Transcript TEMPI ECONOMIC WORK-STREAM KEY QUESTIONS AND KEY …

THE ECONOMIC VALUE OF A
PORT CITY
Presentation to Maritime Summit
Durban
26 October 2011
Trevor Jones
University of KwaZulu-Natal
Outline & way forward
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Context of the discussion
– The “economic value” of a port
– The Port of Durban in a regional context
•
The Port of Durban and the Ethekweni economy
– Employment impacts
– Expenditure impacts
•
Port users and the trading community
– Port costs and productivity/competitiveness
– Port capacity and congestion
•
The future size & shape of the Port of Durban
– Capacity expansion & the DIA “dig out” option
– Who will pay and how much?
– Who will manage/operate and how well?
The economic value of a port
Value to whom?
• Value to the host city/region (eThekweni), in
terms of jobs, investment opportunities,
spending etc
• Value to the community of port users, in
terms of user costs, time etc..
“The economic function of a port is to lower the
generalised cost of through transport” (Goss)
Durban as a regional port
• Colossal by African standards (i.t.o
infrastructure and traffic base)
• Very large by Indian Ocean Rim
standards
• Very large by southern hemisphere
standard
• Modest by global standards
Port traffic league table by cargo handled (2009)
Port
Shanghai (!)
Singapore
Rotterdam
Tianjin
Ningbo
Guangzhou
Qingdao
Qinghuangdao
Hong Kong
Busan
Houston
Shenzhen
Dalian
Port Hedland
Kwangyang
Ulsan
Nagoya
Antwerp
Los Angeles
Chiba
Port Kelang
Kaohsiung
Long Beach
Inchon
…
Richards Bay
… Durban
Source:
Total traffic
(m tons)
Teus
(m)
Teu
rank
505.7
472.3
387.0
381.1
371.5
364.0
274.3
243.9
243.0
226.2
220.0
219.7
204.0
178.6
176.5
170.3
165.1
157.8
157.4
144.9
137.6
133.6
132.2
122.1
24.91
25.87
9.78
8.67
10.43
11.02
10.25
21.10
11.98
1.80
21.10
4.55
1.81
0.04
2.11
7.31
6.75
0.07
7.31
8.58
5.07
1.56
2
1
10
11
8
7
9
3
5
4
23
47
14
16
13
12
18
-
77.6
74.7
2.40
38
ISL, Bremen, 2010
Notes: Tonnages are hairy, being a mix of metric tons, freight tons and
“harbour” tons. Oil terminals are excluded, as are “composite”
ports, such as South Louisiana – nominally #10
Durban as the leading
southern hemisphere port?
• No, i.t.o. aggregate cargo volumes
• Not quite, i.t.o. container volumes
(teus): #3 behind Jakarta and Santos
• Very likely, yes i.t.o. depth & diversity
its related port community (cluster)
• Emphatically no, i.t.o. productivity &
competitive cost to port users
Value of Durban port to
Ethekwini?
• What does handling 70+ million tons of cargo
annually do economically for the metropole?
• …or handling 2.6 million teus annually?
… not a simple relationship, because..
1 ton crude oil  1 ton anthracite  1 ton
fruit in pallets  1 ton containerised
computer components  1 ton bagged
rice
Direct Port Ancillary
establishments
Port Activities
generate
employment and
spending in
Plus INDUCED or MULTIPLIER
Effects on EMPLOYMENT &
EXPENDITURE
Service providers to
port ancillary firms
(indirect relationship)
Port-using cargo
Owners (importers
and exporters) linked to
the port in varying
degrees of intensity
Port-related employment
1995/96 and 2006 estimates, suggesting:
• ~35,000 local jobs in DIRECT portancillary activities
• ~10-12,000 in INDIRECTLY portrelated activities
• plus not quantified but very substantial
in family of local port-using cargo
owners
All FIRST-ROUND activity without MULTIPLIER effects
Main “suspects” would include:
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•
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Transnet (TNPA, TPT & TFR)
Private Terminal operators
Clearing & Forwarding
Warehousing, depots, logistics (key area – Durban
as a distribution “platform”)
Road haulage
Ships Agency
Stevedores (shrinking)
Ship repair (& shipbuilding?)
Security (growing)
Ship chandlers, suppliers
Bunker industry
Port-related expenditure
Main estimated first-round elements are:
• ~R2.2 billion wages & salaries in portancillary cluster (2010 prices)
• ~R1.4 billion in local non-wage
spending (indirectly port-related), or
~R3.6 billion in aggregate first-round portrelated spending in the local economy
INDUCED spending?
• Local economy multiplier values of 1.7
to 1.9 plausible (Brisbane, Oakland,
Durban, etc..)
• Aggregate annual port-related local
expenditure of ~ R6.0 to R6.9 billion
All on a NARROW view of the port
without considering cargo owners
Expenditure impact of gains or
losses in port traffic?
