DEVELOPMENT OF COASTAL SHIPPING
2.6 COASTAL CONTAINERISATION (FROM 1977 TO 1985)
tonnage) ro-ro cellular vessel. This marked the beginning of a new era of boxed cargo movement along the coast.
SECTION B: MODERN COASTAL SHIPPING
This section deals with coastal shipping developments over the period between 1977 and 2010. It consists of four segments, namely coastal containerisation, coastal monopoly, shipping in the new millennium and the conclusion.
2.5 MODERN HISTORY OF SOUTH AFRICAN COASTAL SHIPPING
Unicorn Lines had by this time cornered for itself a niche coastal market and had also expanded its operations into developing countries. International southbound cargo was on the rise, and Safmarine held the lion’s share of its traffic.109 For the coast, the significance of trade expansion was that first, most of the large European vessels would not call at smaller Southern African ports such as Walvis Bay and East London. Second, European carriers generally used Durban as the terminal port. This resulted in the availability of large amounts of feeder cargo for the African eastern seaboard.110 It was also expected that the coast would benefit further because other groupings such as the South Africa-Far East Conference and later the US Conference had undertaken to adopt containerisation in the early 1980s. These operators would not call at all the ports. 111 The movement of cargo from the excluded ports would therefore cause a surge in coastal activities. The stage seemed set for unprecedented coastal trade prosperity.
The success of the coastal trade was not dependent merely on transshipments. Unicorn Lines enjoyed high-volume trades between Durban and Cape Town and Cape Town to Port Nolloth. The company began to provide a purely containerised service using two vessels.112 Its service to Port Nolloth was also thriving on the back of the discovery of Africa’s largest deposits of zinc, copper, and lead on the west coast. The chief cargo to Port Nolloth was fuel oil supplies for (diamond – mining) dredgers and dry cargo to mining and fishing communities along the west coast.113
However, the period was not without its challenges. The expected growth was stunted by political instability caused by Apartheid policies. The Soweto uprising of 16 June 1976 (as well as the Sharpeville insurgence in 1960) were probably foremost in the thoughts of the would-be investor looking to plunge into the prospective containerised South African trade. Inevitably South Africa suffered the backlash of economic sanctions imposed as a result of the unhealthy political environment. In the end, this translated to less coastal cargo for feeder services than predicted.
Even more disturbing was the fact that organised boycotts and sanctions against the Apartheid government affected virtually all the various sectors of business life, and
109 Ibid. 64.
110 Ibid.
111 Ibid.
112 Ibid. 119.
113 Ibid.
mining was among the most affected. Consequently, Gencor (formerly Union Corporation Limited) had to streamline its operations by selling its majority share in the parent entity114 of Unicorn Lines. However, Grindrod managed to buy that controlling stake for itself, thus establishing its name on the coast well into the foreseeable future.
Unicorn Lines was a formidable coastal shipping company by tonnage size and operational expertise. However, the company still had competitors to contend with.
There were three other coasters at the time, namely Rennie’s Coasters, Green R Line and Zambezi Africa Line. The first two soon disappeared in a consistently depressed market, leaving Unicorn and Zambezi in a duopoly. There were further competitive pressures from rail, albeit relatively small, and road transport, which had found a way of offering rates lower than profitable sea rates.115 The result was an unimpressive coastal trade trajectory.
In 1979 Zambezi joined hands with Unilever for the transportation of the latter’s products between Natal and Cape Town with an intermediary call at Port Elizabeth.116 The two companies operated a fully containerised service called Cape Natal Lines. The service enjoyed a 15% market share on the coast.117 However, in the now established tradition of competition elimination, Unicorn Lines eventually took over Cape Natal Lines in 1983. Consequently, the entire coastal share was in the hands of Unicorn Lines.
