East South African Container Markets Trends and

East & South African Container Markets: Trends and Consequences for Port Authorities & Inland Corridor Services Dr. YANN ALIX General Delegate SEFACIL Foundation Le Havre – France © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 1

Content of the Presentation Introduction : Who are we ? PART 1 • The liners’ strategies effects on Regional Port competition PART II • From Milk Run Services to Hub… to Hub and Spoke services : what gonna change for Port Authorities PART III • Global Terminal Operators & Global Logistics Integrators perspectives Discussion © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 2

The SEFACIL Foundation : A unique international think-tank around strategic & prospective analysis on Port, Maritime & Logistics Polarizing the knowledge and the intelligences on Port/Maritime/Logistics by teaming-up an International Applied Research Programme Creation of innovative products on Africa-China-Europe developments thanks to the support of the biggest private enterprises as well as national and international public bodies and institutions © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 3

Source : World. Mapper 2011 (prior to the global crisis) Shipping containers handled in Africa 1980 - 2008 (prior to the global crisis) © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 4 Source : DREWRY Consultants Shipping containers handled in Ports by Country in 2008

Eastern & Southern Countries & major ports Market coverage UGANDA KENYA RWANDA Mombasa BURUNDI Dr. Yann ALIX & Jean-François PELLETIER Nov 2011 TANZANIA Dar-es-Salaam SEYCHELLES ZAMBIA MALAWI ZIMBABWE NAMIBIA Walvis Bay © SEFACIL 2011 Toamasina MOZAMBIQUE Beira BOTSWANA MADAGASCAR MAURITIUS Port Louis Port Reunion Maputo SOUTH AFRICA Cape Town Nacala COMOROS REUNION Durban East London Ngqura Port Elizabeth PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 5

Source : Dynamar 2011, Drewry 2011, Containerisation International 2011, Alphaliner 2011 Shipping Lines Connectivity & Capacity deployed on Eastern & Southern Ports Situation reported Sept 2011 3, 800, 000 Teu’s Trade Capacity 350 Vessels 50 Weekly services 20 Ports weekly called Dr. Yann ALIX Nov 2011 © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 6

Regional Market Coverage Source : Dynamar 2011, Drewry 2011, Containerisation International 2011, Alphaliner 2011 (Number of TEU’s by main players & allocated TEU’s capacity deployed on ports by countries) Situation reported Sept 2011 © SEFACIL 2011 SOUTH AFRICA MAERSK LINE TANZANIA MSC OTHERS 20 % NAMIBIA CMA-CGM 10 % KENYA MAURITIUS 30 % Dr. Yann ALIX Nov 2011 MOZAMBIQUE 10 % PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 20 % 30 % 40 % 50 % 7

Annual Trade Capacity deployed by Major areas of markets Situation reported Sept 2011 North America In TEU’s Southern, Eastern & Indian Ocean Markets 100, 000 500, 000 250, 000 © SEFACIL 2011 Far East Asia % Africa Mid. East & India 25 Source : Dynamar 2011, Drewry 2011, Containerisation International 2011, Alphaliner 2011, Port Authorities Europe & Med 5% 4 1, 000 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com Dr. Yann ALIX Nov 2011 8

From Kenya to Mozambique Indian Ocean Namibia Port Throughputs by main range (including Durban – 2010 in TEU’s) 75% of the TEU’s handled in Eastern/Southern Africa are concentrated on South African Ports 2, 000 TEU’s 1, 000 TEU’s 500, 000 TEU’s South Africa © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com Dr. Yann ALIX Nov 2011 9

Major Port throughputs (except Durban) Walvis Bay Cape Town Port Elizabeth Ngqura East London Port Réunion Port Louis Toamasina Nacala Beira Maputo Dar Es Salaam 600, 000 400, 000 2006 Dr. Yann ALIX Nov 2011 2010 100, 000 © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 10 Source : Dynamar 2011, Containerisation International 2011, Port Authorities Mombasa (Minimum of 30, 000 TEU’s/yr)