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Consider the spending per call of:
32,000 grt container vessel
Working 1550 boxes* at the DCT,
Port time 2 days
500 tons bunker fuel purchased
2010/11 harbour tariffs
* 650 full imported boxes, 400 full exports, 250 empties, 250 transhipped
Profile of container vessel spending, excluding cargo dues, 2010 traffic and tariff levels
Item/Service
TNPA marine infrastructure & services
Expenditure
R
% total
172,750
2.9
1,164,753
19.8
Stevedoring & Lashing/Securing1
26,800
0.5
Ships Agency
44,000
0.75
Ship Chandlers
60,000
1
1,123,500
19.1
Container depots, logistics etc
340,000
5.8
Road haulage2
720,000
12.2
Rail charges2
140,000
2.4
95,000
1.61
1,954,000
33.2
40,000
0.7
5,880,803
100
TPT Terminal charges
Clearing & Forwarding and Warehousing
Ship repair services
Bunkers & fuel
Miscellaneous medical, crew transfers etc
TOTAL EXPENDITURE PER CALL PER VESSEL DIRECTLY RELATED SPEND
1 Container carrying lines pay an all-in terminal charge that include stevedoring, with the latter in turn offering their services to TPT. For the
purposes of this exercise, these charges have been unbundled to separate out the (small) stevedoring component.
2 Based on a 80%/20% road/rail split of cargo distribution and 35%/65% split of container volumes across Durban/non-Durban cargo owners.
Local cartage activities and 20% of Durban-inland transport is assumed to be controlled by service providers in the eThekwini metropole.
Profile of Container Vessel Spending, 2010 Traffic & Tariff levels
Miscellaneous medical, crew
transfers etc, 40,000
TNPA marine infrastructure &
services, 172,750
Bunkers & fuel, 1,954,000
Ship repair services, 95,000
TNPA cargo dues, 1,534,500
Rail charges3, 140,000
TPT Terminal charges, 1,164,753
Stevedoring & Lashing/Securing1,
26,800
Road haulage3, 720,000
Ships Agency, 44,000
Container depots, logistics etc,
340,000
Clearing & Forwarding and
Warehousing, 1,123,500
Ship Chandlers, 60,000
IMPLICATIONS
• Substantial local spending gains from
increased port activity; and obviously
• Significant potential expenditure losses
from failure to attract additional traffic or
loss of traffic;
• Broad spread of benefits across public
and private players
Importance of maintaining genuine
TERMINAL port status
Port value from users’
perspective
Overwhelming evidence of:
• High user-costs across a broad range
of activities (Moving South Africa, Ports
Regulator data, etc.)
• Low productivity indicators (container
moves per gantry hour, cargo clearance
rates etc.)
• Inability to cope with sea trade demand
(vessel waiting time, congestion etc.)
Comparative port authority costs – Durban,
Rotterdam, Sydney, Melbourne
Vessel:
Type:
Tonnage:
Draught:
Time in port:
Cargo activity:
MSC Charleston
Cellular container vessel (gearless)
89,954 gross registered tons (GT)
12 metres on arrival and departure
96 hours (4 days)
2,000 teus discharged (imported cargo)
1,600 teus loaded (exported cargo)
400 empties loaded
In terms of PORT AUTHORITY
charges, Durban a massively high cost
port, but not in all respects…
• Charges for MARINE INFRASTRUCTURE (Port dues) and
MARINE SERVICES not the main problem
– Port dues generally below those of competitor ports in EU, Oz
– Pilotage costs modest by international standards
– Some good things happening in terms of marine services delivery,
but….
•
Charges for CARGO-HANDLING INFRASTRUCTURE outrageously
high
– Cargo dues still the real tariff bugbear
– Still price/costs distortions (Ad Valorem Wharfage ghosts not laid)
– A disastrous situation in terms of attracting additional, marginal
cargoes
– Militates against attainment of strategic “hub” port status
Costs worsened by chronic
congestion, vessel queuing
Small exercise
• 115 container vessels
• 43 days (daily Sapref reports)
• August-September 2011
• Daily timecharter rates imputed
Average delay of 3.28 days
Time cost of ~R40 million (~R1 million/day)
Whither Durban port?
DIA “dig-out” port site the front runner
• Right choice
• Less saturated immediate port area
• Good intermodal links (rail focus to
inland clearing house – Cato Ridge?)
• Real capacity enhancement and “hub”
port basis
Future challenges: who will
pay for new capacity and how
much and who will manage
and how effectively?
• A pairing of a municipal and a national port site?
(fanciful)
• A more powerful partnership with private investors?
MUCH STRONGER TRANSNET/CITY/
PORT USERS RELATIONSHIPS THE WAY
TO UNLOCK PORT VALUE