FREIGHT & TRADING WEEKLY

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wood for the trees,” he said, adding that it was illegal to implement a mandatory booking system.

“They wanted to penalise transporters for no-shows but how can they when they don’t have sufficient equipment to discharge cargo? Sure, charge me R1 000 for not meeting my slot but I’ll charge you R1 000 for keeping me waiting,” Martin commented.

He added that the establishment of a working group had been welcomed and that discussions were ongoing. “There now seems to be an understanding that there won’t be a go-live until consensus has been reached.”

Martin said transporters at the port expected a maximum turnaround time of six

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“Adele Mackenzie

The mandatory container appointment system (MCAS) roll-out at the Durban Container Terminal – set to go live on April 1 or June 1 (depending on whom you talk to) – has been replaced by a non-mandatory truck appointment system (TAS).

The latter is now set for a pilot project go-live on August

1, followed by implementation on November 1 this year.

Jabulani Dube, Transnet Port Terminals (TPT) general manager: KwaZulu Natal operations, explained that the new system and new roll-out dates followed “engagement with the transport and maritime industry”.

He gave the initial go-live date for the (MCAS) as June 1. However, FTW reported

TPT regional manager, Thula Dlamini, as saying at a stakeholder meeting in February that it would be April 1. This was confirmed to FTW last week by local transporter and member of the Durban Harbour Carriers’ Association, Kevin Martin.

He said the initial MCAS system, “widely announced with great fanfare to the media”, has been planned

without any consultation with port users. According to Martin, a working group of TPT and industry representatives was then formed to ensure consensus on the targets and operations around the new TAS.

“The initial system was a complete waste of time and didn’t take the needs of the industry into account at all. It’s like they couldn’t see the

New dates set for roll-out of port booking system

The Department of Transport’s new Road Freight Strategy – unveiled by Minister of Transport, Joe Maswanganyi, and approved by Cabinet last week – highlights an “urgent need” for an operator registration system that would assist in curbing problems such as unlicensed and unroadworthy vehicles.

According to a spokesperson for the Department of Transport, the system will further assist in the collation of freight data, planning and

regulation of the sector.Full details of the strategy,

along with an implementation date, have yet to be confirmed.

Transport economist Andrew Marsay told FTW this was a “positive development”, adding however that it tended to focus more on managing the “negative externalities” of road freight – accidents, pollution, road damage etc – rather than on the positive externalities such as the facilitation of business and the flexibility of response to market needs.

Cabinet approves road freight strategy

To page 12

2 | FRIDAY June 2 2017

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Mineral Resources Protection in AfricaOn 17 to 19 May The World Customs Organisation (WCO) held a workshop on the protection of national mineral resources in Lusaka, Zambia which was attended by officers from customs administrations and mining control institutions from the Democratic Republic of the Congo, Nigeria, South Africa, Tanzania, Zambia and Zimbabwe.

The participants concluded that optimal monitoring and control mechanisms of the natural resources should be developed, which included the identification of legislative gaps, exploring the strengthening of current controls, improving cooperation and networking between customs administrations and mining institutions.

Global Exporter Passport ProgrammeThe Department of Trade and Industry (the dti) is inviting

all exporters to apply for its Exporter Development Training Programme. The purpose of the training is to prepare small and medium enterprises for the successful expansion of their businesses into international markets.

Interested companies are required to complete and submit the export-readiness assessment form, which will help determine the appropriate level of training for each company.

The training is clustered in four phases, namely: Phase 1: Introduction to exporting, Phase 2: Planning for exports, Phase 3: Market entry, and Phase 4: Global exporting.

Australia eliminates farm export subsidiesOn 22 May Australia became the first World Trade Organisation (WTO) member among the 16 members with export subsidies entitlements to eliminate them from its WTO schedule of commitments, in line with the landmark

2015 commitment by WTO members to eliminate farm export subsidies.

At the 2015 Nairobi Ministerial Conference, WTO members agreed to abolish agricultural export subsidies and set disciplines on export measures with equivalent effect, levelling the playing field for farmers around the world. By eliminating export subsidies, WTO members have made a collective and historic contribution to delivering on a key target of the United Nations (UN) Sustainable Development Goal to end all forms of hunger and malnutrition.

Australia’s modified schedule was effective from 22 May.

Safeguard Iron and Alloy AlertYou will recall from an earlier column that on 27 April the WTO notified members of South Africa’s intention to impose safeguard duties on certain flat-rolled products of iron and alloy, classifiable

under tariff subheadings 7208.10, 7208.25, 7208.26, 7208.27, 7208.36, 7208.37, 7208.38, 7208.39, 7208.40, 7208.51, 7208.52, 7208.53, 7208.54, 7208.90, 7211.14, 7211.19, 7225.30, 7225.40, 7225.99, 7226.91 and 7226.99.

This follows South Africa’s earlier notification to the WTO Committee on Safeguards on 23 February 2016, and the International Trade Administration Commission of South Africa (Itac) preliminary determination of 22 July 2016.

