How Can African Ports Overcome Structural Challenges?

In the previous article, we explored common challenges faced by the African ports sector, which, though multifarious, are often interrelated and create a self-perpetuating cycle. For example, lack of finance to fund port projects is the cause of poor infrastructure and outdated equipment, which in turn adversely impacts productivity and efficiency levels, which then deter Carriers from calling at the port and the EXIM community from utilising the port, making it difficult for the port authorities to raise finance for upgrades and expansions (due to uncertain financial viability and future prospects).

Cumulatively, these factors constrain the growth of the ports sector, acting as an impediment to African trade and preventing economies therein from achieving their latent potential.

A careful perusal of the nature of these challenges makes it abundantly clear that some are controllable while others (the extrinsic ones, emanating from macroeconomic and geopolitical developments) are beyond the port’s control.

This article examines the initiatives that ports and terminals can undertake to overcome these challenges, as well as steps to mitigate the impact of macro-level and geopolitical factors.

This article is the first of the two articles wherein we will delve into this topic and cover each point in comprehensive detail.

1) Port Upgrades and Modernisation Programs

Given the subpar state of infrastructure at most ports, embarking upon port upgrade and modernisation programmes is of the utmost importance. These can inter alia involve dredging to increase draught, constructing new berths, strengthening existing berth structure and various operational facilities therein, as well as modernisation programmes to overhaul obsolete equipment.

This will help improve operational efficiency and boost productivity at the port, enabling it to better perform its core functions of handling vessels and moving cargo.

An example is the port of Dar es Salaam in Tanzania, whose upgrade programme has enabled it to accommodate Post Panamax vessels of 300 mtrs length, pursuant to investments by the Government through the Dar es Salaam Maritime Gateway Project (DMGP).

2) Port Expansion Projects

Consequent to underinvestment in the African ports sector, capacity and infrastructure have not increased to match even the natural growth of cargo, with the result that several ports operate at close to their maximum capacity, and have no room for handling additional volumes, thus causing diversion of cargo to competing ports in the region.

Port authorities and operators therefore need to design structured expansion projects, taking into cognisance current and future requirements. These projects need to be comprehensive in their scope (to encompass all aspects that have a bearing on the port’s performance) and futuristic in their scale (taking into account growth forecasts). 

Ideally, before designing the expansion plan, the port authority or terminal operator should commission a market study to identify the underlying potential and the volumes that it can realistically translate into. The market study should take into consideration all possible sources of cargo, such as new manufacturing capacity, focus on the agro exports, transit cargo from landlocked countries that the port serves as a maritime conduit for, demand due to demographic and economic factors, etc., as well as threats from competing ports in the region.  

Once the study is complete and there is visibility into the future growth prospects of the port, we can with a reasonable degree of accuracy determine the expansion needs of the port, including capacity, yard area, storage area, equipment (Quay Cranes, RMGC’s, Reach Stackers, Empty Handlers, etc), reefer plugs, berth length, draught, manpower and skillsets, rail and road connectivity, evacuation processes etc, along with financing options and sources.

It is also advisable to ensure that the proposed expansion incorporates a reasonable degree of slack/ excess capacity, so as to cater to unexpected demand spikes. 

It is equally important to ensure that the plan is realistic, to avoid a situation where the expanded capacity and investments therein are not commensurate with projected volumes, which could lead to overinvestment and undermine commercial feasibility.

To the extent possible, it is also advisable to map trade patterns and commodity flows, so that the expansion plan is optimised to meet actual requirements. For example, if the port’s major trading partners are other regional countries (tertiary trade lanes), then the trade will be served by smaller vessels, rendering unnecessary significant outlay for dredging to deepen draught to accommodate mega vessels (of course, accounting for normal upsizing of vessels on the trade).

Another example is the provision of reefer plugs. If the government is prioritising growth of agricultural/ perishable exports (through the signing of FTAs with other countries or venturing into new markets), more reefer plugs will be needed.

3) Expansion of the Ports Sector: Develop Alternate Gateways

Most countries in Africa, especially in the sub-Saharan region, are served by their traditional gateway ports. This is the result of a lack of investments in new cargo handling facilities and the hitherto sluggish growth of their international trade. 

This poses a challenge in terms of the limited number of ports and outdated infrastructure. 

Another challenge emanates from the fact that population centres and economic hubs have developed around these ports, which over the years have evolved into bustling cities. The implication is that these city-ports have limited space for expansion, cargo movement by road is delayed due to traffic, laying new rail tracks is difficult, and the ports are beset by other constraints typical to city ports.