Landlocked markets South. East Range South. West Range Sketch on Ports configuration - Yesterday ! • Milk Run System with South-African Range © SEFACIL 2011 « national single port gateway » serving mainly « domestic markets » • Cross-trading liner system based on interlinking Regional & Intercontinental loops • Feedering network not enough reliable (size of the markets, productivity of handling activities, terminal costs for thanshipments, dwell time for small ships, etc. ) • Economies of scale not sufficient • Lack of Regional Customs facilitation & integration • Very few transnational freight railway opportunities • Few paved roads connecting gateway • Very few Logistic value added services on Imp/Exp products (FTZ & services added) National Port Gateway & hinterland Transcontinental direct call services Inland boundaries National direct call services Regional Hub Dr. Yann ALIX Nov 2011 Regional feedering services PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 11

Sketch on Ports configuration - tomorrow ? Toward a new subregional Port hierarchy based on : Landlocked markets South. East Range South. West Range • Forecasted increase of Imp/Exp volumes • New generation of motherships (6, 000 and +) & feederships (1500 and +) • Hub & Spoke opportunities • Improvment of Terminal global performances • Trades imbalances & empty strategic management • Regional Port Reform & GTO investments • Inland investments & Multimodal Corridors solutions • Overlapping of hinterland coverage & competitiveness to control landlocked markets stimulated South-African Range © SEFACIL 2011 National Port Gateway & hinterland Transcontinental direct call services National direct call services Inland boundaries Regional feedering services Regional Hub & Spoke terminal Dr. Yann ALIX Nov 2011 Inland multimodal corridors PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 12

The Shipping Lines’ perspective New Services design & port calls hierarchy based on : • The market-related factors because PMAESA Ports are not really at the crossroads of major intercontinental trades flows even if Durban acts as a « regional hub » (as for Western Med, Carribean Seas or South-East Asia) • « Undirect » coverage with Hub & Spoke solutions Vs Direct access to hinterland (Savings based on the availablity of cargo (regularity & reliability) + terminal productivity + Economies of scale by shortcut routes & services thanks to bigger ships deployment, etc…) • The Transhipment port Location (Geographical factors & Overall Cost Model including feedering & hinterland dimension) • The number of calls Vs the order of the calls Vs the hierarchy of the calls • Roundtrip voyage time per ship and per loop Vs Frequency Vs the of ships allocated per service to assume weekly coverage © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com number Dr. Yann ALIX Nov 2011 13

Global Terminal Operators’ perspective Future Regional Terminal Rivalry • GTO (HPH, DPW, APMT and so on) are not so much involved into ports’development in the PMAESA BUT…. • They are looking for being the first movers in your terminal/port expansion due to the regional economic growth perspective… (lack of Port infrastructure to accomodate the forecasted growth despite the Word crisis …) • They closely watch how Shipping Lines are reconsidering PMAESA market coverage Dr. Yann ALIX Nov 2011 © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 14

Global Terminal Operators’ perspective Source : Notteboom & Rodrigue 2011 Dr. Yann ALIX Nov 2011 © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 15

Global Logistics Integrator’s perspective New Inland Corridor logistics services competition • TBL proposed by Logistics Integrators to have a better control on the • Inland/Landlocked Door-to- African Port Gateway • African Port Gateway-to-Inland/landlocked Door multimodal services The Through B/L service includes the costs of terminal handling and the oncarriage of containers from alongside ship to place of delivery. • The service also includes the charges for detention, demurrage, container rental up to final destination. • The exchange of the original B/L and the control of the container seal number are made at destination by our SDV agent to guarantee the safety of your goods © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 16

SL, GTO & GLI’s perspective Estimated end of 2010 TOWARD NEW MODELS OF GOVERNANCE TO ENCOURAGE PPP & PRIVATE INTERESTS TO FUEL THE FUTURE PORT & LOGISTICS REGIONAL GROWTH Dr. Yann ALIX Nov 2011 Source : DREWRY Consultants © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 17

MERCI BEAUCOUP ! THANKS A LOT ! www. sefacil. com 00 33 (0)6 11 26 34 21 yann. alix@sefacil. com © SEFACIL 2011 PMAESA Conference 2011 www. sefacil. com - yann. alix@sefacil. com 18