ArcelorMittal South Africa (AMSA) are, according to reports, expecting the imposition of safeguard duties to come into effect on 01 July 2017.

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An increase in smuggling and transit fraud is raising alarm bells at Beitbridge border post.

An official from the Zimbabwe Revenue Authority (Zimra) told FTW off the record that there had been an increase in the number of incidents – although no official comment was available.

Zimra did however release a statement last week pointing out that the revenue authority had commissioned a US$2.1- million Electronic Cargo Tracking System (ECTS) in an effort to curb transit fraud.

“Border posts are now equipped with detectors, mobile scanners, luggage scanners and closed circuit television (CCTV) cameras,” the Zimra official added.

A transporter told FTW that there were three different checkpoints where all vehicles were stopped and inspected by Customs officials and

traffic police. “There’s one in Musina, one just outside the border post, and a third at the weighbridge before crossing to the Zimbabwean side.” He said that if there was smuggling it would be managed through a syndicate that used boats to ferry illegal people and goods across the Limpopo river or through openings near the border gates.

He told FTW there had been disputes between cross-

border vehicle operators (trucks and taxis) who were allegedly accepting fees for smuggling small quantities of banned import products in passengers’ luggage.

A clearing agent based at the Beitbridge border agreed that smuggling at the border was rampant, but pointed out that it was rather on foot than by passengers in vehicles as the vehicles were thoroughly searched by border authorities.

“Military patrols on the Zimbabwean side don’t closely scrutinise those on foot,” she said.

She added that she had personally witnessed “hundreds of people” carrying goods on their shoulders and backs as they entered the illegal openings in the fence near the border gate.

In her view, the border authorities “barely have a clue” of what is happening around them.

Referring to recent media reports of Beitbridge border closure, claiming that “hooligans” from South Africa had blocked traffic going into Zimbabwe forcing closure of the post for over eight hours, several clearing agents contacted by FTW denied this.

Alwyn Nel, managing director of Kingfisher Freight Services, said there had been no “significant impediment to the flow of traffic or operations”.

Transit fraud on the rise at Beitbridge

Trucks and taxis crossing into Zimbabwe from South Africa are closely scrutinised.

Transnet Freight Rail is looking to improve cross-organisation collaboration and improve speed to market in order to ensure an efficient rail service, says TFR’s acting general manager for commercial, Phumzile Sithole.

“Research is showing us that the digital explosion means that customers will dictate the experience and interact on their terms – and entities that are not able to deliver on those expectations will not be viable,” she said. “We are collaborating at a strategic level with customers to determine their exact needs and ensure we are delivering what they want.”

“We have made significant progress in this regard. In February we opened the AMSA steel hub in Isando where some 672 000 tons will move from road to rail this year. That means 42 000 trucks will be removed from the country’s highways per annum as the commodity goes back to rail,” said Sithole. – Liesl Venter

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As ports across the continent invest in infrastructure upgrades, co-opetition has become the buzz word.

“We can achieve far more as regions and as a continent if we collaborate,” says Pamela Yoyo terminal manager at the Cape Town Terminals.

“Monopoly leads to complacency and in a crowded market you need to stand out. Competition between African ports will ensure continuous improvement.”

Currently there are major developments under way in Africa. “Instead of looking at this from a negative perspective we need to understand what the benefit is and how we can adapt to ensure that we all remain viable.”

She says in South Africa Transnet Port Terminals is investing heavily in its operations in Durban, Ngqura and Cape Town as well as the other ports through its market demand strategy.

With a container capacity of 6.5 million TEUs, South Africa’s position on the major trade routes has enabled it to access the South South trade, the Far East trade, as well as the trade from Europe, the USA and West Africa.

“But it is not just South Africa’s ports that are investing in infrastructure, equipment and facilities. At the Lome Container Terminal in Togo they have upped capacity to 2.2 million TEUs while the draught is now 15.5 m and the quay length 1050 metres with 14 ship-to-shore cranes. The maximum vessel size this port can now handle is 14000 TEUs,” says Yoyo.

In Walvis Bay the port capacity is being trebled from the current 350 000 TEUs to more than one million per annum while in Takoradi in Ghana there have been ongoing developments to upgrade and

expand the port.“A second container

terminal has been opened in Kenya at the Port of Mombasa and in Tanzania there are pending container terminal developments.”

She says all of this highlights the growing competition for cargo volumes in Africa.

“If one looks at the US and Europe, where there are numerous cooperative agreements between ports, then it is clear that collaboration is the best way forward for Africa.”– Liesl Venter

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The seafreight rates holiday is officially over.

Shippers and forwarders have confirmed what lines and analysts have been reporting for some time – that rates are finally firming, and SA routes are no exception.

Value Logistics divisional director Stephen Segal, just back in South Africa from an intermodal conference in Germany when FTW spoke to him, said that it was a hot topic at the event.

