Transnet must go regional as Covid-19 takes toll globally, says CEO

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Portia Derby.
Portia Derby.
  • Transnet CEO Portia Derby says the state-owned rail and port operator is eyeing regional trade as a increasingly important part of its business strategy.
  • Derby says Transnet proactively sought out advice from other countries to formulate its response plan at the start of the pandemic.  
  • She says she personally only expects a return to normality to occur when the world successfully develops and distributes a Covid-19 vaccine.

Transnet CEO Portia Derby has said the state-owned rail and port operator is eyeing regional trade as a increasingly important part of its business strategy, as the ongoing Covid-19 pandemic continues to depress global economic activity.

Derby was speaking during an online webinar at the Southern Africa Transport Conference on Wednesday morning. 

"The linkages in SADC are crucial for South Africa. For South Africa to grow, our region also needs to grow. The north-south corridor is an important priority for us, and we will continue to push on that front, " said Derby.

In a frank assessment of what is expected in the coming year, Derby said she was not sure that the optimism around overcoming the Covid-19 pandemic by 2021 was warranted. She said she would personally expect a return to normality when the world successfully develops and distributes a vaccine.

While the global slump in demand at the start of the pandemic affected Transnet's operations, Derby said that entity proactively sought out advice from other countries to formulate its response plan. 

"When we started to see the flu spreading, we spoke to Singapore. It gave us a bit of a head start. We set up a command centre led by some amazing South Africans. Whenever a new regulation came out, we addressed it quickly insofar as its impact on our operation."

This yielded benefits, said Derby, as Transnet only had to completely close for three days during the lockdown.

In April Transnet Port Terminals said its port utilities were only half as busy during the coronavirus lockdown due to slump in demand. In June, meanwhile, the Western Cape called on Minister of Public Enterprises Pravin Gordhan to urgently provide resources to resolve challenges at the port of Cape Town.

By July, Transnet Port Terminals announced that it had bested its target of 13% increase in citrus export volumes despite the Covid-19 pandemic.

Derby also told the webinar that said the state-owned entity was tightening up procurement. "We increasingly buy directly from manufacturers, so that we can get to grips with the mark-ups and we have become more discerning buyers and we don't simply take the first price we see."

Abhishek Sharma, senior Director of transport at TradeMark East Africa, a not-for-profit infrastructure and logistics support group active in 13 African countries, said there was also opportunity in the Covid-19 pandemic.

"This crisis brings with it the opportunity for us to rebuild our supply chains as this is not the first pandemic we have experienced, and it will not likely be the last. It also gives an opportunity to become more resilient ahead of future challenges, " said Sharma.

International Road Transport Union senior advisor, Jens Hügel, said the pandemic's impact on global trade was worsened by a lack of regional and global coordination.

"Some countries have trade restrictions, others don't. Some countries impose a lockdown, others don't. It becomes very hard to exporters and businesses to know what to expect," said Hügel.

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