Opinion: My vision for transforming TPT into a leading global port operator

11th January 2018

Opinion: My vision for transforming TPT into a leading global port operator

TPT CEO Nozipho Sithole

In this opinion article, Transnet Port Terminals (TPT) CEO Nozipho Sithole outlines what she sees as the key principles and values that will help to transform TPT into a 'Top 5' global port terminal operator in five years.

The top terminal operators globally account for about 30% market share in the world. According to Port Technology (2014), the world’s top five terminal operators by market share percentage are PSA International (market share for its global port projects was recorded at 8.7%), Hutchison Port Holdings (HPH) (7%), APM Terminals (5.5%), DP World (5.1%) and China Merchant Holdings International (3.6%).

Transnet Port Terminals CE Nozipho Sithole gives her views on what factors are key to making one an international terminal operator of choice.

Although South Africa has a sophisticated logistics industry, making use of some of the latest global trends in the field, we still have a long way to go before we can claim one of the top five port logistics’ services, globally. There are a number of internal and external contributing factors that make the global leaders in our field stand out from the rest.

According to RREEF (2009) there are two types of factors that influence the choice of terminal operator: port specific and macroeconomic variables. And when further drilled down, various studies in the area of ‘port choice’ have indicated that the main factors that emerge for terminal operators of choice are efficiency (as the most important factor) followed by cost, location and technology. However, they tend to differ in relative importance. Other factors that might influence the use of a specific port and/or terminal operator include the economy, industrial patterns, globalisation, trade, warehousing and/or intermodal agreements, fuel charges, taxes, inventory practices, shipping alliances, warehousing, economic regulation, government subsidies, environmental and safety policies, weight limits technology (Tongji; 1996) and private participation (Tongzon and Heng; 2004).

Shipping lines, especially, pay more attention to the operational efficiencies when selecting port and terminal services. And when shipping lines do have a clear preference for a terminal operator, the effect will be increased volumes and a higher level of connectivity. However trade growth and gross domestic product growth is also a factor.

The Chinese ports’ five-part strategy that led them to becoming best-in-class also reveals key learnings about what makes for a top terminal operator. They believe the key areas for improvement include increased efficiencies (which will lead to lower costs. leading to even lower prices for customers); the application of technology and innovation in the port terminal environment and linking to other stakeholders (as well as customers with market demand factors and having access to data and understanding the data also playing an important role); the location of current terminal operations and future global terminal operations; and finally - market and customer flexibility.

Looking at today’s criteria for winning best terminal operator awards, there are some obvious similarities of what makes these companies best-in-class, along with additional factors that seem to carry more weight for some than others. The CEO of the winning company at this year’s Asian Freight, Logistics and Supply Chain Awards in Singapore, put their success down to their focus being on “enhanced capacity, greater efficiency, innovation and ecofriendly operations” at their port. Whereas a Minister of Tourism stated that winning the Best Terminal Operator at the Seatrade Cruise Global conference in July this year was made possible through delivering efficient, reliable and flexible service to their customers, and that this achievement was also possible thanks to the synergy and effective cooperation between government and the winning terminal operator.

So in short, what does it take to become one of the top five terminal operators globally? I believe that what is required to become a market leader are reliable, cost effective service (a culture of doing what you say you are going to do), applying technologies that enhance asset use, safety, customer service, supply chain collaboration and leadership or people dedicated to serving customers.

The good news is that all these principles are within our own control. With a high performance culture and a comprehensive strategy in place, customer service and market share can be improved to the standard of those terminal operators enjoying the benefits of the top five status. External factors that are beyond our control include low levels of economic growth, positive industrial patterns, changing weather patterns and increased foreign direct investment, poverty and crime levels. We take these into account in our plans as we strive to achieve best-in-class standards in areas where we do have control.

There’s no denying that we as terminal operators are at the centre of the logistics chain and when our customers are satisfied, business thrives, so in turn does the rest of the value chain. TPT’s vision is to be among the Top 5 in five years to catalyse the positive growth needed in our country.