The economic impact of poor terminal operational efficiency in the Port of Durban.

Thesis (MBA)-University of Natal, 2003.What is the role of a port? It is a place that handles ships and cargo with operational efficiency. For this reason, ports must be seen as elements in value-driven chain systems or in value chain constellations. They deliver value to shippers and to third party service providers; customer segmentation and targeting is on the basis of a clearly specified value for itself and for the chain in which it is embedded. Ports no longer operate in an insulated environment. They face the same competitive forces that companies in other industries experience. There is rivalry among existing competitors, continuing threat of new entrants, potential for global substitutes, presence of powerful customers and powerful supplies. Since the early 1980s, moves to rapidly liberalise trade and foreign direct investment (FDI) have strongly influenced policy makers in many developing countries in their thinking about this challenge. Openness to international market forces and competition was expected to allow those countries to alter both the pace and the pattern of their participation in international trade, thereby overcoming balance-ofpayments problems and accelerating growth, to catch up with industrial countries. Today, the Port of Durban is the clear African leader in total container throughput. In the world port league for 2000 established by Containerisation International Yearbook 2001, Durban was in 44th position. The Port of Durban is an important gateway with regards to general cargo flows especially since the port's goal is to become a hub port in the Southern Africa. It has great economic value for the city and the country at large. It can be seen that the poor economic and operational efficiency of the port leads to poor overall economic growth for the nation. It is therefore desirable to ensure that the terminal is always operating at optimum operating efficiency with the required infrastructure and capacity in place