Challenges Faced by Namport as a Logistics Hub in Windhoek
Namport, a crucial link in the logistics hub in Windhoek, faces challenges such as declining vessel visits, decreasing competitiveness, and unrealistic investment assumptions impacting cargo handling and transshipment. The data indicates a need for strategic improvements to enhance its position as a preferred hub for landlocked SADC states.
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Namport within the context of a logistics hub 26 March 2019 House of Democracy Windhoek
AGENDA Preferred logistics hub policy Provide landlocked SADC states an opportunity to import and export via Namibia Infrastructure investments The reality A costly policy? Logistics hub Namport a crucial link
Vessel visits are declining since 2003 Vessel visits at Walvis Bay and L deritz 4000 Number of vessel visits at the ports 3500 3000 Vessel visits 2500 2000 1500 2000 2005 2010 2015
Namport becomes less competitive Vessel visits at Namport and Durban 5000 4500 4000 3500 3000 Vessel visits Namport 2500 Durban 2000 1500 1000 500 0 1996 2000 2005 2010 2015
Total cargo handled peaked in 2012 Cargo handled at Namport in '000 tons Decline in the transhippment of containers since 2012 7000 6000 5000 Landed 4000 In '000 tons Shipped Transship 3000 Total 2000 1000 0 2000 2005 2010 2015
The maximum was never reached with the existing container terminal Total number of Containers handled at Namport (Walvis Bay) 400000 350000 300000 Number of containers 250000 Containers 200000 150000 100000 50000 0 2000 2005 2010 2015
Trans-shipment peaked in 2012 with 1.536 million tons Transshipment in tons 1800 1600 1400 1200 In Thousands 1000 Transship 800 600 400 200 0 2000 2005 2010 2015
The assumptions for the investment in the new container terminal were unrealistic Total Containers (TEU'S) handled in the Walvis Bay Port 900 800 700 600 TFU's in '000 AfDB Forecast Difference of 527 000 tons 500 Namport Actual 400 300 200 100 0 2009 2011 2013 2015 2017 2019 2021 2023
Profitability is under pressure due to a decline in volumes and the investment in the new container terminal Return on Assets of the Namport Group 18 16 16 14 12 10 % Percentage 10 8.5 8.1 7.9 ROA 7.4 8 6.7 6 5.5 6 4 2 1 0.8 0 2007 2009 2011 2013 2015 2017
The challenges Namport is facing within the logistics supply chain Port cargo handling charges are high Geographic location not strategic and long distances to markets Small domestic market Port not strategically located close to major trade lanes Investment policies and taxation not favourable The port of Lobito is gaining strategic importance and Durban is more competitive The burden of the loans for the new container terminal on the future cash-flow of Namport and a weaker balance sheet regarding the debt to equity ratio Walvis Bay is a feeder port and not a hub port A hub port handles at least 2 million containers and the 60/40 principle should apply and not the 10/90
Recommendations The preferred logistics hub policy should be reassessed Cabinet submissions must be professional and outline the risks of major investments Major capital projects should be halted (e.g. N$ 5.5 billion railway line to Kransberg) if not accompanied by a professional cost/benefit analysis The governance of Namport should be improved by appointing experts in logistics The port tariffs should be compared regionally to determine the competitiveness of Walvis Bay and L deritz Lower tariffs for industrialisation and exports should be considered (e.g. charcoal)
