Critical Issues in Maritime Studies: Importance for Regent Business School

1. CRITICAL ISSUES IN MARITIME STUDIES: AND WHY IS IT IMPORTANT FOR REGENT BUSINESS SCHOOL TO OFFER THIS REGENT BUSINESS SCHOOL SEMINAR OCTOBER 2014 Jack Dyer Unit for Maritime Studies, University of KwaZulu Natal

2. OVERVIEW • CRITICAL ISSUES IN MARITIME STUDIES: • DURBAN’S PROJECTED PORT DEVELOPMENT • GLOBAL FUTURE OF SHIPPING • CUSTOMS MODERNISATION • WHY IS IT IMPORTANT FOR REGENT BUSINESS SCHOOL TO OFFER THIS • THE SOUTHERN AFRICAN CONTEXT

3. Proposed Curriculum Issues In Maritime Studies: • ANALYSIS OF SEA FREIGHT MARKETS • PORT ECONOMICS i.e. Port Expansions, Developments • CUSTOMS THEORY AND ADMINISTRATION • INTERNATIONAL TRADE • FREIGHT FORWARDING AND LOGISTICS • INTERNATIONAL BUSINESS TRANSACTIONS IN SHIPPING • ADMIRALTY LAW • MARITIME STUDIES - EMPLOYABILITY SKILLS/ Equipment Training • CARRIAGE OF GOODS BY SEA • SHIPPPING • Climate Change; Oceanography; Maritime Sciences

4. CRITICAL ISSUES IN MARITIME STUDIES: • Climate Change • comparatively little is known about the potential impact of climate change on shipping, seaports and maritime economies themselves –about the phenomena themselves; the consequences; the costs and the benefits…. Few port authorities are asking the questions • Is this seaport and maritime economy so vulnerable? (How and why are ports so vulnerable and at risk? Is shipping prepared for this? Are there solutions and what is to be done –or is it too late? • What are the true economic consequences of global warming? Can we place a value on the uncertainty and the projected damage to lives and economies –not just mere port infrastructure? 2011 floods in Durban South Africa cost an estimated $100 million in damage alone! Can we afford –can we continue to afford to ignore the problem –to just be reactive to environmental circumstances? Considering just how much of the global population and globalisation depends on the future prospect and continuance of assuring the survival of the international supply chain network system of commerce, the problems cannot be ignored…

5. DURBAN PORT • Durban’s port accounts for over 70% of trade passing through South Africa’s ports. • over 4000 vessels calling per year, • A total of 2.69 million 20 foot TEU units of container traffic growing at 1.2% in 2013 and reefer cargo at 4.2% (Transnet January 2014), • Durban’s port in 2013 with an average of over 6800 containers per day, handled 87,711,170tons of general cargo (Transnet January 2014), • worth over R100 billion per year in terms of direct expenditure in the local maritime economy and value related activities (Booyens 2013). • The most significant port in the Southern Hemisphere and in Africa in terms of marine-related economic activity. • This port therefore comprises a significant part of not just Durban but the South African economy. Its future and potential inefficiency has significant implications for the future of South Africa, regional Southern Africa and global trade, but primarily for the local port community affected by any development.

6. The Current Port Layout and Facilities

8. The Proposed DIA Dugout Port Expansion

9. The Proposed DIA Dugout Port Expansion

10. The Proposed DIA Dugout Port Expansion

11. The Proposed DIA Dugout Port Expansion The DIA site (costing R100 billion (excluding Transnet’s R1.8 billion acquisition cost), over 25 years consists of… • 452 hectares of port related economic activity including storage warehouses/logistics (295 hectares for containers and 24 to transport) with a 9.2 million TEU total cargo capacity. • 16 berth container terminal (Africa’s largest; most modern) – 7.2million extra TEU’s of containerised cargo capacity. • A 3 berth vehicle (reefer cargo) terminal. • A 300 metre long, 4 berth liquid bulk terminal scheduled by 2050. • Associated marine and cargo infrastructure and services to facilitate port functions. • Road, rail, water, electricity, waste disposal and other infrastructure including a 450 MI per day desalinisation plant on site providing water for key port users. • 1.2 kilometre breakwater and excavation of sand dune by DIA/Isipingo Beach. • An eco-efficient designed Port Captain Control Office. • An Administrative Craft Basin. • In addition any port will require provision for Table 2 identified port functions