“The feeling is that they will increase – and they have to increase from the clearing agent’s point of view because unless they do you’re making no profit.”

“There are GRIs (general rates increases) coming through from the Far East on a monthly basis – and even a Europe southbound GRI was announced in January,” CFR Freight managing director Martin Keck told FTW.

“But the question remains whether shipping lines will be applying them across the board,” said Segal.

A view shared by ECU Worldwide sales director

De-Leon van Rooyen. “Shipping lines have indicated more GRIs, but as we have become accustomed in the industry there is a waiting game involved before there’s confirmation of exactly how much the GRI will be.

“We have seen an increase in rates ex Asia where demand has outstripped supply, but rates seem to be negotiable on the Europe and Brazil routes.”

GRIs out of the Far East

have been between US$200-300 per TEU, according to CFR Freight seafreight sales manager Lee Viljoen. “Based on capacity the carriers decide on the movement of this surcharge,” she told FTW

“Every year the lines announce an increase, but this time it would seem they are determined to implement the whole increase,” Geodis

managing director Jan Ludolph added.

And it appears the lines are not interested in long-term contracts.

“For NVOCCs and general rates there are no long-term contracts,” said Keck. “We are “living” on a month to month basis.”

“They’re offering freight rates on enquiry,” added Segal. “You don’t even get a rate valid for a week or two."

“For years the whole supply chain has been saying that freight rates are not sustainable,” said Keck. “Now that there are adjustments happening there seems to be no acceptance.

“I strongly believe that importers and exporters need to change their views given

the marginal percentage that freight costs represent as a

part of the entire product costing.”

Shippers urged to brace for higher ocean freight rates

You don’t even get a rate valid for a week or two.– Stephen Segal“ We can achieve far

more as regions and as a continent if we collaborate.– Pamela Yoyo

“

Investments create new Africa port landscape

OIL AND GAS

FRIDAY June 2 2017 | 5

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As Transnet Freight Rail (TFR) gets set to pilot its first bimodal (road on rail) units before the end of the year, RailRunner SA CEO Mike Daniel told delegates at Gas Africa in Johannesburg last week that LNG transport was a feasible option using the technology.

The initiative, which is a 50/50 agreement between TFR and US company RailRunner, ticks all the boxes in terms of costs and efficiencies, in the view of TFR and its partner.

“When you look at bimodal, there are a couple of facets,” said Daniel.

“One is the terminal – a bimodal terminal can cost almost as much as a runway because infrastructure is immense. But RailRunner – with the trailer and the bogie – is a disruptive technology. It works at a terminal anywhere and makes the terminal easier and cheaper.

RailRunner intermodal trains are assembled directly from the container-carrying RailRunner highway

chassis, using compact specialised rail vehicles called “bogies.” The chassis and container are coupled to the bogie. The highway wheels are raised pneumatically, allowing the highway wheels to clear the track, thus transforming the road vehicle to a rail vehicle in a matter of

minutes. Train assembly requires no lifting of the shipping container, and is fast, simple and cost-efficient, according to Daniel.

“Because of the space between

vehicles we can add more containers to a train than conventional rolling stock and can provide container intermodal as well which is otherwise not possible in South Africa. Whatever trailer can go on the road can go on the bimodal vehicle. We can put on anything from tankers and cement trucks to f latbeds and containers. The strength of the unit is not in the box but in the f loor of the trailer.”

Daniel is also convinced that in TFR it has a world class partner for the technology.

“We’re often asked

‘How can you work with Transnet – they’re so inefficient?’.”

“Our response is simple. Later this year there’s a heavy haul conference in Cape Town and people from all over the world are coming to study what Transnet is doing on the coal and iron ore line.

“Transnet is world class at loading from terminal to terminal – and with bimodal someone has to find a load on road, someone else will bring the load to a terminal and someone else will operate the terminal; someone will produce a RailRunner block train and Transnet will pick up a loaded train at point A and drop it off at point B. Everyone is playing to their strengths and not their weaknesses and Transnet is no longer trying to be all

things to all men but focus on its core business.”

Daniel said when they started talking to Transnet they were told the CT to Johannesburg leg would take six days. That’s now down to three days or better.

“Their objective is whatever a truck can do plus a day. The day is required to pick up a load, put it in the terminal, put it on the train, haul it from point A to point B and do the whole system in reverse again.

“The time has come for co-operation between rail and road and between private entities and state-

owned entities. “We focus on

efficiencies and do what we’re good at to become more competitive.”

Bimodal technology well suited to LNG logistics

Whatever trailer can go on the road can go on the bimodal vehicle.– Mike Daniel

“

The global oil and gas logistics market is set to grow at an average annual rate of 6% over the next three years to 2020, according to the London-based global research company, Technavio.

A new Technavio report released last month (May) and titled ‘Oil and Gas Logistics 2017 – Opportunities, Challenges, Strategies and Forecasts’, says an international surge in offshore oil and gas exploration and production activities has been a primary growth driver for the logistics industry.

