1. Ports and Corridor Performance Charles Kunaka Regional Coordinator – East and Southern Africa Sub-Saharan Africa Transport Policy Program (SSATP)

2. Outline Global perspective Tackling congestion  Ports  Other system components Corridor performance measurement Conclusions

3. Ports are important Ports in developing countries:  represent a key asset for economic development  serve landlocked countries – key components of regional trade corridors  play an important role as interface between sea and land transport systems Inefficiencies impact trade competitiveness Congestion at ports  an increasing problem  affects shipping schedules contributes to further congestion Constraints to capacity expansion:  Lack of scope to increase capacity  Weak inland transport links

4. Global container port capacity has reached critical levels North America 92% / 86% Central America & Carribean 82% / 73% South America 111% / 102% Africa 79% / 71% South Europe 82% / 78% North Europe 80.5% / 73.2% Middle East 98% / 89% South East Asia 108% / 91% Oceania 105% / 93% Subcontinent 87% / 57% Far East 109% / 105% Eastern Europe 92% / 73% Key:Based on Confirmed plans / Included unconfirmed expansions Source: Annual review of global container terminal operators – 2005 (Drewry) (Courtesy: M Donner WB) Global Total 99% / 89%

5. Factors driving growth External Factors:  Strong GDP expansion  Integration of regional economies with Asian suppliers  Political stability Internal factors:  Privatization of ports sector - increased investment  Improved shipping links with Asia  Increased ship size and transshipment  Terminal productivity increases Above factors are increasing pressure on port capacity

6. Port congestion regions Courtesy of Michel Donner, World Bank

7. Responding to Port Congestion Two main ways to address increasing problem of congestion:  Improve efficiency  Develop additional capacity

8. Port of Entry Rail Transit Multimodal Transfer Road Transit Border Crossing Road Transit Check Points International TransitNational Transit Final Clearance ModePortRailRoadRoad transitBordersICDsDestination Key players Customs Terminal operator Clearing agents Rail operator Truck operators Drivers Police Customs Clearing agents ICD Operators Customs Firms IssuesVolumes Capacity Performance Dwell time Volumes Performance Delays Truck utilization Delays Checkpoints Axle load Transit times Delays Dwell timeTime and money cost Tackling Congestion Along the Logistics Chain Emphasis should be on total logistics chain smallest capacity determines maximum capacity

9. Port capacity What are the determinants of port capacity?  Vessel access  Berth access  Terminal capacity Storage density – containers per acre  Gate capacity  Inland transport capacity Swift modal transfers are key to intermodal operations Ports do not typically control some of the key drivers  E.g. Peaking – periodic increases in activity Bunching of vessels which can create inefficiencies Since the 1990’s, governments have sought private sector involvement both for capital and operational experience But …  In Africa some 70% of the (container) port operations are still run by the public sector

10. PPP success stories (Source: Ocean Shipping Consultants - AICD)

11. Dwell Time TrafficCountryJulyAugustSeptemberOctoberAverage LocalKenya13.214.014.313.313.7 Transit Burundi36.547.315.121.530.1 Congo11.611.810.211.111.2 Malawi18.020.019.0 Rwanda12.413.914.513.513.6 Somalia12.312.611.711.512.0 Sudan15.312.816.018.015.5 Tanzania10.915.410.212.712.3 Uganda14.314.114.214.314.2 Zambia20.0 Dwell times vary by country of destination Dwell time is a critical factor influencing port capacity Container dwell time in ports in East Africa is the equivalent of at least 20% of sailing from the Far East!

12. Dwell times and corridor transit time Northern Corridor Transit Time - Road DaysUgandaRwanda IndicatorAverageSt. Dev.AverageSt. Dev. Port Dwell Time12.58.413.09.2 Land Transport7.56.310.05.4 Total Transit Time21.310.623.510.4 Northern Corridor Transit Time - Rail Destination ICD Containers Port timeRail timeTotal time Avg.St. Dev.Avg.St. Dev.Avg.St. Dev. Kisumu24015.8212.1411.584.8428.0914.21 Malaba61522.7813.1813.456.3737.3515.39 Dwell time is a large proportion of total transit time Overland transit is slow - system has to be improved as improvements are made within the port area

13. Developing additional capacity Increase port efficiency  Bad ports are the equivalent of 60% further away from markets for the average country!  Does the port organization and equipment match rated capacity? Expand ports  But most ports are surrounded by major cities Cities may benefit from ports, but Ports may also have a negative influence on cities such traffic congestion, air and noise pollution and security issues  Open land next to ports is not readily available Increasing trend towards Greenfield sites Develop new ports  How long does it take to plan and develop new ports, infrastructure?  Development of new port capacity in countries like China is fast, but in other regions it is much slower Utilize ICDs Use hub and spoke systems But, …  What effect do the last two have on transit times? Dar es Salaam Maputo Mombasa

14. Northern Corridor – Impact of Transit Yards on Transit Times Traffic passing through ICDs takes longer to be delivered Routing through a transit yard has limited impact on the reduction of the port dwell time  Net result is an increase in the inland transport time, ranging from 6 days for Uganda containers to 11 days for Rwanda containers  Main beneficiaries: road transport companies, their more efficient/recent trucks operating with faster turnaround times by avoiding the delays at the port, and inland, at the ICDs.

15. Hub and spoke systems Can bring cost advantages cf multi-call systems But in West Africa:  Not all ports suited to play hub role – due to draft and vessel size restrictions  Hub-and-spoke found to benefit only hub while increasing costs at other ports  transit times would increase at other ports  greater benefit would come from market liberalization (eg abolition of cargo reservation regimes) Source: G. Palsson (1998), SSATP Working Paper 31

16. Other corridor system components Constrictions can be identified Integration of Port and customs systems Railways and road transporters increasingly use tracking systems Check points along corridors add to transit times Need to enforce axle loads while minimizing delays Important to define core set of corridor performance indicators

17. Corridor Performance Indicators

18. Conclusions Important to adopt a total logistics chain approach to minimize transferring problems to a different location Overland systems with appropriate intermodal facilities:  Can contribute to addressing port congestion problems  Improvements provide flexibility to shippers on port selection  Can compete with coastal shipping services Enhance customs and other agency processes within ports and along corridor Utilize corridor-wide as well as component performance indicators  Monitor reliability of performance – can have a significant impact on costs Otherwise Grosman’s misquote becomes relevant: Complex problems have simple, easy to understand wrong answers!!

19. The SSATP 35 Countries 7 RECS AU/NEPAD, UNECA, AfDB

20. Where the SSATP is working

21. END – THANK YOU Publications can be downloaded from: www.worldbank.org/afr/ssatp or email : ckunaka@worldbank.org