Urgent call for action on the Maputo Corridor

The South African Association of Freight Forwarders (SAAFF) and the Minerals Council of South Africa are calling on Government to take urgent steps to address severe congestion at the Lebombo/Ressano Garcia border post on the Maputo Corridor.

This comes in the wake of extreme delays in border-crossing times of more than three days in recent weeks, exacerbating a crisis that has been ongoing since the beginning of August 2021.

The greatest challenge to the border crossing is the lack of 24-hour operations, resulting in crossing times increasing from an average of 1 hour to over 20 hours, since 2019. Transporters confirm that border crossing times are the worst they have experienced in 15 years. The queue between Komatipoort and Lebombo is frequently between 7 and 15km. This has serious humanitarian consequences, as truck drivers sit in their trucks for hours at a time when temperatures are above 40 degrees Celsius – without access to food, water or ablution facilities.

With losses of revenue to the transport companies carrying transit cargo amounting to well over R1,3-billion between December 2020 and the end of October 2021, both the mining and transport sectors are losing confidence in the ability of the public sector to support trade on this strategic Corridor.

“These delays are resulting in loss of confidence, loss of business and threatening the stability and sustainability of trade, transport, employment and job creation in South Africa,” says Dr Juanita Maree, CEO of SAAFF. “Efficient corridors have a significant impact on the competitiveness of local business and regional economies, as they provide a measure of predictability, reliability and efficiency central to trade and logistics supply chains – which is key to providing access to markets.”

Calling for immediate intervention, SAAFF and the Minerals Council have outlined six ways forward:

1. Urgent, intentional and conciliatory bilateral engagements at the highest level to address the failure of engagement and underlying tensions.The latent antagonism between the two countries at operational level constitutes a significant barrier to trade and, ultimately, leads to additional time/cost, a deterioration of services to the users, and an overall inability to align with regional integration imperatives.
2. A 24-hour One-Stop Border Post (OSBP), with 24-hour operation, is a critical priority. The operating hours of the border, 06h00 to 22h00, are inadequate to deal with the volume of port bound minerals in transit (between 800 and 1 200 daily requiring border crossing, depending on the market pricing cycle) and the 24-hour operation of the Port of Maputo. Without synchronised landside logistics, the Port will not reach optimal efficiency, and the cost of short shipments and/or demurrage for vessels waiting in port for cargo at US$60,000 (R968 000) per day, is untenable. The Lebombo/Ressano Garcia border post must operate 24/7.  This has been an ongoing discussion for over 14 years, following the Heads of State agreement for this in 2007.
3. Currently, traffic management is seen as a non-essential service on account of COVID-19 regulations. 24-hour operations of traffic policing must be re-instated at the border precinct. Without this, poor driver behaviour seriously compromises the safety of other road users and directly impacts the efficiency of the Corridor.
4. Port bound transit cargo cannot be held ransom by general cargo exports and separation of this traffic must be facilitated urgently. The necessary infrastructure adjustments to the exit gate at Lebombo must be made as a matter of urgency.
5. Standard Operating Procedures (SOPs) for parking facilities on the N4/EN4 need to be put in place: The costs for use of the dry port at Komatipoort, commonly known as KM7, and the terminal at KM4 at Ressano Garcia, add significant costs to the supply chain, with little attendant value added for trucks using these facilities.  It is vital that the rationale and costs attached to these facilities are reviewed as a matter of urgency, and that charges are justified by compelling evidence showing improved efficiencies to border crossing times.  At present no Standard Operating Procedures exist for either facility. This opens the door for abuse and inconsistencies which do not serve the intended purpose of these facilities.  This must be rectified as soon as possible.
6. The establishment of a Public-Private Partnership Corridor management institution is urgent.The contribution made by the now-defunct Maputo Corridor Logistics Initiative (MCLI) was significant in facilitating increased trade on the Corridor. It was   instrumental in developing the capacity of the Corridor to service cargo demands and ensure predictability, reliability and efficiency in cross-border trade with Mozambique.

   The absence of a platform for engagement between the public and private sector stakeholders on the Corridor, the absence of consistent monitoring and communication, facilitation and integration of activities to support efficiencies, is another monumental non-tariff barrier to trade.

The Port of Maputo has held significance for South African exports since well before the 1970s, when approximately 40% of exports were sent via the then Port of Lourenço Marques. The shortness of the Corridor from production to port is its critical strategic and competitive edge. For this reason, significant volumes of chrome ore, ferrochrome and coal utilise the Maputo Corridor for transit exports through the Port of Maputo.

R93,975 billion and 20,731 million tons of chrome ore have been exported since 2020. The average tonnage exported per month during 2019 was 1,241 million tons, against actual exports since 2020 of 1,151 million tons, resulting in a cumulative loss at the end of June 2021 of R 2,874 billion, or 1,616 million tons.

Considering the intense competition for mining companies to retain markets and also maintain competitive pricing, supply chain costs must maximise the benefits of the shorter landside costs. This has not been the case in the past four months; three of which (August, September, and October) saw the longest delays and the poorest logistics productivity in 15 years on the Maputo Corridor.

SAAFF and the Minerals Council express concern over statements made last week on television by the Minister of Home Affairs, Dr Aaron Motsoaledi, that have further damaged the fragile relationships with Mozambique. He incorrectly blamed the dire congestion on Mozambique’s manual processing, creating the perception that Mozambique’s customs clearing process alone is responsible for the delays.

The Minister fails to understand the real reason behind the congestion and delays, which is the inability of the South African government to implement the 24-hour operations at the border post – promised as far back as 2007. Then Presidents Mbeki and Guebuza agreed, in a bilateral arrangement, to open the border 24/7. Fourteen years later, the discussion emanating from his Department is that this cannot happen because there is insufficient funding to cover the staffing of a 24-hour operation. This is akin to allowing someone to bleed to death because calling a doctor would be too costly.

“The public and private sector stakeholders on the Maputo Corridor are willing to work together to resolve the issues urgently, but will require the support of an enabling environment created by the public sector,” concludes Maree. “This can be done by urgently implementing solutions which are both rapid and effective in a co-operative, partnership approach. The damage to the people and economy of the region by the current calamity cannot be allowed to worsen further, when stakeholders are poised to work together to resolve the issues and ensure the best possible outcome for all.”