Key performance indicators for container ports: a case of weighted efficiency gains from operations (WEGO) in South Africa.

Abstract

South Africa is a developing country, within which the volume of exports and imports plays a significant role in the local economy, and therefore ports are critical gateways to support international trade, which ensures uninterrupted movement of goods in the global supply chain. Transnet National Ports Authority (TNPA) in South Africa acts as the ports’ landlord. The institution is responsible for the funding and administration of local ports. Various authorities including businesses raise concerns about inefficiencies in South African ports. The dominant factors are poor performance and high tariffs. These factors have been explored by previous studies and benchmark studies that were conducted by Ports Regulator of South Africa (PRSA). Durban container port is characterised with poor performance particular for container handling and high tariffs for specific port users. The Ports Regulator of South Africa responded to this concern of high tariffs and poor performance by establishing a new element into tariff Methodology called Weighted Efficiency Gains from Operations (WEGO). This is a tool aimed to improve port operational performance, applying to all South African ports. This study aims to assess and explore Key Performance Indicators (KPIs) selected to determine WEGO. TNPA intends to link performance gains for operations to the tariff methodology (Required Revenue). TNPA published port operational performance for 2017/2018 and 2018/2019 financial periods. The ports’ operational performance data assisted PRSA to select performance indicators to be considered for efficiency gains and the Ports Regulator published the first WEGO performance results in 2018/2019 financial period. The study applied both quantitative and qualitative research methods to analyse WEGO performance results. This study relies on secondary data published by PRSA. The author only focused to containers and Durban as the main container port of the country. This data shows performance scores for each KPI selected and the aim is to observe changes to performance and seek understanding behind improved or declined operational performance. However, there will be no specific statistical or mathematical models utilised. In conclusion, this research also offered recommendations on what TNPA and TPT can do to improve their performance and efficiency in order to be on par with their global counterparts.