12. The Proposed DIA Dugout Port Expansion • Associated Development linked to the DIA Site: • Bluff to Highway Link Road(via Clairwood, Austerville and Merebank). • Sale of 92 Year Old Clairwood Racecourse for a Port Warehouse and Logistics Park. • N2 uMhlatuzana River Valley Highway Extension: 2012-2017 • M4 Mobeni to Clairwood Truck freight road route: 2014-2020. • N3 Highway Extension: Cato Ridge to Mooi River (2030), to Gauteng (2038) • R8.33 billion Transnet Rail infrastructure modernisation (R1.2 billion rolling stock) • R23.4 billion Transnet Durban-Johannesburg oil pipeline. • Total SA private sector’s R140 million modernisation of Island View Terminal and R90 million for Total’s oil fuel depot. • BP to modernise SAPREF oil refinery to Euro V standards (R2.5 billion). • New wastewater treatment plant for Isipingo – NATCOS tank farm serves as a barrier to further port developments.

13. The Proposed DIA Dugout Port Expansion

14. Projected Demand versus Supply for The Proposed DIA Dugout Port

15. GLOBAL FUTURE OF SHIPPING PROSPECTS • THE 2008 RECESSION • THE ARAB SPRING • SA/ OTHER AFRICAN/ GLOBAL PORT EXPANSION PROSPECTS, INTRODUCTION OF FREE TRADE ZONES e.g. Mombasa AND CABOTAGE • OUTSOURCING FROM CHINA TO LOWER WAGES IN INDIA, VIETNAM, BANGLADESH • EXPANSION OF BRAZILIAN SHIPYARDS • BRICS AND ASIAN DEMAND PROSPECTS • OPENING OF PANAMA CANAL FROM 2014 ONWARDS • ECONOMIES OF SCALE

16. GLOBAL FUTURE OF SHIPPING PROSPECTSCritical Issues in Maritime Studies Continued • Global Shipping and Confidence Indicators • Access to financing/ investment potential –SA and cabotage • Global Risk of Piracy, • Insurance • Regulatory expenses –MARPOL, SOLAS, ISPS, RKC, Arusha • Climate Change • Technological modernisation

17. WHICH FACTORS WILL INDICATE THE RECOVERY OF SHIPPING?Shipping Expectations and Confidence Indicators • Maritime transport’s future is reflected by market and investor confidence indicators e.g. the Baltic Exchange Dry Index dropped a record 637 point low in February 2013 from a record high 20 May 2006 (11793 points); February 2013 plunged to a historic low (918 points) December 2012 from 1548 in 2011 (2758 in 2010); representing depressed recovery from the perspective of dry bulk market investors discouraged for financing further oversupply • 31 January 2013; market indicators have improved –the European Ocean Freight Forwarding Index increased 54 points in a month and the HSB Manufacturing Index reached a two year increase high of 51.9 points. • The China Shipping Confidence Index as another measure of expectations rose 14.72 to 58.76% (24 January 2013)

18. A: Shipping Expectations and Confidence Indicators

19. Competitor African Ports

20. C: Global Piracy; Insurance and Other Risks Affecting Future Profitability • maritime piracy incidents (more likely to target higher value containership cargo than dry bulk); diminished to 297 vessels in 2012, -150 in Africa; (439 in 2011) –while the number of hostages fell from 802 in 2011 to 585 in 2012 especially, in the Horn of Africa/ Somalia decreasing to 75 attacks 2012 (2011 experienced 237) and West Africa’s Gulf of Guinea with 58 incidents (10 hijacking); • IMO direct piracy costs between 3.4 billion and 8.7 billion US dollars per year. • decreasing risk (IMO African Piracy Code adopted April 2013) • The maritime insurance industry incurred $50 -60 billion losses in 2012 –a 13% claim rise since 2011; causing the shipping industry to face projected average additional 7% rises in insurance premium costs and 15% minimum for marine reinsurance; • regulatory expenses including 1996 Convention on Limitation of Liability for Maritime Claims/ SOLAS amendments

