VIEWPOINT -South African Ports Face Challenges and Opportunities Amid Surge in Cape of Good Hope Rerouting

: Viewpoint - General; 10 July 2025; Hits: 342; Rating:

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The World Shipping Council (WSC) and the South African Maritime Safety Authority (Samsa) have reported a significant increase in vessel traffic rerouting around the Cape of Good Hope (CoGH) due to ongoing security concerns in the Red Sea, driven by Houthi attacks disrupting Suez Canal transits.

This shift, while presenting economic opportunities for South African ports, has exposed critical challenges in port management, financial stability, and maritime safety, raising concerns about the country’s ability to capitalize on its strategic position as a potential major hub for international shipping services.Surge in Vessel Traffic and LossesData from the WSC indicates that vessel traffic around the CoGH surged by 191% in 2024, driven by shipping companies avoiding the Red Sea, where Houthi attacks have targeted commercial vessels since November 2023. The Suez Canal, which typically handles 12–15% of global trade, saw a 66% drop in ship transits by mid-2024, with container ship transits falling by 67%. Rerouting via the CoGH adds 4,000–6,000 nautical miles and 10–15 days to Asia-Europe journeys, increasing fuel costs, emissions, and operational risks.

The WSC notes that the region’s hazardous maritime conditions, including rough seas, contributed to approximately 200 container losses in 2024, highlighting safety challenges.South African Ports: Opportunities Amid Inefficiencies The rerouting has boosted demand for bunkering (refueling), restocking, and crewing services at South African ports, particularly Cape Town and Durban. This presents a significant economic opportunity, with bunker fuel prices in Cape Town rising 15% to nearly US$800 per ton by early 2024. President Cyril Ramaphosa emphasized South Africa’s strategic position to provide these services, potentially stimulating local economies. However, inefficiencies and financial troubles at ports like Durban, Cape Town, and Ngqura—ranked among the worst-performing globally in a 2022 World Bank index—hinder the country’s ability to fully capitalize on this windfall.

Port congestion has been a major issue, with Durban seeing a 328% increase in containership arrivals by March 2024, leading to backlogs of up to 79 vessels and 61,000 containers in November 2023. While conditions have improved, with waiting ships at Durban reduced to 12 by January 2024, challenges persist due to red tape, inadequate facilities, and limited cargo-handling capacity. The closure of Algoa Bay’s bunkering zone has further strained Cape Town’s infrastructure, increasing bunkering activity but exposing logistical shortcomings.

Financially, Transnet, the state-owned entity managing South Africa’s ports, reported an $87 million half-year loss in 2023, exacerbating concerns about sustainability. Poor management and outdated infrastructure have limited the ability to handle the surge in traffic efficiently, with deep-water ports like Durban and Cape Town struggling to service large container ships.

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Maritime Safety and Environmental ConcernsSamsa has reported an escalation in maritime accidents, including groundings, sinkings, and container losses, attributed to the CoGH’s rough seas and increased traffic. The authority is mandated to conduct a risk assessment of Aids to Navigation by March 31, 2025, to evaluate traffic volumes and risks. Expanding the Oceans and Coastal Information Management System could enhance vessel monitoring and response to accidents or illegal activities, which are likely to rise with increased traffic.

Rerouting also raises environmental concerns. The longer CoGH route increases fuel consumption and greenhouse gas emissions by up to 70% for some round trips, complicating the shipping industry’s decarbonization goals under the International Maritime Organization’s 2030 and 2040 targets. The EU’s Emissions Trading System, applied to maritime emissions since January 2024, adds costs of approximately $400,000 per voyage for large container ships diverting around Africa, further straining operators.

Potential as a Major Shipping HubDespite these challenges, South Africa has a unique opportunity to become a major port service provider for international ships, particularly as the Red Sea crisis, ongoing since late 2023, shows little sign of resolution. Major carriers like Maersk, MSC, and Hapag-Lloyd have announced continued CoGH routings into 2025, citing persistent security risks. South Africa’s ports could serve as vital nodes for regional and international commerce, especially within the African Continental Free Trade Area.

To seize this opportunity, experts urge significant reforms. Investments in port infrastructure, cargo-handling capacity, and trade facilitation measures are critical to reduce congestion and improve efficiency. The government’s plan to increase private sector participation, such as the 25-year joint venture with International Container Terminal Services Inc. to upgrade Durban’s Container Terminal Pier 2, is a step forward. Additionally, positioning South Africa as a green fuel hub could align with global decarbonization trends, attracting investment despite the closure of offshore bunkering due to customs issues.

The Red Sea crisis, compounded by Panama Canal droughts and Black Sea disruptions, underscores the fragility of global trade routes. South Africa must balance short-term economic gains with long-term strategic improvements. Policymakers are urged to expedite pending bills on marine pollution, port governance, and shipping standards to enhance safety and competitiveness. Failure to address inefficiencies could lead to missed opportunities, especially if Suez Canal transits resume following reported stabilization in early 2025.

South Africa stands at a crossroads as global trade routes shift due to Red Sea tensions. While the surge in CoGH traffic offers economic potential, poorly managed ports, financial struggles, and safety risks threaten the country’s ability to become a major maritime hub. By investing in infrastructure, enhancing safety frameworks, and fostering public-private partnerships, South Africa can mitigate losses and position itself as a critical player in international shipping, ensuring safety and sustainability are not compromised in the face of global challenges.

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