Walvis Bay profits from SA's red tape congestion

When Namibia set out – 17 years ago – to become the gateway to Southern Africa, it wasn’t taken very seriously. Now it’s increasingly likely that it will have the last laugh.

To most South Africans, Namibia is nothing more than a convenient and affordable holiday destination on our doorstep. And with good reason. It’s a wonderful country with otherworldly landscapes, abundant wildlife and the biggest night skies you’ll ever clap eyes on. One of the most popular spots is the quaint coastal town of Swakopmund, Namibia’s fastestgrowing tourist destination. Swakop draws visitors from all over the globe, with the incongruity of German colonial buildings built on the edge of an African desert, the allure of the treacherous Skeleton Coast and the promise of 1,500-year-old welwitschias growing in the so-called Moon Landscape. What Weiss-sipping, pumpernickel-munching tourists don’t know is that, barely a mile from the town’s iconic wooden jetty, an ever-swelling army of trucks is ferrying cargo from the port at Walvis Bay (35km away), through the outskirts of Swakop, and onwards to destinations all across Southern Africa.
The natural deep-water port at Walvis Bay has been prized by seafarers ever since the Portuguese first set anchor there in 1485. The Brits annexed it in 1884 and it was administered by South Africa for over a century – in fact we even tried to keep it as our own when Namibia declared independence in 1990. But only in the past five years has Walvis Bay started to fulfil its potential as a regional logistics hub. When the private-public partnership known as the Walvis Bay Corridor Group (WBCG) was established in 2000, the port handled about 30,000 6-metre containers – almost all carrying Namibian imports or exports. Last year 370,000 containers passed through Walvis Bay en route to places as far-flung as Lusaka in Zambia, Lubumbashi in the Democratic Republic of Congo, and Gaborone in Botswana.

With the Walvis Bay port currently undergoing massive expansion (by 2019 it’ll be able to handle one million containers annually), the Customs office having a reputation for efficiency and approachability, and Namibia boasting the best roads on the continent (the 2016/7 World Economic Forum Global Competitive Index rated the country’s roads 23rd in the world – above South Africa, Italy and the UK) – there’s a very real feeling that “the sky’s the limit for Walvis Bay”.

By identifying strategic corridors and bringing together key players from government and the private sector (both in Namibia and, through MOUs with neighbouring countries, across borders), the WBCG has been able to create an all-inclusive proposition where “unlike South Africa, everyone is pulling in the same direction,” says Mike Johnston, an independent logistics consultant based in Johannesburg.

It hasn’t been easy, says WBCG CEO Johnny Smith, who describes having to “literally clear the bush” to establish the corridors, and developing relationships with neighbouring countries “in the same way you’d treat a woman,” but he is proud to report that, in the past five years, “clients have been calling us, not the other way around.”

Global logistics comes down to two things – time and money – and the WBCG has both on its side, according to Gavin Thomas, the executive director of Capital Fisheries in Lusaka, Zambia. More than ten years ago the congestion, red tape and constant downtime in Durban led him to search for an alternative, and since first using Walvis Bay for rice (2006) and fish (2008/9) he “hasn’t looked back”. He’s grown his operation from five containers per month to between 40 and 50 and he’s even opened a trucking subsidiary which has close to 40 vehicles plying the Walvis Bay-Lusaka route. Thomas only uses Walvis Bay, even if he’s bringing in stuff from China or Thailand: while either Durban or Dar es Salaam would make more sense geographically, he finds the Walvis Bay route both faster and more affordable – and so do a growing number of his colleagues in landlocked Zambia.

This comes as no surprise to Smith, as Zambia – which is pretty much equidistant from Durban, Windhoek, Dar es Salaam and Walvis Bay – is currently the WBCG’s most successful market. There’s also been a marked uptick in traffic on the Lubumbashi route, but other markets have been less receptive.