The report points out that due to the complexity and scale of oil and gas projects, shippers of the product are increasingly looking for high-end logistics and supply chain contract partners that offer a one-stop solution to help them avoid outsourcing different tasks to different vendors.

The oil and gas logistics industry is not just about focus on the product supply chains – it also deals with the non-hydrocarbon supply chains, which include handling of the heavy equipment, spare parts, and other requisite materials and services required to run the oil and gas business.

“The delivery of the equipment and services is critical to find, extract, refine, and market the oil and gas. Procurement and supply chain involves huge costs and is of critical importance for oil and gas companies,” said a Technavio researcher.– Adele Mackenzie

Shippers opt for one-stop logistics

6 | FRIDAY June 2 2017

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Regulatory uncertainty scuppers growth in oil and gas sector

Liesl Venter

South Africa’s oil and gas industry will remain undeveloped unless regulatory

certainty is introduced – and that includes finalising the controversial Mineral and Petroleum Resources Development Act (MPRDA).

According to independent African oil and gas consultant Dave Wright, the uncertainties introduced through the MPRDA amendment bill remain one of the reasons why investors and developers are not engaging with the South African landscape with as

much fervour as elsewhere.“Anyone who invests in

a country wants certainty. If one looks elsewhere in Africa where there is ongoing interest in the oil and gas sector, one sees that certainty. Many of these countries are not necessarily stable environments, but there is clarity on what the rules of the game are and that those rules are not going to be changed all of a sudden,” he said.

In South Africa this was simply not the case.

“Not only do we have a complete lack of clarity around rules, regulations and policies, there is also

constant change. The oil and gas industry by its very nature is not one that can operate in such an environment – hence the lack of interest in our country.”

He said this was exacerbated by the current political tension in the country. “The political situation in South Africa and the changes we have seen recently in key cabinet positions are the kind of things that oil and gas companies keep a very close watch on,” said Wright. “In the oil and gas sector companies carry enough risk on the exploration side

of it all that they are not going to take any other form of risk. Uncertain environments are risky and they will not step in until there is certainty.”

Wright said unless South Africa could introduce the required certainty – which included addressing the major concerns industry has had with the MPRDA amendment bill, particularly the state’s free carry and the dissolution of the petroleum agency – the oil and gas sector would not get the necessary attention from big international role-players.

“We need that attention

because unless we have these companies coming in and investing in exploration activities we are never really going to know what our oil and gas potential is,” he said.

In February the Minister of Mineral Resources, Mosebenzi Zwane, said that concerns around the MPRDA Amendment Bill had been resolved and that the process around it would be finalised by June at the latest.

It remains uncertain if industry role-players have been given a final document to scrutinise and what the current status of the MPRDA amendment bill is.

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With the ever-increasing cost of extraction, oil and gas companies are increasingly starting to look at ‘above-the-ground’ operations to ensure they can manage the cost of their supply chain operations, and they are turning to data to do so.

“In strong contrast to the decline in oil field discoveries, there has been an enormous increase in data in the past decade, which has led to many people noting that data is the new oil,” says Daneel Visser, GM: analytics at supply chain solutions specialist Resolve Solution Partners.

According to Visser, although data analytics is not new for the oil and gas sector, for many years it was primarily used in exploration. “In determining what reserves lie beneath the surface, oil companies have always invested heavily in data

visualisation tools, drilling software and other digital technologies,” he told FTW. “Now, with the rise of lower cost computing and increased data, analytics is opening

more possibilities than ever before.”

Advanced route scheduling software can now optimise

delivery points and provide insights to assist data scientists by determining the cost-to-serve.

“Additional automation such as automatic tank gauges can also help determine the actual fuel levels of various tanks, and so assist demand and transport planners to make sure they adhere to on-time-in-full service level agreements,” he added. “In a survey of oil companies and those in related support industries, recently conducted

by Microsoft and Accenture, over 85% of respondents indicated that increasing their mobile solutions – including Internet of Things

(IoT) capabilities and analytics – would increase the value of their business.”

Supply chain operators turn to data to manage costs

Advanced route scheduling software can now optimise delivery points.– Daneel Visser

“

Oil developments in Uganda are gaining momentum as exploration in the Lake Albert area draws to a close – with estimates of around 230 000 barrels of oil a day at full production.

With production licences having been signed it is hopeful that Uganda will make its target of producing oil by no later than 2020.

“Companies have been appointed to complete the front end engineering and design work for oil production in Lake Albert,” said Roelof van Tonder, a project analyst at Africa House. “Exploration activity has been very successful with more than 6 million barrel capacity discovered. More than 1.5 million is estimated to be recoverable and the project to start production is moving ahead.”– Liesl Venter

Uganda upbeat about oil

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Gas holds significant potential to transform the

Mozambican economy despite a lack of progress over the past year.

Plans for a multi-billion dollar liquefied natural gas (LNG) production plant are still on the cards, says Roelof van Tonder, a project analyst with Africa House.

