Negative reactions such as fear and outrage can be powerful motivators, providing us with the kick to overcome very sticky challenges.
I say this knowing that Dolphin Bay has an unremitting dedication to remaining positive. Nonetheless, there is a power in confronting negativity head-on; this enables us to transform it.
It’s been a useful approach in a year characterised by supply chain hold-ups and inflationary pressures that have been cutting into everybody’s spending power, affecting all our businesses.
“Fear is an excellent motivator. It has a way of stopping us from procrastinating and pushing us to do what needs to be done.”
The Transnet bubble bursts
For the past few years, the Transnet bubble has been waiting to burst. This year, it happened.
There has been widespread speculation in the news that Transnet, South Africa’s state-owned parastatal governing rail, ports, and pipelines, was fast becoming “the next Eskom”. Transnet is now acknowledged to be failing in a similarly spectacular fashion. The consequences for our industry have been and continue to be severe, with massive shipping backlogs building up through September and October this year.
As we write this story, there are a staggering 96 ships waiting to enter Durban’s port, 38km of trucks waiting to enter to pick up cargo, and about 71 000 containers waiting to be offloaded. The backlog is expected to ease only in February next year. A proportion of the delay is weather-related, as we’ve had severe storms in recent months, but the truth is that the weather should not have had a substantial effect if our ports functioned properly.
The extremely long delays will be the new normal until Transnet is pulled into shape. Our industry has no choice but to plan around them and trust that the problem will prompt a positive change.
South Africa already has among the world’s highest container-handling charges. Now shipping lines have introduced a congestion surcharge rate for each container entering and exiting South Africa. Inevitably, the growing knock-on costs will be passed on to the consumer.
Happily, it’s not all doom and gloom for the industry; Dolphin Bay has a geographical advantage. Our factory’s location in Mossel Bay means we can get around the problem at Durban to an extent, by using Ngqura (also knowns as Coega), Gqeberha, and Cape Town ports as alternatives. As a result, we’ve been able to mitigate the delays to a fair extent. For example, one of our shipments was taking about 75 days to get to South Africa; we’ve cut that down to 30 days simply by using Gqeberha.
We can’t shield ourselves from the problem completely. When we book our goods onto a ship, we don’t necessarily know the vessel’s full routing, and it might still be bound for Durban. This is an unavoidable risk of using the shipping industry − and one we all need to keep in mind to safeguard our sanity!
The current delays are the longest we’ve ever experienced, but we’re still getting our products out to our clients. We’re managing the situation.
“This crisis feels different. Now it’s less about innovation and more about focusing on your core businesses.”
What next for Transnet?
Our hope is that the problems at South Africa’s ports could be the impetus for Transnet to start privatising. We’ve already seen private companies running some of Transnet’s old infrastructure, doing it much better than Transnet ever could. My sense is that that private enterprise will always do a better job than government, because businesses are driven by costs and competition – two things that Transnet, as a monopoly, never had to worry about.
Related to this, I’m encouraged by how business and government have been working together to solve some of South Africa’s most intractable challenges, such as our electricity failures and unemployment. Without this collaboration, mediocre service may well continue indefinitely or, worse, the state could fail completely. Instead, both sides are increasingly co-operating.
It’s not only governments that are corrupt; this publication has written extensively about corporate corruption, too. The ideal is for government and business to work in partnership, holding each other to account for the benefit of us all.
Cutting Costs and Streamlining
Rising inflation was the other big story affecting our operations in 2023. Inflation has caused plenty of negative sentiment globally, and the buying power of customers and clients decreased this year. Everybody seems to be on a cost-cutting drive.
It’s a very different era to that of the Covid-19 pandemic, which forced businesses to reassess their operating models and instilled a great capacity for resilience and innovation. The current financial pressures are causing businesses to focus on and protect their core offerings.
We’re finding that basic business principles are key. The buzzword right now is zero-based budgeting, where every expense must be justified. I’m seeing more and more companies cutting costs as they focus on their niche offerings, pulling out of any projects that might constitute a distraction. We’re doing the same at Dolphin Bay – critically assessing our products and services – and walking away from non-core initiatives if they aren’t adding value.
The Positive Side of Negativity
My feeling is one can’t only focus on the positives: we also need to squarely confront negative influences before we can transform them. Ignoring them does us no favours.
Fear is an excellent motivator. It has a way of stopping us from procrastinating and pushing us to do what needs to be done. When we face the fear, taking care of unpleasant tasks promptly, we are using negative energy productively. This continues to help us to future-proof our businesses.
It’s an approach that has helped us to confront the challenges brought by the shipping crisis and inflation, among others, as constructively as possible.
In a similar vein, 2023 has taught us the value of being prepared. Time and time again this year, we’ve seen the value of planning ahead as carefully as we do at Dolphin Bay, in matters ranging from shipping lead times to the availability of raw materials and currency issues.
Occasionally we get it wrong, of course. But remaining agile is crucial, and it’s hugely motivating when our plans work out.
Dolphin Bay is committed to remaining highly agile.