Key success factors for the implementation of an inland port in Cape Town

Richer, Raphael (2010-12)

Thesis (MBA)--University of Stellenbosch, 2010.


According to the 6th State of Logistics Survey for South Africa (2009: 5), logistics costs for 2008 reached R339 billion, equivalent to 14.7% of GDP. Transport represents 50.4% of these logistics costs compared to a world average of 39%. This major gap between South Africa and the world average shows that there are inefficiencies in this domain that need improvement. This report focuses on the issues faced by the port of Cape Town, the benefits that could be generated by the implementation of an inland port in the Cape Town area and the key success factors for this implementation. The Centre for Supply Chain Management of the University of Stellenbosch created a forecast model for South Africa and expects a demand of over 2.4 million Twenty-foot Equivalent units (TEUs) in 2039 for the port of Cape Town with a current throughput of 740,000. In 2012, this capacity will reach 1.4 million TEUs thanks to an on-going project that includes the widening of berth, investment in equipment, training of operators and a better utilization of the available storage space. The port therefore has to find a solution to increase a throughput on the long term. Along with capacity, the port is facing other issues such as low productivity, poor infrastructure and congestion in the port area that causes increased delivery time and trucking costs. The inland port has to bring solutions to these issues. Capacity must be addressed with a large piece of land that can accommodate growing volumes and also large investment in equipment and training to increase the productivity and therefore the throughput of the supply chain. In order to decrease congestion in the port area, the inland port has to be located out of the city in an area that can sustain growing traffic. Belcon is a Transnet Freight Rail facility located in Bellville that can offer sufficient storage capacity in a low traffic area. Investments must be made in order to increase its throughput but it has the potential to absorb a large part of the flows going through the port of Cape Town and a management with the will to develop the inland port concept. At the same time, this inland port is an opportunity to develop intermodal transport for a more sustainable transport system in South Africa. Belcon being a TFR terminal, it is the best location to implement this inland port and offer a competitive intermodal solution for the stakeholders of the South African transport industry.

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