“There has been a lull in developments on the ground in Pemba and Palma – mostly due to the drop in oil and gas prices – but we are seeing a lot of activity in the boardrooms again as the exploration projects are being discussed and

put together,” he told FTW. “This is because of the slight recovery in the gas price. It is all still in the very early stages and a lot still has to happen before we start seeing oil being extracted here.”

He said with the growing demand for LNG gas, the Mozambican gas project held very real potential.

“The country is however going to have to get its house in order as these

projects in Mozambique are part of a number of LNG projects around the world – all competing for financial

investment decisions at present.”

He said competing countries included neighbouring Tanzania as well as projects in the Middle East and Australia.

“There are only

a handful of companies that have the required balance sheet to make the investment needed to

develop these gas reserves – and Mozambique is going to have to convince them that it is a worthwhile investment,” he said. “One cannot rule out the possibility that these companies will decide to rather expand an existing gas project in Qatar for example than build a new plant from scratch.”

He said the unsecured debt scandal that rocked Mozambique last year had not helped the situation much.

“The gas outlook in Mozambique is very exciting but it is playing in a very competitive market and so they are going to have to pull out the stops to make it a reality.”

Growing demand for LNG gas pumps up potential for Moz

The gas outlook in Mozambique is very exciting but it is playing in a very competitive market.– Roelof van Tonder

“Tanzania’s $1.2 billion gas pipeline between Mtwara and the capital of Dar es Salaam is expected to reach its full capacity within the next ten years – but is at present only utilising about 10%.

According to Africa House analyst Roelof van Tonder, the country is planning several gasfired projects that will see it utilise more capacity on the pipeline.

“The government and the Tanzania Petroleum Development Corporation have identified several projects that will utilise gas. As these projects take off the pipeline capacity will increase progressively.”

Construction of the Kinyerezi II power plant started in 2016 and is the first of the gas-fired projects that will lift the pipeline capacity.– Liesl Venter

Tanzania projects planned

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The first production of liquid natural gas (LNG) in Mozambique is expected to start f lowing in 2022 – although initial estimates were that it would come on stream in 2016.

And while there are plans to develop ports closer to the main gas fields in the north, Beira – and to a lesser extent Pemba – are already equipped to handle the off loading of the equipment needed for the planned onshore facilities.

Beira is already shipping condensate from Sasol’s Central Processing Facility (CPF), which is 40 kilometres north-west

of Vilanculos and around 500 kilometres from Beira.

Sasol has plans to expand its production in the region – making it the only energy company which is commercially active in Mozambique.

Expansion plans include the building of an oil refinery, with Sasol planning to be the first to extract oil in Mozambique. Production could start by 2020, Sasol joint chief executive Stephen Cornell is quoted as saying.

Project cargo will need to move through Beira, Maputo or South Africa – with Beira being the closest.

Beira ready for action

10 | FRIDAY June 2 2017

Adele Mackenzie

Mozambique is to establish a National Trade Facilitation Committee (NTFC) to ensure it meets the World Trade Organisation’s (WTO) Trade Facilitation Agreement (TFA) criteria, especially around the movement, release and clearance of goods.

The TFA came into force on February 22 this year following its ratification by two thirds of the WTO members, including Mozambique. “Full implementation of the TFA has the potential to globally reduce trade costs by 14.3% and create up to US$1 trillion in additional trade per year,” said Caroline Ennis, partner at consultation company, Lahluva Consultores.

Ennis pointed out that many of the provisions in the TFA focused on challenges raised by the logistics industry around trade barriers in Mozambique.

“These include logistics costs, pre-shipment inspections which take too long, lack of information and a lack of private sector consultation by government-run entities,” she commented.

A recent report by the United States Aid (USAID) funded programme, Supporting the Policy Environment for Economic Development (SPEED+), pointed out that services offered at the KM4 Road Terminal at the Ressano Garcia border post hampered Mozambique’s competitiveness.

Co-author of the report, Erminio Jocitala, said that while the Mozambique Development Corridor (MDC) had been making progress in relation to other Southern African Development Community (SADC) countries in improving its competitiveness in terms of the costs and time taken to import

and export containers, the corridor also competed with Durban. And Durban, which is investing heavily to become the regional market leader for container handling, has 24-hour access for transporters.

“For example, the KM4 facility only operates 16 hours per day compared to the 24/7 operations at South Africa’s Lebombo Border Dry Port (KM7) which also offers a huge parking area compared to the KM4,” said Jocitala.

He added that peak operating hours at KM4 could see trucks waiting between three and five hours to access the facility, with clearance times averaging between 45 minutes and five hours.

“Estimated revenue losses due to waiting times of an average 75 minutes can range between R2 500 and R9 900 per truck per month,” Jocitala highlighted.

He said the MDC was “vital to the economic transformation of Mozambique” as well as to the economy in the southern part of the country. “The corridor is one of the main import and export routes, linking the mining production centres to the industrial and agricultural regions in South Africa, extending to Johannesburg and Pretoria in the extreme west of the corridor. The corridor also serves the provinces of Limpopo, and Mpumalanga and Gauteng (to a lesser extent) in South Africa, as well as Swaziland and southwest Mozambique.

