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March 2013

DERIVING PRAGMATIC EXPERIENCES FROM CHINA PORTS THAT ARE CENTRAL IN BUILDING CAPACITY TO ATTRACT MEGA VESSELS: THE CASE OF DURBAN PORT: Presentation to the SATC Conference by Bevuya Mdlankomo - C-BRTA 7 July 2015. OUTLINE OF THE PRESENTATION. BACKGROUND INTRODUCTION PROBLEM STATEMENT

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March 2013

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  1. DERIVING PRAGMATIC EXPERIENCES FROM CHINA PORTS THAT ARE CENTRAL IN BUILDING CAPACITY TO ATTRACT MEGA VESSELS: THE CASE OF DURBAN PORT: Presentation to the SATC Conference by Bevuya Mdlankomo - C-BRTA 7 July 2015

  2. OUTLINE OF THE PRESENTATION BACKGROUND INTRODUCTION PROBLEM STATEMENT SCOPE OF THE PAPER STUDY DESIGN LITERATURE ASSESSMENT / THEORETICAL FRAMEWORK DURBAN PORT EXPERIENCE WITH MEGA SHIPSIT ANALYSIS OF DURBAN PORT CONCEPTUAL FRAMEWORK MAJOR RECOMMENDATIONS March 2013

  3. BACKGROUND : CONTEXT March 2013

  4. BACKGROUND: (cont.…) • Key Realities : • Based on the new build vessel orderbook  global container shipping capacity is expected to grow 8.4%in 2017, followed by 5.9% in 2018, 1.2% in 2019 and 0.01% in 2020 on a gross basis, compared to only 1.2% net capacity growth in 2016

  5. INTRODUCTION:DEFINING MEGA ? • It is apparent that containership size has been experiencing consistent growth over the past decades. • Thus, meaning what was considered to be mega 10 years ago cannot be considered mega today. • Merk, Busquet and Aronietis, (2016) indicate that there are different ways to measure container vessels, such as the length and the maximum TEU capacity that the ship is able to carry. • In this paper the method that was used to measure container vessels was based on TEU capacity. March 2013

  6. INTRODUCTION :DEFINING MEGA ? ( cont..) • A container vessel was considered to be mega, if it has the capacity to carry more than 13, 000 TEU’s. • This definition was informed by what leading shipping liners such as Maersk, China Shipping and MSC consider to be mega. • Such a view is also affirmed by the (OECD, 2015) that any vessel with a capacity of 13, 000 can be considered mega. It is also important to note, that the term mega vessels has evolved with time and place. March 2013

  7. PROBLEM STATEMENT? Even with the evidence that container vessels have been increasing in size on a yearly basis. Reality on the ground demonstrates a mismatch between port capacity and the growth of container vessels calling at ports with specific focus to the port of Durban. March 2013

  8. SCOPE OF THE PAPER:PORT OF DURBAN March 2013

  9. STUDY DESIGN March 2013

  10. March 2013

  11. LITERATURE ASSESSMENT:JUSTIFICATION OF THE SELECTED SCOPE OF CHINA PORTS • The literature review focused on the top three performing ports in China in terms of container throughput growth and also the average vessel size handled • The ports are Shanghai, Ningbo and Qingdao March 2013

  12. LITERATURE ASSESSMENT: (cont..) March 2013

  13. 6 LITERATURE ASSESSMENT: GOVERNANCE March 2013

  14. 6 LITERATURE ASSESSMENT: OPERATIONAL March 2013

  15. Durban Port Experience with Mega Ships According to Dyer (2014) ports like Durban are sporadically attracting vessels with a carrying capacity of over 12, 000 There has been a decline in the number of vessels arriving on South African shores since 2003, decreasing from 14 300 per annum to approximately 12 122 in 2014, as shipping lines have sought to stay competitive by running and deploying larger and more fuel-efficient vessels instead of many smaller-sized vessels in pursuit of economies of scale and greater efficiency (TPNA, 2014). There is therefore mounting anecdotal evidence that the port of Durban is progressively attracting bigger vessels, especially since shipping liners base their trade on the shipping route rather than a specific port. March 2013

  16. Analysis of Durban Port The Public and private sector market share for major service categories is skewed towards Transnet, thus meaning that Transnet currently provides a large portion of the infrastructure services especially in container handling, providing upwards of 96%. Thus, indicating a need for a broader framework that will accommodate more private investment to offer additional services that can be responsive to the changing requirement of the port environment. There is an imbalance in terms of terminal capacity. Based on international experiences it has been proven that balancing terminals infrastructure provision has the potential to lead to an improvement of capacity and productivity of the port It is against such backdrop that a conceptual framework was developed for purposes of ensuring that as ports plan to grow capacity, they also make the right investments. March 2013

  17. CONCEPTUAL FRAMEWORK March 2013

  18. CONCEPTUAL FRAMEWORK March 2013

  19. Conclusion March 2013

  20. Thank You March 2013

  21. CONCLUSIONS March 2013

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