Does SA really need a state-owned shipping company?

• Author: Moneyweb
• Published date: 10 November 2022
• Publication title: Citizen, The (South Africa)

Just as South African Airways (SAA) was the national air carrier, Sasco would be the national shipping carrier

Sasco would own at least one oil tanker, a chemical tanker, container ship, bulk carrier and a limited fleet of vessels, all with preferential access to SA ports.

This is to be funded by the Industrial Development Corporation (IDC) and money appropriated by parliament.

The plans for a national shipping company form part of the Comprehensive Maritime Transport Policy and were first mooted in 2017.

"The shipping of our essential imports and exports is mostly reliant on foreign governments and companies and this might not be able to shield South Africa from supply chain disruption, especially during times of natural disaster or international conflict," says a Department of Transport (DoT) statement.

READ MORE

Transnet working to clear congestion in Richards Bay Port

South Africa is alone among Brics nations in not having its own ships, which makes it vulnerable to supply disruptions, says the DoT.

Motivation?

The timing of the shipping company announcement is puzzling, coming so soon after SAA's inglorious financial collapse before being revived as a partially privatised airline, and the multiple volumes of the Zondo Commission's investigation into state capture at state-owned enterprises (SOEs).

The idea of establishing another SOE makes little sense, says Ghaleb Cachalia, DA spokesperson on public enterprises.

"The supply chain issues are not a result of a dearth of ships, but because of [the] inability of ports to get their act together," says Cachalia. "International shipping companies are capable of doing the work [of a national shipping company]. All government has to do is fix up the ports, and make sure loading is working and containerisation is working."

The recent Transnet pay strike created backlogs at the major South African ports, which may take up to two months to clear.

Durban, Cape Town and Ngqura (East London) were rated in the bottom 10 of 370 ports worldwide, according to the World Bank Container Port Performance Index for 2021.

"South African ports are beset with operational inefficiencies," said the report.

"For example, at the start of this year [2021], cargo ships entering Cape Town had to wait for up to two weeks to berth before customs and offloading could commence."

An equally pressing issue facing logistics providers is getting cargo from the ports to the hinterland, and getting dry bulk cargos onto the seas for export...