“It is therefore extremely important that the country finds find new solutions to overcome capacity restrictions and ensure the MDC meets the logistics and management requirements for the supply chain,” Jocitala said.

The World Economic Forum 2017 Global Competitiveness Index ranks Mozambique 133rd out of 138 countries.

Mozambique sets up committee to address trade competitiveness

Trade finance in Africa is changing fundamentally with some key players exiting the market and new models developing.

According to Steven Gamble, a director at Norton Rose Fulbright Africa, this seems to be the case for banking finance in general on the continent.

“We have seen a number of key players on the continent who have been active for decades exiting the market,” he said. “New sources of finance are required on the continent. We are likely to see greater innovation and more hybrid transactions as shadow banking or non-bank finance players enter the market.”

He believes it will be a key trend that will continue for some time – particularly given the increasingly difficult regulatory world being encountered.

“Banking generally is becoming more difficult, with

increasing regulation affecting the less developed world markets disproportionately. There is certainly a “flight to quality” by international banks,” he told FTW. “The main dangers we see. particularly for African participants, are the costs

and risks of increasing regulation that are making certain relationships, in particular with smaller traders active in countries deemed risky, no longer worthwhile for international banks. Not

only are new clients not even considered, but existing relationships are being terminated.”

He said Basel III was making finance more expensive. “Multilaterals are responding to this challenge by augmenting their offer of products that are designed to address this problem such as guarantees to upgrade credit ratings. They are also

looking at conditional sale type structures with clients to avoid the traditional debtor/creditor relationship.”

Trade finance experts agree that in Africa financing models will have to change in the future. It is understandable that development finance institutions (DFIs) that have played a significant role in financing transactions cannot meet the ever-increasing demand.

With expectations of the Africa-rising narrative set to continue, the playing field is changing. Different growth rates and foreign direct investment in different parts of

Africa will increasingly become the norm. Also, as different countries manage to diversify their economies from raw commodities, they will enjoy a greater share of this growth.

According to Gamble, all eyes will remain focused on

East Africa which is set to continue to

boom through regional integration.– Liesl Venter

Winds of change sweep through Africa’s finance sector

We are likely to see more hybrid transactions as non-bank finance players enter the market.– Steven Gamble

“The port authority on the island of Reunion is well on its way to establishing the port as an Indian Ocean hub, with transhipments having increased by 200% in the past year.

According to Henri Dupuis, director of sales and operations at the Port of Reunion, the port received 74 000 TEUs of transhipment cargo in the past financial year, a whopping 200% increase on the previous year.

“A total of 324 600 TEUs was handled at the port including the transhipments in 2016,” said Dupuis.

This was the result of ongoing efforts by the French state-owned port, authority to develop the island as a transhipment hub since it was the closest low risk zone between Asia and sub-Saharan Africa, he added.

Dupuis said it offered extremely good transit times between Africa and Asia and was only 16 days’ sailing from China and four from South Africa and East Africa. – Liesl Venter

Reunion transhipment uptick

Challenges raised by logistics industry

• Logistics cost

• Pre-shipment inspections

• Lack of private sector consultation

FRIDAY June 2 2017 | 11

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ABJ - AbidjanABU - Abu DhabiANT - Antwerp, BelgiumASIA - Asia BAR - BarcelonaBRH - B’HavenCON - ConakryDAK - Dakar DAM - Damman, Saudi ArabiaDAR - Dar Es SalaamDBN - Durban DES - Dar es Salaam DOH - Doha, QatarELS - East London, SAEU - EuropeGUN - Gunsan, KoreaHAM - Hambantota, Sri LankaHAR - Le Harve, France HUA - Huangpu, ChinaIMM - ImminghamJEB - Jebel Ali JPN - Japan

KIS - Kisarazu, Japan KOB - Kobe, JapanKOR - KoreaKUW - KuwaitKWA - Kwanngyang, KoreaLAS - Las Palmas LAG - Lagos LIB - Libreville LOB - Lobito, Angola LUA - Luanda MAP - Maputo MEL - Melbourne, Australia MDV - Montevideo MOM - Mombasa NAG - Nagoya NAM - NamibePDG - Pointe des GaletsPE - Port Elizabeth, SA PKG - Port Kelang POI - Pointe Noire, CongoPOR - PortugalPYU - Pyaungtaek, Korea

QNG - QingdaoREC - Recife, BrazilROT - Rotterdam SAL - Salvadore, BrazilSAN - SantosSAV - Savannah, GA SHA - Shanghai China SNR - Sheerness, UKSIN - Singapore SOH - Sohar, OmanSOU - Southhammpton, UKSRI - Sri Lanka TAM - Tamatave TEA - Tema, GhanaTIL - Tilbury, UK ULS - Ulsan, KoreaVIT - Vitoria, BrazilWVS - Walvis Bay, NamibiaYAN - Yangon, Myanmar YOK - Yokohama XIN - Xingang, ChinaZAR - Zarate

