1. Session 2 on ports and shipping
services
Olivier Hartmann
Gaël Raballand

2. Port & Shipping services
Shipping and marine Terminals Logistics
Port marine operations are
largely under public port
authorities;
Very few exceptions, only
when the whole port is
under concession
• Bulk terminals managed
by private sector are
often dedicated
facilities with limited
public service
obligations
• Container terminals are
operated as public
service facilities
• Off-dock container
yards are fast growing
as quick-fix to port
congestion
• Private sector is the
norm for logistics
services, except very
few countries (Ethiopia
is the notable
exception)

3. Shipping services
• Liner shipping: Transformation of the industry
from end-to-end services into a network, with
connection of main services with local (=feeder)
service at main hubs
• Hub status gives better connectivity, lower rates
and shorter transit-time, but few ports in Africa
can claim that status
• Debate about the importance of national
shipping line was closed decades ago, but
sporadic attempts to revive flag reservation
(Ethiopia, Sierra Leone)

4. Container terminals: the starting point
• Container trade development was constrained in Africa:
– Growth in volumes exceeding terminal capacity in the near
future
– Increased pressure on container terminal efficiency:
• Increasing size of vessels demanding high productivity for container
terminals
• Complexity of the shipping networks with development of hub and
feeder ports: no port wanted to be perceived as a feeder port
• Assumption was that private sector had both the needed
knowledge and financial resources to deliver in this context
• As a consequence, accelerating trend to involve private
sector in terminal expansion and operations:
– Acceleration at the end of the 2000s: Banjul may be the only
West Africa port without concession!

5. Container terminals:
what happened (1)
• On the productivity side, progress was
recorded, but several public terminals offer
similar levels of performance:
Mombasa, Durban, Walvis Bay, Port-Louis
• On port dwell time, the terminal operator has
limited influence, so no reason to expect progress
there
• On capacity development, a mixed conclusion:
when and where there is economic
rationale, additional capacity development is
taking place, whether driven by public or private
sector.

6. Container terminals:
what happened (2)
• On prices, no decrease:
– Tariff structures have been preserved in the switch to
private operators, and even increased in some terminals
– Fixed costs are predominant: a given set of infrastructure
and handling equipment can handle a very wide range of
traffic
– Consequence: beyond a certain traffic threshold,
additional activity is just additional profit
• One area of possible concern: container terminals are
usually cash-cows for integrated operators. Extracting
them from the port authority may disrupt other critical
sections which were cross-subsidized

7. Container terminals: some key
questions
• Oligopolistic pricing behavior?
in West and Central Africa, two terminal operators control
over 80% of the terminal capacity (Bollore and APM
Terminals), frequently jointly.
=> From public to private monopolies at the regional level?
– Selection of operator is frequently ‘opaque’
– Lack of capacity on the public side to effectively regulate and
monitor
• Unrealistic commitments: projected capacity development
far exceeds traffic growth
• But logistics systems would probably have collapsed
without involvement of private sector
=> What should be a way forward for port operations?

8. Logistics services and dwell time
• Long port dwell time was
assumed to be the result of port
handling inefficiencies
• Reality is more nuanced:
– There is not one single pattern, but
several contrasted profiles
– When speed is desired needed, it is
usually possible
– Long dwell time usually occur:
• When it correspond to economic
optimum for trader (storage
strategies)
• Enterprise behavior plays a large
role
=> Need to adopt a broader view
than pure logistics efficiency
(handling pricing and customs
procedures are key – pre-arrival)
Quartile
Case1:Cameroun
Postarrival
Case2:Cameroun
Pre-arrival
Case3:Transit
Postarrival
Case4:Transit
Pre-Arrival
25% 10.5 4 7 2.5
50% 18 7.5 14 5.5
75% 30 14 27 9

9. Logistics and IT services
• IT solutions have been developed for the logistics industry
and control agencies:
– Customs systems,
– Community systems, with two broad types:
• Port community systems (focusing on the logistics process)
• Single Window Systems (focusing on the trade and documentation
process)
– Efficiency systems for optimization:
• Fleet management solutions / cargo tracking schemes based on GPS
tracking
• Terminal operations solutions
BUT risks occur when the process is driven by technical
solution over a needs assessment approach. Human factor
and incentives neglected when they actually matter most…