The solution is to identify alternate sites for new port developments, which will ease pressure on existing ports, allow construction of bigger and modern ports, and also promote equitable regional development. 

Suitable sites for new ports include locations that are proximate to industrial areas, agricultural belts, and mines, which helps reduce transportation distances and thus the TCO as well, making imports cheaper and exports more competitive. The development of new ports also economically uplifts local communities and supports equitable social development. 

This trend has been witnessed in several countries, an example being the proposed development of Bagamoyo port in Tanzania, as an alternative to its historical (and largest) port of Dar es Salaam. 

While planning new port developments, caution should be exercised with regard to the financial and operational viability, to narrow focus on projects where the aggregate benefits and probability of success are maximised.

In this context, Nigeria illustrates both these points. It has a diversified ports sector, comprising Apapa, Tin-Can, Lekki, Onne etc, which are spread across the country, thus helping reduce reliance on any one port and expanding the overall port capacity available.

At the same time, over the past few years, announcements have been made regarding the development of other new deep seaports, such as Bakassi Deep Seaport ($3.5 billion), Badgary Deep Seaport ($2.59 billion), Ibom Deep Seaport, and Ondo Port ($1.4 billion).

Though conceptualised with the intent of capitalising on the natural deep draught and seeking to serve domestic and transit hinterlands, as of now, not much material progress has been made on these projects. Given the existing capacity and the fact that other countries are actively pursuing similar projects, the construction of these other ports is fraught with considerable commercial risks, especially considering the high CAPEX involved. 

4) Invest in Modern Equipment

The quality of container handling equipment, such as cranes of various types, reach stackers, empty handlers, and terminal trucks (ITV’s), to a great extent, weighs upon the port’s productivity. 

In the case of an underinvested ports sector, the equipment is generally old and not properly maintained. This has ramifications for the efficiency of port operations.

The evolution of cranes to match increasing volumes and vessel sizes and growing demands for automation and eco-friendliness has been rapid.

Modern cranes are not only bigger, in terms of spread, reach and carrying capacity (enabling them to handle larger vessels) but are also far more fuel efficient, reducing carbon footprint. These cranes can also be operated remotely, from a Central or Remote Operations Centre (a control room in the terminal premises, as opposed to an operator in the crane’s cabin handling them manually) – as is the case in fully and semi-automated ports such as Shanghai and Rotterdam.

Several terminals also use electric trucks (used to move containers inside the terminal), further reducing emissions.

By investing in such modern equipment, African ports can garner the dual benefits of higher productivity and improved environmental performance.

A couple of examples include Doraleh in Djibouti, which in January 2024 inaugurated four new Malaccamax Ship-to-Shore cranes, enabling the port to handle ULCVs, and the Tanger Med port in Morocco, which has continued to invest heavily in STS and Yard cranes.

It is to be noted that both the ports cited above handle considerable transhipment traffic, an essential prerequisite for the handling of which are highly efficient operations, making it incumbent upon them to invest in modern equipment; however, even other ports across Africa, such as Abidjan (Ivory Coast) and Durban (South Africa), have been investing in new equipment.

5) Digital Transformation and Leveraging Technology

Port and terminal operations involve highly complex planning, incorporating a multitude of internal and external factors, some of which are not entirely within the terminal operators’ control (such as vessels arriving as per schedule, trucks with laden boxes reaching on time, punctual rail movement, evacuation of import boxes as planned, etc.). 

Planning also covers various aspects of port operations, like berth planning, yard planning, manpower and equipment planning, vessel stowage planning, etc.

Given the number of variables involved and the likelihood of delays, planning has to be accurate, flexible, and agile.

Besides planning, extensive coordination with multiple stakeholders and sharing of information are also necessary. These stakeholders include port authorities, customs, shipping lines, railway authorities and operators, shippers and consignees and agents thereof, and drayage providers.

Technology can streamline the planning process and automate information flows. 

Terminal Operating Systems (TOS) and Port Communication Systems (PCS) are important milestones in a port’s digital transformation. 

Port operators can also enhance their digital offerings by introducing container tracking functionalities, Telematics (to monitor Terminal Truck performance), WhatsApp Chatbots for answering customer queries, Payment Gateway Systems (PGS), Automated Gates, etc.

6) Implement Sectoral Best Practices and Innovations

A study of the global ports sector can highlight best practices followed by the top-performing ports globally, as well as innovative practices that streamline operations and cargo flows. 

Such practices and innovations can be evaluated for their suitability in the African/ national context and then implemented, as appropriate. 

Some such innovations include:

a) Fixed Berthing Window: where the terminal allocates specific pre-decided windows for vessels calling at the port. The terminal operator engages in discussions with Carriers, and they decide upon fixed timeframes within which the Carriers’ vessels will call at the terminal and will be berthed at the agreed time.