VESSEL VOY JPN SHA SIN DBN SAN MDV ZAR VIT DAK KOR EUASIAN KING 139 sld sld sld 03/06 14/06 18/06 20/06 25/06 - tba -ASIAN CAPTAIN 157 09/06 14/06 20/06 02/07 15/07 19/07 20/07 12/07 01/08 - 09/08

EUKOR - ASIA / SOUTH AMERICA / EUROPE

EUKOR - ASIA / AFRICA VESSEL VOY ASIA MOM DAR DBN LUA TEA ABJ DAK LIB CON ANTMORNING COMPOSER 089 sld sld 29/05 03/06 - 07/06 - - 09/06 15/06 25/06GRAND COSMO 007 sld 12/06 14/06 20/06 - 29/06 01/07 tba - - 13/07GRAND PACE 089 29/05 28/06 30/06 05/07 return to Asia

CUSTOMS MATTERSby Zama Mgwedli,

Shepstone & Wylie Attorneys

The Border Management Authority Bill was tabled in Parliament in 2015 and the ANC is now looking to expedite its passing.

Current border management under the Border Control Operational Coordinating Committee (BCOCC) is in a state of disarray.

The Bill proposes a new standalone entity overseen by the Department of Home Affairs and comprising elements of the SAPS, the SANDF, the Department of Agriculture, and Customs. This has

been met with concern as the Department of Home Affairs does not have a good track record when it comes to corruption and efficiency.

Sars and Treasury have hit back hard in reaction to the Bill. They agree that Customs should not be taken out of Sars and integrated into the BMA. It is estimated that BMA officials could collect approximately R3 billion a year at the ports.

These monies currently accrue to the state through Sars, which has earned

itself a reputation as one of the most efficient tax collection agencies in the world.

On the up side, an integrated border management agency could have its advantages, including smoother movement of cargo with less interruptions through fragmented intervention by various departments, each with their own mandate.

The success of the proposed Border Management bill will lie in its implementation and political will.

The Border Management Authority bill – should you be concerned?

LAST WEEK’S TOP STORIES ON

Logistics industry could benefit from local oil refineryGovernment will consider a public-private partnership (PPP) approach to the establishment of a new oil refinery, along with strong participation from a crude oil producing partner.

Ocean carrier merger finalisedThe Hapag-Lloyd and United Arab Shipping Company (UASC) merger has been sealed.

Sars to hold Customs Duty Act workshopSouth African Revenue Service (Sars) will hold a workshop on 29 May that will provide an overview of the proposed deferment rules (10:00 to 11:00) and

comments received on the second draft rules to the Customs Duty Act, 2014 (11:00 to 14:00).

Transport minister commits to stronger law enforcementLaw enforcement is crucial to ensuring road regulations are adhered to and the Department of Transport (DoT) is set to increase the number of traffic officers on South Africa’s national and provincial roads.

Western Cape delegation in UK to discuss Brexit impactDeveloping new markets is important but so is growing existing ones, according to Alan Winde, minister of economic affairs in the Western Cape.

China has expanded its ambitious One Belt One Road (OBOR) initiative in recent months to include Africa.

Regional director for the Middle East and Africa at the Hong Kong Trade Development Council (HKTDC), Perry Fung, said while Africa had not been a part of the economic transformation plan when first conceived by the Chinese President Xi Jinping in 2013, players on the continent were now being targeted to be included in the initiative.

“The OBOR will bring very real opportunities for exporters not only in the Western Cape but the whole of South Africa,” Fung told a gathering of the Exporters Club Western Cape recently.

“This entire initiative is about creating opportunity.”

He said the plan was to invest heavily in infrastructure to allow for the development of new trade routes or rather re-establish the ancient silk roads between Asia and the Middle East.

Fung said the OBOR would see the establishment of rail, road and shipping links with major markets in the Middle East, Asia and Africa. While there has been concern over China’s ability to pull off its plan, Fung said investments into the initiative were

ongoing and the plan was gaining momentum in China and Hong Kong.

“Through OBOR exporters will be able to connect with more than 60% of the world’s population and 35% of its

GDP. That is the cake that one is cutting a slice from.”

He advised Western Cape exporters to keep abreast of developments on the OBOR.

He said another

initiative worth watching was the regional economic expansion plan for Guangdong, Hong Kong and Macau. “This will see the

creation of a regional hub linking 11 mega cities in the region. The development of this economic hub is central in the OBOR plan.”

According to Fung, with improved accessibility this is a viable option for South African exporters looking for new Asian markets for their products.

