African ports underdeveloped and inefficient

African ports continue to struggle with underdeveloped infrastructure and inefficient operations, according to a new report from PwC. It says statistics indicate that 90% of imports and exports in Africa are delivered by sea. With the global middle-class set to reach five billion people by 2030, global trade is set to continue to grow at an unprecedented rate. Reports suggest that global freighter fleet is expected to double in the next decade due to the growing consumption demands of the ever-increasing middle-class. With 30% of the world's remaining mineral resources and approximately 60% of the world's uncultivated arable land on the continent, Africa's relevance in the global food and resource transportation value chain is significant, suggests the report. “The success of Africa's ports and associated transport networks is critical to Africa's conversion of economic potential to economic success,” states PwC. “To adequately facilitate greater trade with the world, African ports need to embrace innovation, automation and simplification.” PwC warns: “Beyond fulfilling their respective countries' trade needs, ports act as gateways to landlocked countries such as Ethiopia and Chad, that have significant agrarian and raw materials export potential, and great need for imports of finished and processed goods from the East and West. “Without these gateways, landlocked countries that have much to offer in world trade are figuratively closed for shop.” It suggests: “If Africa is to play a meaningful role in world trade and benefit from the rapid global growth, its seaports will be key to ensuring that success. However, African ports face the primary challenges of underdeveloped infrastructure and inefficient operations, leading to significant losses in potential revenue.” According to PwC, of the 72% of world container throughput commanded by developing countries, Africa collectively only sees 1%. A hypothetical improvement from 1% to 3% would increase the economic value of trade by sea by a magnitude equivalent to the GDP of certain African countries. The professional services firm states: “There is clearly a need to drive improved performance at African ports if [the continent is] to take advantage of the economic promise that the future holds. The primary challenges shared by most African ports are long cargo clearance times; underdeveloped basic port and hinterland infrastructure; usage of dated equipment and low levels of automation; and container and cargo theft.” There are significant investments going into port infrastructure capacity expansion, including parking lot expansions, deepening of canals and the widening of basins. Infrastructure investment is however only one piece of the puzzle required to handle more cargo in a more efficient manner, says PwC. “The key to efficiency is for ports to do more with their existing resources, particularly those focused on moving cargo. By optimising the use of these resources, ports will not only improve their cargo throughput but also become more profitable.” According to SAP global performance benchmarking, ports that leverage technology to drive productivity improvements have a 36% higher operating margin than their peers. As an example, in Asia where ports are largely automated, the turnaround time for vessels – the time it takes to port, offload cargo, reload and depart – can be as little as seven hours, compared to the five-day average for an African port. Cargo vessels can also spend a full month longer in an African port than they would in an Asian equivalent. One of the key differentiating factors of leading global ports is the extent to which they have adopted emerging technologies. For example, IoT-driven smart logistics platforms and advanced analytics solutions that manage container theft, predict the failure of key equipment and reduce downtime, in real time, thereby increasing port throughput and protecting profit margins. By contrast, outdated technology and manual processes remain a burden for African ports, with most operators still relying on ageing equipment, disparate systems and a siloed approach to handling core processes and operations. The report concludes, to improve terminal operations, African ports need to adopt automation as a means of standardising and simplifying port operations. In addition, these ports require a centralised approach to managing processes, enabled by a single platform for all automation efforts. This will allow them to handle unusual circumstances by pre-empting potential business disruption, recommending remediation actions and facilitating communication between stakeholders across the port value chain, with no duplication of efforts or messaging, it suggests.

African ports underdeveloped and inefficient

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