Posted by After nearly two years of legal challenges and uncertainty, Transnet and International Container Terminal Services formally signed the 25-year concession for Durban Container Terminal Pier 2, finally unlocking South Africa’s first major port public-private partnership and the promised R11 billion investment programme. Operational control will transfer from 2026.
On paper, it looks decisive. A global terminal operator. Long-term capital. New cranes, deeper berths, upgraded systems. After years of congestion, vessel queues, and reputational damage, the agreement signals an admission that the state-led model has reached its limits.
South Africa’s ports consistently rank among the least efficient globally in World Bank assessments. But this was not always the case. For much of the late twentieth century, Durban and its peers functioned tolerably, moving cargo with reasonable predictability despite structural inefficiencies. The decline has been gradual rather than sudden.
What changed was not a single failure but a slow erosion of system resilience. Container volumes rose. Ships became larger and more irregular. Maintenance and reinvestment lagged. Skills drained away as governance became more centralised and rigid. Buffers disappeared. By the time shocks arrived — cyberattacks, labour disruptions, extreme weather, the pandemic — they did not cause the collapse so much as expose a system already operating without slack.
The concession is therefore an acknowledgement that public capital and state operations alone have not delivered the turnaround promised for more than a decade. Private expertise is now being asked to do what years of investment could not.
This is where the uncomfortable questions begin.
Durban is not a small port with big ambitions. It is a big port with big expectations. Handling roughly 60 percent of South Africa’s containerised trade, it is the country’s primary maritime gateway and one of the most consequential logistics nodes on the African continent. Pier 2 alone accounts for around 70 percent of Durban’s container throughput and more than 40 percent of national container volumes. When Pier 2 works, South Africa’s supply chain breathes. When it struggles, the entire economy feels it.
And yet, despite billions already spent on cranes, berths, yards, and refurbishments, ships still queue offshore.
That fact matters. Because it suggests the problem Durban is trying to solve may not be the one it is investing in.
The instinctive diagnosis is execution. Labour instability. Weather events. Cyberattacks. Equipment downtime. All of these are real. All of them hurt performance. But their persistence points to something deeper. Ports are not linear machines where adding cranes produces proportional gains. They are tightly coupled systems where congestion emerges from variability, sequencing failures, and misaligned incentives across ships, yards, trucks, rail, customs, and information flows.
Private terminal operators can improve discipline inside the fence. They can raise crane availability, tighten maintenance cycles, and stabilise labour productivity. What they cannot do — on their own — is redesign the system around them.
This is what makes Durban’s concession more than a financing story. It is a test of diagnosis.
If infrastructure investment were the answer, performance would have improved before private operators arrived. If Pier 2 is the binding constraint, R11 billion may help. But if Pier 2 is merely where congestion becomes visible — where upstream and downstream failures collide — then even world-class terminal management will struggle to deliver national-level gains.
Before asking whether R11 billion is enough, the harder question is this:
Is Pier 2 the constraint — or simply the place where the system gives up?
Why African Ports Struggle: It’s Not a Capital Problem
When African ports underperform, the diagnosis is almost always the same: not enough investment. Cranes are old. Berths are shallow. Yards are too small. The prescription follows — spend more, build bigger, modernise faster.
That explanation is comforting. And incomplete.
The World Bank–S&P Global Container Port Performance Index ranks ports using a simple but unforgiving metric: how long ships actually spend in port. Not how many cranes exist. Not how modern the terminal looks. Just time.
On that measure, Durban sits at or near the bottom of the global table, ranked last among more than 400 container ports in recent editions. Other major South African ports cluster uncomfortably close to it. These are not small, undercapitalised facilities. They are among the continent’s largest and most strategically important gateways.
That alone should end the debate about whether scale or capital are the binding constraints.
By contrast, Africa’s better-performing ports are neither the biggest nor the most glamorous. Tanger Med stands apart, competing credibly on a global basis. Its performance reflects disciplined flow management, rail-first evacuation, enforced truck appointments, and integrated customs — not just modern infrastructure.
Port Said East benefits from a transshipment-heavy model near the Suez Canal, avoiding many inland coordination failures altogether. Dakar quietly tops Sub-Saharan Africa in recent CPPI editions, not because it is fast, but because it is consistent. Even Abidjan, a complex gateway port, has improved by tightening governance and reducing variability rather than endlessly expanding capacity.
The pattern is unmistakable. Africa’s worst-ranked ports are often its largest gateway ports, embedded in fragmented hinterlands with weak enforcement, unreliable rail, and permissive dwell-time regimes. Its better performers are either structurally simpler or system-disciplined.
Rankings do not tell the whole story. But when a port handling more than half a country’s containerised trade consistently ranks among the worst globally, the explanation cannot be weather, labour, or “temporary challenges”.
It has to be design.
