38,224 units or 84.8% represented dealer sales, an estimated 9.5% represented sales to the vehicle rental Industry, 3.1% to government and 2.6% to industry corporate fleets,” Mabasa said.
November 2023 saw a 12.1% decline in sales as compared to the year prior.
Last year, the export of vehicles and automotive components reached a record amount of just over R227 billion, equating to 12.4% of South Africa’s total exports, Naamsa said.
The automotive sector accounts for around 21.7% of the country’s total manufacturing output and those vehicles are exported to over 150 foreign countries.
Meanwhile, President Cyril Ramaphosa said last month that he was aware of the issues plaguing the Durban Port, but that Transnet was working on resolving them through a variety of expansion projects.
“Over the years, a number of inefficiencies have led to the Port of Durban losing its international ranking.
“Despite the significant challenges Transnet has been facing, there has been some progress and movement, and this infrastructure project is one such example,” Ramaphosa said at the opening of the Nelson Mandela Cruise Terminal in Durban.
IOL