Transnet embeds Covid-19 ‘new normal’ in its operations, breaks up command centre
CAPE TOWN – Transnet is embedding the “new normal” of the Covid-19 environment for the staff of its freight and transport operations and is dismantling a command centre it set up during the earlier lockdown to make it part of regular operations.
This was according to Transnet chief executive Portia Derby, who spoke about the impact of the pandemic on the freight and logistics environment at an SA Transport Conference and International Road Federation-hosted webinar yesterday.
Derby said the pandemic had a big impact on trade flows. Some vessels had been delayed at Cape Town harbour due to infections among port workers. Sometimes, vessels would by-pass Cape Town on their return route, and vessels calling at South African ports faced problems in meeting their European port schedules.
At one stage, workers had to be brought in from Durban to help boost Cape Town’s port operations, she said.
She said the transport and logistics sectors still faced some tough months.
She questioned the view among many economists that gross domestic product (GDP) growth would suddenly recover to 3.1 percent in 2021, from the GDP decline of up to -9.3 percent that was expected this year.
She said virtually every country in Africa with which Transnet dealt had a large budget deficit and high debt, and the impact of the decline in the global economy – particularly in the US – the biggest driver of global consumption – was likely to affect the prospects for economic recovery in South Africa.
She said Transnet had set a five-year strategy of improving customer service, looking after employees, sweating assets, focusing closely on safety, and working hard on cost reductions, such as for electricity and fuel, and for procuring goods directly from manufacturers instead of relying on intermediary sales people.
Transnet Properties had become a separate division within the group, making it one of the biggest property groups in the country, and this should also help to strengthen the group in future, she said.
Abhishek Sharma, a senior director for the multi-donor non-profit trade organisation TradeMark East Africa, said economic forecasts for the East Africa region were not good, with for instance forecasts that African countries could lose 20 to 30 percent of their fiscal revenue.
He said there were significant disruptions to supply chains globally, as trade routes had become feared as conduits for Covid-19 infection.
Transit times in East Africa had increased by up to 60 percent, which had increased logistics costs. Warehousing costs had increased because of the measures against the pandemic.
At some East African border posts, truck tail backs were averaging 20km, and even 60km, due to a variety of factors, including lack of personal protective equipment or disinfection equipment, the variability of Covid-19 testing and other measures, and the impact of the disease on personnel.
Jens Hugel, the senior adviser for the International Transport Union, which represents about 3.5 million transport companies in 18 countries, said revenue among their members had fallen on average 40 percent, because of the pandemic. Because most of the companies were small and medium-sized enterprises, they did not have the resources to deal with a prolonged slow-down in trade, while they have received little support from international financial institutions.
He said governments should consider financial support, and tax and insurance waivers, and allow for maximum flexibility on control documents, such as visas, certificates and licences, for transport operators during the pandemic.