Why Some African Ports Work—and Most Don’t
If Africa’s port problem were simply a lack of investment, performance would be uniformly poor. It isn’t.
Across the continent, a small number of ports operate with reliability and discipline. Others — often larger, better funded, and more strategically located — remain chronically congested and volatile.
Ports do not succeed because they are big.
They succeed because they are coordinated.
Tanger Med treats congestion as a cost, not a nuisance. Containers are priced to move, not to sit. Appointments are enforced. Rail evacuation works. Customs is integrated digitally. The port behaves as a flow system rather than a warehouse.
Transshipment ports benefit from simpler system architectures: fewer inland dependencies, fewer regulatory choke points, fewer opportunities for variability to cascade. Gateway ports inherit the full complexity of the state behind them — customs, cities, unions, road agencies, rail monopolies — and must actively manage that complexity or be overwhelmed by it.
Durban sits in the uncomfortable middle. On good days, crane productivity rivals global peers. On bad days, the system locks up entirely. Rail unreliability, road congestion, labour complexity, and fragmented governance introduce volatility that overwhelms terminal-level gains.
Durban is not inefficient all the time.
It is unreliable most of the time.
That distinction matters.
Lagos represents the failure mode at scale. Private terminals function reasonably inside the fence. Outside it, the port dissolves into truck queues, fragmented authority, and extreme dwell times. Containers arrive faster than they can leave — and the system chokes.
The lesson is consistent. Private terminals are necessary but not sufficient. Once yard density crosses critical thresholds, productivity collapses everywhere.
Africa does not have a port infrastructure problem.
It has a port systems problem.
The Real Constraint: Ports Don’t Fail at the Quay
If cranes determined port performance, Africa would already be fixed.
Most major African ports can move containers competently at the ship side. Ships berth. Cranes lift. Containers land. Berth productivity, measured narrowly, is rarely catastrophic.
The failures begin after the box touches the ground.
Ports do not fail at the quay.
They fail in the yard, at the gate, on the road, and on the rail.
Once containers stack up faster than they can leave, the system enters a nonlinear zone. Yard density rises. Re-handling increases. Truck turnaround times spike. Crane productivity collapses — not because cranes are broken, but because they are starved of space.
This explains why ports like Durban fluctuate between functioning tolerably and breaking down. On paper, nothing changes. In practice, small disruptions cascade. A rail outage. A labour slowdown. A customs backlog. Any one of these can tip the system over the edge.
Adding capacity at the quay without fixing evacuation often makes things worse. More cranes simply land more boxes into an already saturated yard. Capacity without flow is not a solution. It is an amplifier.
The best-performing ports understand this intuitively. They behave less like storage facilities and more like switching systems. Containers are incentivised to move. Variability is managed aggressively.
Port reform, in that sense, is never really about ports.
It is about whether a country can coordinate actors, price congestion honestly, and enforce rules consistently.
Why Private Capital Hits a Governance Wall
The Pier 2 concession has been framed as a turning point. And in some respects, it is.
Private operators are good at what they do. Equipment availability improves. Maintenance discipline tightens. Labour productivity stabilises. Pier 2 will almost certainly run better than before.
But there is a risk of overstating the effect.
Private capital can upgrade a terminal.
It cannot, on its own, fix a port.
A terminal is a production unit. A port is a system.
Across Africa, private concessions have delivered visible but limited gains. Nigeria’s Apapa terminals improved ship-to-shore productivity while overall port performance deteriorated. Mombasa moved ships faster while cargo continued to stall inland.
The reason is structural. Terminal operators are paid to optimise inside the fence. They do not control customs clearance, truck arrivals, rail reliability, or dwell-time incentives. In some cases, long dwell times even generate storage revenue.
Private capital amplifies the operating model it is placed into. If the model is coherent, capital accelerates performance. If the model is broken, capital makes the broken parts more expensive.
Durban risks the same outcome if governance remains fragmented. Without a single authority that owns congestion, prices it, and enforces discipline across actors, gains at Pier 2 will leak out into the system.
Ownership is not the problem.
Authority over flow is.
The Case for Privatisation — and Where It Runs Out
There is a serious counter-argument to everything above, and it deserves to be taken seriously.
Proponents of port privatisation would argue that South Africa’s problem is not misdiagnosis, but sequencing. You cannot coordinate a system until its core asset functions reliably. From this perspective, Pier 2 is the constraint. Cranes are unreliable. Maintenance has been inconsistent. Labour productivity has been volatile. Before pricing, enforcement, or system-wide orchestration can work, the terminal itself must first become predictable.
This argument is not poorly grounded. Global terminal operators have a strong track record of stabilising operations inside the fence. They bring maintenance discipline, operational cadence, capital depth, and executional focus that state-owned operators often struggle to sustain. In ports from Manila to Mombasa, private operators have raised berth productivity, improved equipment availability, and reduced unplanned downtime within relatively short periods.