“Another area that offers real growth opportunity is the development of the Xiongan area about 100km south west of Beijing. This 2000sq-km city will operate as a new growth pole for the country’s economy, expanding the boundaries of Beijing,” he said. “It is a prime market for exporters from South Africa.”– Liesl Venter

New regional hub will link 11 mega cities in Asia region

Fishy freight story

One Belt One Road initiative expanded to include Africa.– Perry Fung“

Transporters know when the rains have been good in neighbouring countries – the demand for frozen fish drops, according to Verdun van der Watt, manager of the Wesbank division of FP du Toit Group. based in Walvis Bay

When the rivers and dams are full, the fish start breeding, which means that the locals do not have to rely

on imported protein – until the

next dry spell.Trucks take

containers of frozen

fish from Walvis Bay

as far as the Democratic Republic of Congo, Malawi and Mozambique, he says.

12 | FRIDAY June 2 2017

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Government has earmarked an amount of R1.5 billion to fund an incentive programme to protect the local downstream steel industry.

It’s part of a raft of support measures, according to chief commissioner of the International Trade and Administration Commission (Itac) in South Africa, Siyabulela Tsengiwe, who said that the Downstream Steel Industry Competitiveness Fund had been formally announced late last week by economic development minister, Ebrahim Patel.

The move, which comes in the wake of government’s favourable consideration of calls by ArcelorMittal SA for a 12% safeguard duty on imported, hot-rolled steel – over and above the 10% import duty imposed last year – prompted CEO of the National Employers’ Association of South Africa, Dr Gerhard Papenfus, to question government’s commitment to the downstream steel industry.

Papenfus said additional

duties on imported steel would make it unaffordable for local downstream producers – including foundries, valve and pump manufacturers, and machining plants – to manufacture competitively.

“The question is why the government would protect a primarily foreign-owned entity, to the detriment of 10 000 downstream steel manufacturers.” He said that Itac had also advised in an “essential facts” letter that the introduction of a safeguard duty would not be “in the public interest”.

Tsengiwe told FTW it would be “premature” to comment on the introduction of a safeguard duty as Itac’s final report on this issue would only be released later this month (June). “What I can say is that Itac has

an open and transparent policy and we consulted broadly during our investigation. The downstream industry was given an opportunity to state its case and Dr Papenfus’s organisation

was also represented,” he said.

He added that it was up to the minister of trade and industry to accept Itac’s report and implement, or not implement, the findings and

recommendations. Tsengiwe acknowledged that

the downstream industry had taken a knock when the 10% import duty was introduced, highlighting however that the Itac investigation had revealed that the primary steel sector could not survive the oversupply of steel on the market. He said that the decision had been taken to

protect the ongoing survival of the sector in South Africa and prevent massive job losses after it had become clear that plant closures were “a very real threat”.

“We are cognisant of the challenges faced by the downstream sector and are considering offering rebates on imported steel products that are not produced locally,” he said.

Director general for industrial policy at the Department of Trade and Industry (dti), Garth Strachan, said saving the country’s primary steel industry, while at the same time enabling beneficial prices for local downstream producers, was a “a delicate balance” .

He pointed out that South Africa had a “way to go” before it was on par with other steel producing countries’ efforts to protect their industries but added that history had shown that when a nation’s primary steel industry collapsed it was “almost impossible” to revive it.

“South Africa cannot afford to lose its primary steel making capabilities, but nor can it ignore the need to safeguard the continued survival of its downstream metals industry,” he said.

Papenfus, in an opinion piece, argued that large foreign-owned companies such as ArcelorMittal – the main driver behind the application for further safeguard duties – should rather be forced to adapt to the needs of the downstream producers, not the other way around.

According to him, ArcelorMittal loyalists say that if primary steel plants close and the steel prices normalise, overseas steel producers such as China will dictate terms to the local downstream sector. “There are many competing steel mills in China and who dictates that the downstream sector buys from China?”

FTW was unable to reach ArcelorMittal for comment before going to print. – Adele Mackenzie

R1.5bn incentive fund launched to support downstream steel producers

Safeguard duties only serve as a slow poison to the downstream sector.– Gerhard Papenfus

“

New dates set for port booking system

hours from the time a truck entered the port and exited it. According to him, the current average truck turnaround time is between 10 to 12 hours. “About six months ago, it was 18 to 36 hours,” he said.

Dube – who told FTW in an e-mailed reply that “ongoing engagement with stakeholders was key to ensure the smooth roll-out of the system” – said the TAS would improve operational performance at Durban

Container Terminal (DCT).“We intend to end up

with an 80% booked versus 20% unbooked split as we’ve done the necessary research and seen that 100% booked appointments will put us under extreme pressure and leave us in a permanent state of conflict with the industry,” he pointed out.

Initially however, the overall number of trucks received at DCT would be split so that 40% of the volume would be

allocated to reefers booked via the truck appointment system, with the remaining 60% being assigned to unbooked reefers, explained Dube.

He said the TAS system would result in a more structured operation, improved utilisation of terminal resources, and fluidity of the staging area. “It will also improve safety and stop bribery, reduce congestion in Bayhead road and save costs for all parties,” said Dube.

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