21. WORLD AND SEABORNE TRADE GROWTH • Project modest seaborne trade growth of 3.8% forecast 2013 and 5.5% for 2014, compared to 12.7% (2010) and 5.9% (2011) and 4 % (2012), • World GDP growth indicated positive growth in 2012 (3.2%); projected to increase to 3.5% in 2013 and 4.1% in 2014 • Seaborne trade growth projected to increase 5 -10% over the next few years

22. WORLD AND SEABORNE TRADE GROWTH

23. WORLD AND SEABORNE TRADE GROWTH

24. WORLD AND SEABORNE TRADE GROWTH

25. CUSTOMS MODERNISATION • R300 million in customs modernisation by SARS –Single Window Concept, IT modernisation, AEO concept etc • Replacement of 1964 SA Customs and Excise Act with 2013 Customs Control/ Customs Duty Bill • International Security Requirements –Arusha, Johannesburg, Nairobi Conventions • Trade Facilitation with Securitisation –applicable to all businesses –imports and exports –terms of customs declaration requirements, duty payment, reclaiming etc

26. WHY IS IT IMPORTANT FOR REGENT BUSINESS SCHOOL TO OFFER THIS • Scarce Skills, Employment Prospects and Opportunities • Lack of African higher education competitiors • SA, Ghana, Egypt……………………. • THE SOUTHERN AFRICAN CONTEXT

27. WHY IS IT IMPORTANT FOR REGENT BUSINESS SCHOOL TO OFFER THIS • Scarce Skills, Employment Prospects and Opportunities • African port expansion,tender opportunities –DIA, transformation; value added and beneficiation, coastal surveying, cabotage • Lack of African higher education competitiors • SA, Ghana, Egypt……………………. • Funding/ investment opportunities • THE SOUTHERN AFRICAN CONTEXT –future of SA economy

28. THE SOUTHERN AFRICAN CONTEXTMaritime Skills and the SA Economy • 3000 kilometre coastline • Cape Route over Panamax route • Africa’s most significant port: Durban and maritime related industry –over 50,000 directly depend on it -transhipment hub for SADC • Source of maritime education • South Africa’s Transport Minister Dipuo Peterssaid the government must make sure that education and research in South Africa’s maritime sector be implemented as soon as possible and benefits our economy. It would be great to see South Africa becoming part of the 35 nations that enjoy a 95% league of the world’s trade vessels, sighted moving in and out of our waters. • One of our immediate tasks is to find solutions that speak to the maintenance of those in possession of scarce skills and competencies, particularly in the maritime sector. But in order for our maritime sector to develop and eventually grow, we need to focus and invest in the necessary skills and training.

29. THE SOUTHERN AFRICAN CONTEXTMaritime Skills and the SA Economy • NDP • SIP I/ II • EThekwini Maritime Cluster’s Strategic Vision, their 2013/2014 Spatial Development Framework, • KZN Provincial Growth Plan • 2014-2017 TETA Strategic Plan and Annual Performance Plan • January 2014 TETA Sector Skills Plan

30. THE SOUTHERN AFRICAN CONTEXTMaritime Skills and the SA Economy • National Skills Development Strategy • 4.1 Establishing a credible institutional mechanism for skills planning, 4.2 Increasing access to occupationally‐directed programmes, 4.3 Promoting the growth of a public FET college system that is responsive to sector, local, regional and national skills needs and priorities 4.5 Encouraging better use of workplace‐based skills development with the potential to follow 4.6 assist through community training initiatives to reduce the impact of climate change/ improve skills from existing and future research and 4.8 Building career and vocational guidance. In helping TETA, through current and future research in improving transport education and climate change, I would also be aiding them in achieving 4.7 Increasing public sector capacity for improved service delivery and supporting the building of a developmental state.