From this view, the Durban concession is not a mistaken bet — it is a necessary first step. Fix the terminal, and the rest of the system will adjust around it. Rail will respond to predictable volumes. Trucking markets will organise once uncertainty declines. Customs reform becomes easier when physical flow stabilises. Governance problems become tractable once execution improves.
In other words, privatisation is not the solution, but the precondition for any solution.
There is truth in this. A dysfunctional terminal makes system-level reform almost impossible. No amount of pricing or coordination can compensate for cranes that don’t work or berths that cannot clear vessels. Pier 2 must improve. And it likely will.
Where this argument breaks down is in assuming that terminal reliability automatically propagates outward.
In practice, it rarely does.
Across Africa and beyond, there are numerous examples of terminals that improved while ports did not. Apapa’s private terminals moved containers faster at the quay while congestion outside the fence worsened. Mombasa achieved respectable ship-side productivity while inland evacuation remained the dominant constraint. In these cases, better terminals did not catalyse system reform; they simply poured more volume into unchanged bottlenecks.
The reason is structural. Terminals are price-takers in a broader system whose incentives they do not control. They cannot enforce truck appointments beyond the gate. They cannot compel rail reliability. They cannot reprice dwell time without port authority backing. They cannot override customs processes. They cannot discipline actors who benefit from delay.
In fact, improved terminal performance can make system congestion worse. Faster discharge fills yards more quickly when evacuation is unreliable, pushing density past critical thresholds and collapsing productivity across the port. What looks like progress at the quay accelerates failure elsewhere.
This is the core limitation of the privatisation-first argument. It treats coordination as an emergent property of execution, rather than as a designed outcome of governance, pricing, and enforcement.
Terminal privatisation is not wrong. But it is incomplete.
It improves what it touches. It does not automatically fix what surrounds it.
Durban’s experiment will succeed or fail not on whether ICTSI runs Pier 2 well — that is the easy part — but on whether the state is willing to do the harder work that privatisation cannot: pricing congestion honestly, enforcing movement, aligning incentives across rail, road, customs, and terminals, and assigning real authority over flow.
Without that, privatisation risks becoming another technically correct intervention placed inside a system that remains fundamentally unchanged.
And that is the real test of South Africa’s port reform — not whether private capital arrives, but whether governance follows.
Who Actually Benefits From Congestion
Congestion is often treated as an unfortunate accident. It isn’t.
Congestion persists because, for several actors, it is not a failure mode. It is a business model.
Long dwell times benefit cargo owners who use ports as cheap storage. Fragmented trucking markets benefit from uncertainty, where queues create rents and informal prioritisation replaces formal scheduling. Rail operators measured on utilisation rather than reliability face limited penalties for inconsistency. Port authorities collect revenue whether containers move or sit.
Even governance structures benefit from ambiguity. When no single actor owns congestion, no single actor can be held accountable for it. Responsibility dissolves across committees and mandates. The system fails collectively — and therefore safely.
Fixing congestion means redistributing pain. It means making delays expensive for those who currently benefit from it. That is always harder than buying new equipment or signing a concession.
Until congestion is understood as an incentive problem rather than an accident, reform will continue to fix parts of the system while the whole continues to fail.
Why This Matters Beyond Ports
It is easy to read this as a technical debate about cranes and yards. It isn’t.
Unreliable ports act like a hidden tax. They raise import costs, inflate working capital requirements, penalise exporters on reliability rather than price, and quietly shape the structure of the economy.
Firms can absorb higher freight rates. They cannot absorb unpredictability.
When lead times stretch and fluctuate, businesses hold more inventory. Capital is tied up. Small exporters are priced out. Time-sensitive industries never form. The economy drifts towards low-value activity not because ambition is lacking, but because precision is punished.
Port reform is therefore an industrial policy issue, an inflation issue, and ultimately a growth issue — whether it is recognised as such or not.
This is why Durban matters.
What Actually Changes Port Performance (and What Doesn’t)
Many celebrated interventions do very little.
New cranes help — up to a point. Deeper berths matter — until they don’t. Automation looks impressive — right until the first disruption. These investments improve local productivity while leaving systemic fragility intact.
What moves performance is less glamorous.
Reliability beats speed.
Evacuation matters more than discharge.
Pricing is policy.
Enforcement beats design.
Coordination outperforms ownership.
Performance is not built.
It is governed.
If Durban fails again, it will not be because the concession was too small or the cranes too slow. It will be because the operating model never changed.
If there is one lever that matters more than any other, it is pricing. Aggressively pricing dwell time changes behaviour faster than any crane or system. When waiting becomes expensive, containers move. When delay is penalised, actors coordinate.
That is the real test of Durban’s experiment.
Not how fast cranes move at Pier 2 — but whether the port is willing to make waiting costly.
The Supply Chain Lab 