Even though businesses trying to get product in or out of Gaborone, Johannesburg and Harare can easily save seven days by choosing Walvis Bay over Durban (especially when working with Western hemisphere countries), South Africa’s largest port still handles around seven times as much cargo as its Namibian neighbour. What’s more, the Angolan route has taken a knock due to the slump in oil prices and the multi-million dollar Walvis Bay dry port constructed by Sea Rail Botswana with the backing of the Botswana and Namibian governments has been under-utilised since its completion in 2014 – prompting Botswana’s Sunday Standard to describe it as a “white elephant getting whiter still”.

Smith is realistic about the challenges involved. “Logistics companies are stuck in their ways. Sometimes you can’t understand why a company uses a certain port,” he says, before explaining that it often comes down to the fact that all of the big decisions are made in Johannesburg.

Johnston agrees with this assessment of the industry, to a point, but notes that the WBCG’s concerted marketing efforts (“they’re at all the trade shows and in all the right journals”) are finally reaping rewards. “Walvis Bay is definitely on the map,” he says. The next step for Smith and his team is to persuade international companies who “don’t have ties to Johannesburg” to headquarter their African operations in Walvis Bay. While most of the big firms do have a presence in Walvis Bay, they are all at “branch office” level at the moment.

The other focus area for the WBCG is its over-reliance on road freight. At the moment less than 5% of the containers passing through Walvis Bay travel by rail, says Smith, when ideally “all bulk commodities” should travel that way. This rail problem cannot be marketed away: the same WEF report that reflected so brightly on Namibia’s roads ranks its railroad infrastructure as the world’s 50th best, ten places behind South Africa. Although Smith has noticed improvements in railroad maintenance and the quantity of rolling stock in the last few months, and there are plans to develop a rail link with Botswana, he is the first to concede that “a lot more needs to be done in this regard”.

While improved railroads would further improve the WBCG’s offering, they’re only one part of the overall package. “South Africa is meant to be the gateway to Africa,” says Johnston, but thanks to the power of the unions and crippling red tape, the region’s largest economy is “blowing that option”.

Businesses and governments are rightly looking for alternatives and although money is being ploughed into the ports at Maputo, Dar es Salaam and Luanda, to mention a few, Walvis Bay remains a very attractive option: “They have ample capacity and great management, and logistically it makes a lot of sense” says Johnston. “While we’re slugging it out with politics and border controls it’s a pleasure to work with people who are so accommodating.”

For now, Walvis Bay – which is about the size of Oudtshoorn – is still best known for the flamingos in its lagoon, and the ever-present stench from its fish-processing factories. But Thomas, who visits about once a month, reports seeing “improvements every time I visit, not just in the port and warehousing facilities but also in the town itself”.

Walvis Bay airport is serviced by several daily flights from Cape Town and Johannesburg and if things go according to plan the town will “be bigger than Windhoek in 20 years’ time,” says Smith. “Even 15 if things go really well.”

(A shorter version of this story originally appeared on OZY.com.)

The corridors at a glance

1.    The Trans-Cunene Corridor links the Port of Walvis Bay with southern Angola up to Lubango, over a distance of 1,600 km. Transit time from Walvis Bay to Lubango is four days.

2.    The Walvis Bay-Ndola-Lubumbashi Development Corridor extends into Zambia, the southern Democratic Republic of Congo (DRC) and Zimbabwe. The corridor runs via the former Caprivi Strip in north-eastern Namibia and enters Zambia via the Katima Mulilo bridge. Transit times to Lubumbashi (DRC), Lusaka and Harare are between four and five days.

3.    The Trans-Kalahari Corridor links Walvis Bay with Botswana and Gauteng and it also offers an alternative route into Zimbabwe. Transit times to Gaborone and Johannesburg are two days and getting cargo to Harare takes four days.

4.    The Trans-Oranje Corridor links the ports of Walvis Bay and Lüderitz with the Northern Cape Province of South Africa. Transit time to Upington is two days.


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Submitted by : Rick Lobb of Sunridge Park on 2017-10-04 09:57:49
Well done to Namibia, thinking outside the proverbial box is the way to go !! SA Ports, SA Customs and SARS will have to catch a B-I-G wake-up because Nam is busy taking business away from inefficient, bloated, red-tape and expensive SA government-run Ports Authority operations !!!


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