31. THE SOUTHERN AFRICAN CONTEXTMaritime Skills and the SA Economy • the 2011 National Development Plan Vision 2030 • which recognizes the potential of both transport and climate change as pivotal to the future of the South African economy, poverty eradication, employment and development. It will assist the plan through reducing Chapter 1’s top identified external risk to the future of the SA economy –climate change affecting the fifth risk –storms and 9th –flooding. Page 66 onwards of the Plan further illustrates the significance of 21st century potential environmental disruption to the SA and global economy and its survival if not mitigated. Chapter 3 identifies these sectors as key elements of employment creation • Chapter 5’s vision of a low carbon economy –especially for the transport sector, whilst improving profit, environment, quality of life, efficiency and training, complementing chapter 9’s desire to improve education

32. THE SOUTHERN AFRICAN CONTEXTMaritime Skills and the SA Economy

33. Standardised Stakeholder Requirements and Concerns

34. Standardised Stakeholder Requirements and Concerns

35. Finance/ Funding Sources –Education and Skills Development • NRF • SETA • TETA • SAMSA • Transnet/ private sector • International • Dept of Transport/ Trade and Industry • Consulting universities –DUT, UKZN etc… • Gal.co.za • eThekwini Maritime Cluster

36. The Gauteng-KZN Freight Logistics Corridor

37. Choices/ Opportunities

38. Choices/ Opportunities • FREIGHT HANDLING (WAREHOUSING AND DISTRIBUTION) • Cargo handler (loading and offloading vessels) • Crane operator • Warehouse manager • Logistic manager • Distribution manager • Transport manager • Transport co-ordinator • Stevedoring • SHIPPING PRACTICE(SHIP OPERATIONS AND AGENCIES) • Logistic managers • Logistic manager • Fleet manager • Distribution manager • Procurement manager • Purchasing manager • Supply chain manager • Ship’s agent • Marine insurance broker • Maritime lawyer

39. Choices/ Opportunities • CUSTOMS CLEARING AND FORWARDING • Customs clearance manager • Customs clearance clerk • Import and export practioner • Custom and excise officer • Freight forwarder • Training • Port operations • Shipping • Rail, Engineering • Surveying, Ship Repairs • Oceanographer • Marine scientist • Meteorologist • Business –tenders, construction, equipment • Financing and Investment • Real Estate speculation

40. The Industry • APL Logistics • APM-Maersk • Bidfreight Port Operations • CMA-CGM Shipping • Cosren Shipping • Elgin Brown, Hamer and Dorbyl Shipyard • Engen/SAPREF/Total Oil Refinery • Evergreen Shipping • FPT Logistics • Grindrod • Hamburg Süd • Hapag Lloyd • K Line • Mediterranean Shipping Company • MERSETA • MOL • Point/Royal Yacht Club and members • Southern African Shipyards • Toyota • Turner Shipping Agency • Wilson’s Wharf other Durban affected businesses etc.

41. The Industry/ Professional Association Contacts • Durban/ SA Chamber of Commerce • eThekwini Maritime Cluster • Island View/Maydon Wharf Leaseholder Association • Port Liaison Committee • SAAFF (South African Association of Freight Forwarders) plus members • SAAFF Harbour Carriers Division plus members • SAASOA (South African Association of Ship Operators and Agents) • SAMSA (South African Maritime Safety Authority) • South African Shippers Council plus members • South African Association of Ship Repairers and Builders • South Africa Maritime Lawyers Association • MIASA, AMD, Institute of Chartered Shipbrokers

42. The Industry/ Professional Association Contacts • GOVERNMENT • Durban Municipality • KwaZulu-Natal (KZN) Department of Agricultural and Environmental Affairs • KZN Department of Economic Development and Tourism • KZN Department of Transport. • National Ports Regulator Authority of South Africa. • National Department of Transport • National Department of Trade and Industry • SARS –Customs and Excise, IDC, SADB, SACU • PORT AUTHORITY/PARASTATAL • TNPA (Transnet National Port Authority) • Transnet Port Terminals • Transnet Freight Rail • Transnet Capital Projects • Dube City Trade Port • Coega Development Corporation

43. Any questions??? Feel free to contact me on jad38@kent.ac.uk