It will be remembered that the South African Railways (SAR) ships had provided the coastal coal service earlier between Maputo and the Cape and later between Natal and the Cape. The demand for coal, especially in the Cape, arose from supplies for steam locomotives, steam tugboats, coal-powered electricity stations, and also for general industrial and household use. The introduction of the first nuclear-powered turbine station in Koeberg in 1984118 sounded the death knell for the SAR ships. The station caused a sharp decline in the demand for coal, following less dependency on coal as a source of energy. The installation of the second Koeberg turbine in 1985 was the
114 African Coasters Holdings.
115 Ingpen (note 86) 64.
116 Ingpen (note 99) 232.
117 Ibid. 72.
118 Koeberg Nuclear Power Station, available at
https://en.wikipedia.org/wiki/Koeberg_Nuclear_Power_Station. (Accessed 26 May 2017).
proverbial nail in the SAR ships’ coffin. The SAR dispensed with its coastal coal service and sold all the assets used in this operation.
With the demise of the SAR ship operation, Unicorn Lines was the only coastal operator by the end of the millennium and virtually the most powerful coaster in Southern Africa. Significantly, the company’s rise to dominance occurred without direct government involvement and certainly without the protection afforded coasters in the cabotage trade.
2.6.1 Milestones of this period
Containerisation may not have delivered on all its promises by the end of 1985.
However, there were a few discernible milestones worthy of note that arguably marked this period as the crest of South African shipping both on the coast and on the high seas.
Cargo volumes on the coast witnessed a tremendous growth from a mere 0.4 million tons in 1953 to 2.1 million tons by 1981,119 and vessels of about 46 415 tons operated on the coast.120 The rise of Unicorn Lines to shipping eminence, which the company achieved in the 1980s, eventually served the long-held ambition of the provision of coastal services by a South African-owned coastal operator. Unicorn became the only operational member of the South African Coastal Conference from this era onwards.121 The company was therefore on a path to take advantage of the earliest upswing in feeder service when it occurred, as was evidenced in the following season of coastal development. Overall, the first decade of coastal containerisation introduced measurable efficiencies that translated to tangible profits for the South African fleet.
Progress over this era extended to other areas of maritime business. For instance, an improved South African shipping outlook predicated port expansion. Typical examples of this were the establishment of the Richards Bay122 port for coal and the expansion of the Saldanha port for its staple ores. Since the latter’s focus was exports, the venture would have served to ameliorate the country’s woes associated with balance of payments. Further progress was also achieved in public/private sector relations. The
119 Ingpen (note 99) 73.
120 Ibid. 214.
121 Ibid.
122 A. de V. Minnaar Richards Bay (1985) 17 Contrée 15–20 20 says the port was on its third phase expansion from 26 million tons capacity per annum to 44 million tons of coal per annum by 1983.
government’s collaborative work with both Safmarine123 and Unicorn Lines124 revealed a new approach to business conduct, one that prioritised common commercial goals above (sometimes trivial) non-commercial differences. Increased domestic tonnage and the rise in the number of international port calls created a demand for tugboat building.125 Local ship builders met the demand.126 These tugs were available for port service and for salvage operations. The country’s shipbuilding industry flourished and contributed to locally-produced tonnage of small container ships.127
The overall effect of this hive of activity would have been manifest in the corresponding skills development transferred to local crews, engineers, shipbuilders, operators, shore- side services, and all who interacted with and serviced the South African fleet and its related businesses. The country turned around a trade service heavily reliant on overseas players into an independent shipping service and offered services to other jurisdictions. All this was achieved without cabotage. The results were evident in the fleet that the country possessed, as shown in Figure 2.3 below.
123 The IDC bought tankers and handed them over to Safmarine to operate albeit ironically these never came under the South African flag. Nevertheless, South African crews in attendance undoubtedly gained some valuable skills from working on these tankers.
124 Ingpen (note 24) 117 says that the Department of Foreign Affairs was the catalyst in making way for Unicorn Lines to enter trade in the Middle East.
125 The government had already ordered seven tugs to augment its fleet. See Ingpen (note 99) 107 for full details.
126 Two Durban-based shipbuilders, Barens and Dorbyl, built eleven vessels for Unicorn Lines between 1969 and 1983. Jones (note 81) 241.
127 Unicorn placed orders in Durban for two 8 000-ton ships and eventually built at least ten ships locally. For further details, see Ingpen (note 24).
Figure 2.3: South African commercial fleet during the period from 1947 to 1985 (Source: Tonnage figures adapted from Berridge, 1987:229)
These and other achievements established a basis on which South Africa could build further on its coastal trade.