QUESTION 1

Use the study guide and the prescribed book for guidance in answering the questions. A detailed discussion is required, link theory with the case study when answering the questions below. ½ a mark will be awarded for each discussion.

Case study: Maritime industry of South Africa (SA)

The supply chain of South Africa’s maritime industry is vital for the country’s economy, particularly through its ports and coastal trade. South Africa’s coastline spans over 2,800 kilometers, providing access to the Atlantic and Indian Oceans, and offering numerous opportunities for maritime activities. Here’s an overview of the main components and stakeholders involved:

Major Ports in South Africa (SA)

Durban              One of Africa’s largest and busiest ports, serving as a significant gateway for containerized cargo.  It is the busiest container port in Africa, handling over 60% of South Africa’s container traffic.

Cape Town       Known for handling imports and exports of various goods, including agricultural and  industrial  products,  especially  fruit,  and  an  important  stop  for  vessels traveling between the Atlantic and Indian Oceans.

Port Elizabeth (Ngqura Richards Bay Saldanha

Bay

Important  for  bulk  cargo,  including  the  automotive  industry.  It  is  the  key  for vehicle  and  bulk  exports,  with  Ngqura  being  a  deepwater  port  positioned  for transshipment.

One of the world’s largest bulk coal export terminals, also handling other bulk commodities like minerals.

Primarily focused on bulk exports, including iron ore.

The Transnet National Ports Authority (TNPA) manages and maintains these ports, which are critical to the maritime supply chain. South Africa is connected to global shipping routes, with various international shipping lines operating between the country and key trading partners such as China, Europe, and the Americas. Major shipping lines include Maersk Line, MSC (Mediterranean Shipping Company), and CMA CGM. These shipping lines provide container and bulk transport services, linking South African exports like minerals, agricultural products, and manufactured goods with international markets. A range of logistics service providers support the maritime supply chain in South Africa, ensuring efficient transportation, warehousing, and distribution. This includes companies offering freight forwarding, customs brokerage, and warehousing and distribution services. The maritime industry in South Africa handles a variety of products, including bulk commodities like coal, iron ore, manganese, and agricultural products for exports, and machinery, electronics, chemicals, and refined petroleum products for imports.

South Africa’s maritime supply chain is regulated by several bodies, including the South African Maritime Safety Authority (SAMSA), Customs and Excise managed by the South African Revenue Service (SARS), and Transnet national ports authority (TNPA) and Transnet Port Terminals (TPT).

However, South African ports face challenges such as port congestion and aging infrastructure, which can slow down the supply chain. For example, in November and December 2023, severe backlogs at the Port of Durban left around 79 vessels and over 61,000 containers unattended due to operational challenges, equipment failures, and bad weather. The Port of Cape Town also faced similar issues, with an estimated 46,000 containers stuck at the Ports of Ngqura and Gqeberha. These delays disrupted the supply chain distribution system and increased costs. There is increasing pressure to reduce the carbon footprint of the maritime sector, with opportunities for investments in green logistics. Changes in global trade patterns, such as shifts in supply chains due to geopolitical tensions, impact the volume of goods moving through South African ports. In summary, South Africa’s maritime supply chain is supported by a well-developed port network, international shipping lines, and a range of logistics providers. However, it faces challenges like infrastructure constraints and the need to align with global trends, such as sustainability in shipping.

QUESTIONS

1.1 The case study highlights the challenges facing South African ports, such as port congestion and aging infrastructure, which lead to increased costs. Advise the management of major ports in the SA Maritime Industry about seven factors that drive transportation costs, which they should consider in their operation. Support your answer with examples from the case study.

1.2 Discuss automated handling systems that are key for Marine industry. Support [6 marks]

your answer with examples from the case study. 3 marks for theory, 3 marks for application

1.3 Discuss the economic benefit of warehouse in line with the Maritime Industry of SA. Support your discussion with examples from the case study.

1.4 Elaborate on the type(s) of warehouse suitable for Maritime industry of SA. Support your answer with examples from the case study. 1 mark for theory, 1 mark for application.

Answers to Above Questions on Maritime Industry

Answer 1: An analysis of the maritime industry in South Africa indicates that the transportation cost in the industry is affected by several factors and the most important one is the management of important South African ports like Durban, Cape Town, and Port Elizabeth. There is a stronger requirement to achieve optimisation over their operations. The issue of Port congestion and aging infrastructure and high level of equipment failures are the major problems identified in the South African maritime industry.

answer
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