Praise for East London car terminal

Apr 26, 2003
Author: P&S

After a mere three years South African Port Operations (SAPO) officials say the East London Car Terminal is on the brink of a new era.

In celebrating its third birthday at a function at the port on Friday (25 April 2003) senior Transnet, SAPO and National Port Authority (NPA) officials took the opportunity to highlight its successes and to provide a tour of the terminal and the neighbouring DaimlerChrysler South Africa motor assembly plant.

During the past year the port of East London has achieved its highest turnover yet and has become a bustling import/export harbour handling some three percent of the cargo passing through South African ports each year. While this percentage may not sound much, it represents a complete turnaround for the port which until recently faced a real possibility of being closed due to lack of ships and cargo.

The turning point can be attributed to the R87 million investment in a state-of-the art car terminal on the west bank of the river port to service Daimler Chrysler South Africa (DCSA), which has become the port’s anchor tenant.

A R42.1 million investment in the Container Terminal on the East Bank has also played a major role in increasing volumes. Growth in vehicle exports run parallel to increases in imported containerised parts used in the assembly of vehicles, and a significant percentage of completely built-up vehicles are also exported in containers.

Between 2001 and 2002 alone, the number of vehicles moving through the East London Car Terminal increased by 29 percent and reached 51,000 last year. This has helped East London position itself as the automotive industry hub for the Eastern Cape and to sell itself as a perfectly central gateway to southern Africa’s major industrial centres.

The investment this year of R13 million by the NPA to extend the draft of the quay wall at the car terminal, from the current 9m to 10.7m alongside, will have a major impact on the terminal and port by allowing the largest car carriers to use the facilities, says Nosipho Damasane, SAPO general manager for the Eastern Cape.

“For a start we are accommodating the future. The trend is to build bigger ships and ports have to align themselves with this trend. It will also improve the turnaround times for large car carrying vessels already calling at the port. These ships dock at other terminals where the draft is deeper and then the vehicles are driven round to the car terminal.”

The development of the automotive industry in the Eastern Cape is a key strategy of the region’s Industrial Development Zone, and Damasane says she sees the success of the car terminal and the deepening of the quay wall as catalysts for this development.

The mayor of Buffalo City (East London region), Sindisile Maclean sounded a warning that the railway line between East London and Gauteng remained a hurdle to be overcome. “We have to get this railway line rehabilitated and realigned to carry the vehicles from the northern assembly plants to our port for export,” he said.

“When that happens, and we are certain that it will following numerous political interventions, we will truly be able to say we have arrived. The fortunes of our port and the city are intrinsically linked, and I believe that with integrated development approaches, we will create a bustling import and export economy.

But for all the euphoria of the occasion, much depends on the success of DCSA in winning the bid for the worldwide contract to manufacture the new generation of right-hand drive C-Class Mercedes-Benz cars. If DCSA is successful it will mean all the equipment at the local plant will need review and the company would probably have to invest a further R1.5 billion in retooling and adding staff to produce approximately 80,000 vehicles per year. The upgrades by suppliers to meet new demands could be as much as three or four times greater.

For SAPO and the car terminal, the increased volumes will most likely require that the terminal building be increased from its present three floors to its maximum design capacity of eight storeys. This would increase the number of parking bays from 2,778 to 7,246 and would require a capital investment by the NPA in the order of R86 million.

Increased volumes through the port could also translate into an expansion for the container terminal and the need for additional in-transit storage capacity for the export leg, conservatively estimated at R27m. Were other business to also escalate this could lead to demands for an entirely new container terminal – the present terminal is a bit of a Heath Robinson affair that ‘just grew’ and which still has no fixed equipment such as shoreside gantry cranes, requiring visiting ships to be self-geared.

One of the other challenges facing the port and city is its reliance on DCSA. It is often joked that when DCSA gets a cold the entire East London region reaches for a handkerchief, but behind this humour lies serious concern. The emerging Industrial Development Zone lying adjacent to the harbour will no doubt go some way to relieve the pressure and responsibility that DCSA management must sometimes experience, although in the meantime both the port and the city will accept whatever comes their way while they celebrate the success of their car terminal and port.

Pressure will intensify on government and Transnet to move ahead with upgrading the railway to Gauteng amidst efforts of turning East London into the export port of choice for Gauteng motor manufacturers. To this Dr Hansgeorg Niefer, DCSA management board member for manufacturing has added his voice and appealed to other manufacturers to support the East London efforts.

“It would be better for the port to have more than one leg to stand on, and would also make the cost structures more competitive,” he told Ports & Ships.

Meanwhile Les Holbrook, director of the Border-Kei Chamber of Business gave assurances that the Chamber would encourage other manufacturers to use the port and car terminal.

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