Claims that port costs in South Africa are too high have been given due consideration, Transnet National Ports Authority (TNPA) has told an online media briefing about its operating model.
However, seen against a bigger background of overall freight costs, geostrategic location in relation to imports and exports, and what the parastatal claims to be the efficient rendering of services, TNPA said it believed its price structuring to be fair.
The Authority’s managing director for the eastern region of East London and Gqeberha, Siyabulele Mhlaluka, said: “In South Africa we have been under serious criticism around port costs.”
He explained that TNPA looked at pricing from a local perspective and, comparatively speaking, assessed how to keep costs down against a wide spectrum of the entire logistics chain and all related services and functions.
“Our response is how do we ensure that we reduce the overall cost of logistics by partnering with various logistics partners?”
He added: “Our contribution to that relates not only to the issue around price, but the issue around efficiencies and our contribution, largely, has been that of ensuring that we reduce the cost of having services within our port system.”
It included sorting out issues around efficiencies and tender oversight, Mhlaluka said.
Moreover, he emphasised that it was TNPA’s view that the country’s ports were so well run that it negated complaints of excessive cost.
“Our operating activities, whether they are undertaken by us to marine services or by our internal operators, are so efficient that the cost of coming to South Africa comes down.”
Mentioning Transnet Port Terminals “and other terminal operators”, Mhlaluka said efficient service delivery meant price had become “an important fact”.
This was because part of TNPA’s operating model was to ensure that its cost of doing business was reduced by ensuring that its cost structure was compressed so that savings could be transferred to its clients, he said.
"It should be borne in mind that costs are transparent seeing as it’s scrutinised by the Ports Regulator of SA," he added.
Although TNPA views port costs as a reflection of prompt and professional service delivery, thereby enabling savings elsewhere along the supply chain, Mhlaluka said efforts were under way to involve various industry entities to assist Transnet with price structuring.
This included involvement by the Automotive Business Council, looking at costs around automotive exports, and the University of Stellenbosch, conducting research into the impact of broad-based freight charges, he said.