For Carriers, this ensures that their vessels are assured of a berth on arrival and can plan their schedules in advance, thus avoiding the risk of vessels idling at anchorage while waiting for a berth. For the port, this is an opportunity to ensure assured business, with visibility to volumes and berth utilisation, enabling them to better accommodate ad hoc vessel calls around the fixed windows. Container terminals which implement the FBW concept can drastically increase efficiency, as was witnessed at the West African terminals operated by APM Terminals (including Apapa, Onne, Tema, and Nouakchott).

b) Truck Appointment System: to regulate the inflow and outflow of trucks from the terminal, thus helping reduce congestion at the terminal gates and within, and improve evacuation times. This also helps truck operators reduce idle time and waiting, enabling them to improve asset utilisation.

c) Gate Automation: A tech-enabled best practice, Gate Automation involves installing CCTV and RFID scanners at the gates, which capture container details and update them in the system, thus saving time and manual effort that would be required if container details were to be captured manually.

7) Invest in Learning & Development: Skill Development and Diversity

The lack of skilled manpower and an adequate talent pool can be addressed by creating robust Learning & Development programmes for existing staff and local youth. 

This helps upskill employees and also broadens the pool of maritime talent to meet future requirements.

Terminal management and soft skills courses can be conducted to create a management pipeline.

Enlarging the scope of these programmes to include local youth can also create awareness about career prospects in the maritime sector, thus attracting the best minds to work in the ports and terminals industry. 

Training to upskill and empower women promotes diversity and inclusion, and can help unlock an additional source of talent.

Terminal operators can also collaborate with national maritime institutes and reputed universities to conduct courses in diverse aspects of port management and offer internship opportunities to students.

With this approach, terminal operators can ensure that they have the right skillsets needed to increase efficiency and productivity.

A notable example is APM Terminals, who operate several terminals across West Africa. At its terminal in Apapa alone, APMT imparted training of almost 10,000 hours in 2023, hosting training sessions on a weekly basis, covering soft skills, leadership development, industry knowledge, regulatory & compliance, safety, and technical skills.

8) Develop Hinterland Connectivity: Road & Rail Network

A smoothly functioning port needs to be complemented by an equally efficient rail and road sector to fully realise the benefits of an integrated transport sector, where the logistics ecosystem is an optimal amalgamation of all modes of transport.

Failing this, any gains on the berth side will be negated by the lack of a correspondingly efficient rail and road network.

As we explored in detail in the article on challenges facing the African ports sector, rail connectivity lags global levels in most countries in Africa, especially in Sub Saharan Africa. And if we remove South Africa and certain North African countries, the average penetration of the rail mode drops even further.

While the state of the road network is only slightly better, especially beyond the bigger urban areas, due to the sheer inadequacy of the rail network, road transport becomes the default mode of transport, catering to the majority of inland and cross-border freight movement. 

It is therefore unsurprising that the inland transport leg is plagued by all the problems that are the inevitable concomitant of a sub-par and underinvested rail and road sector.

It is therefore imperative that countries focus on the development of a reliable rail and road network and allocate requisite funds for this purpose. 

This will not only accelerate cargo movement but also act as a force multiplier for port capacity, without needing additional investment (for the port), as the faster evacuation of containers will free up yard space, enabling the port to handle more volumes.

Another significant advantage will accrue from the strengthened connectivity with landlocked countries, placing ports at a relative advantage vis-à-vis regional competitors for attracting transit cargo.

9) Port Governance: Policies and Structure

Progressive governance and policy measures are pivotal in the growth of the ports sector. In this regard, Governments need to put in place structured policies for the ports and logistics sector, emphasising holistic development of the overall transportation industry.

Concession agreements need to be structured and equitable to evince interest from reputed private port operators.

Policies and regulations that are inherently discriminatory in nature and favour certain ports need to be re-evaluated. An example was a Kenyan government regulation (now withdrawn) that obligated transit containers to be cleared at the Naivasha ICD. While the intent was ostensibly to decongest Mombasa port, the ground-level impact was felt by importers and consumers in the form of higher costs, prolonged transit times, and elongated supply chains. 

You might also like to read-

• 10 Major Ports In Africa
• 10 Major Cruise Ports in Africa
• Challenges Confronting The African Port Sector
• 7 Major Ports of South Africa

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About Author

Jitendra has over 20 years of international experience in the Container Shipping, Ports and Logistics industry, spanning 3 diverse geographies, wherein he has been involved in the commercial and strategic aspects of the container business.

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