Join the great debate

Logos are being suggested and talk about creating a National Shipping Line for South Africa is ongoing, but not without some dissenting voices. And, to be honest, it’s not a new debate.

Since losing the iconic Safmarine brand and the pride associated with owning the pristine Big Whites, as their containerships were affectionately known, South African maritime stakeholders have been divided about whether the advantages of a State-owned shipping line outweigh the challenges.

Even ChatGPT gave me a rather watery response when I asked the question.

For this reason I am inviting you to join our April Maritime Industry Dialogue to have a formal debate on the subject. I encourage you to apply to be on the panel for or against this development. Normal rules of debate will apply and we will open voting to the audience to determine which side has the most support at the close of the session.

Voting will be anonymous to promote the freedom to express one’s views without prejudice.

Since our usual slot for the Maritime Industry Dialogue sessions falls on Freedom Day, we will be scheduling the debate for 26 April at 15:30.




20 in 2022: Quay words and phrases

Last week’s CMTP Midterm Review threw out some quay words and phrases that I thought I would highlight in this blog to create a general picture of the content of the conference that saw active engagement from a number of stakeholders.

  1. 4iR: The Fourth Industrial Revolution and all that comes with it including automation and innovation has been on the agenda for a few years now. The government has a 4iR policy and there are pockets of innovation taking places within universities and amongst incubators. The issue needs to be addressed from a skills and employment perspective within the maritime space.
  2. Action: The call for action on several outstanding and unresolved issues was loud and clear. It is clear that the industry is cynical about the lack of action that has taken place particularly with regard to the ports’ infrastructure and efficiencies as well as the promulgation of legislation.  
  3. Cabotage: Cabotage or a coastal shipping regime is not a new topic and has been debated for many years. The consensus seems to be, however, that a liberal policy should be implemented that is not too restrictive.
  4. Cadetships: While some people are still calling for the active recruitment of new seafarers based on the much-publicised expected shortage of officers within the world fleet, it should be noted that cadet berths continue to be a problem. Some solutions were put on the table including the purchase of a new vessel for training as well as the need to form better relationships with shipping lines. Some good news from SAMSA, however, highlighted that talks in this regard are taking place with the view of placing more cadets at sea.
  5. Collaboration: Let’s be clear on this one. Talking about collaboration and breaking down the silos does not equate to actually collaborating. While this topic has crept into all recent maritime conversations – there is not much clarity on how this can be achieved or what collaboration will look like in the maritime industry.
  6. Decarbonisation: This global ambition is both an opportunity and a challenge for South Africa and, indeed, Africa as a whole. We need to stay abreast of technologies, interventions and research in this regard and we need to position our own industry to take advantage of changes and developments.  
  7. Defining the value chain: This was an interesting issue that cropped up during the three-day event last week. Quite simply – without being able to accurately define the maritime value chain, we are not able to leverage the opportunities. The National Department of Transport (NDoT) announced the theme for the year as Benefitting from the Maritime Transport Value Chain on the first evening of the conference.
  8. Funding and Finance: As a capital-intensive industry that is not well understood by many financing houses and banks, stakeholders believe that more needs to be done to make potential funders aware of the realities of the industry. The establishment of a Maritime Development Fund was also once again raised, but no real action plan was revealed.
  9. Green Hydrogen: This topic deserves more than a single bullet point – but suffice to say that this is fast becoming a buzz word in the maritime sector. It will be interesting to watch how countries and companies position themselves in this regard as the return on investment looks to be long term with substantial capital outlay.
  10. International Maritime Centre: The ultimate aim of the Comprehensive Maritime Transport Policy is to see South Africa emerge as an International Maritime Centre on the African continent. This implies a healthy and growing subset of maritime sectors that are transformed, efficient, cost-effective and customer-centric. Government is seen to be an enabler in this regard, while the private sector will need to engage as well as collaborate (yes that word again) to ensure this vision is achieved. “South African businesses must be at centre of maritime development to provide services to international industries,” said Dumisani Ntuli of the NDoT in his opening remarks.
  11. Legislation and Policies: The need to fast track several key pieces of legislation was highlighted, but many of these still seem to be some way off being promulgated into law. Stakeholders expressed frustration about recent developments relating to the policy to allow additional STS transfers in Algoa Bay as well as the numerous Acts that are sitting in the legislative pipeline. In addition, there was a call to sign certain important conventions including the Clydebank Declaration.
  12. Maritime Awareness: Maritime awareness has been on the agenda for a number of years and much has actually been achieved in this regard. The concern, however, is the creation of false hope amongst the youth who have been exposed to a seafaring career without much thought as to how we will manage their cadetships and sea time. Nevertheless, stakeholders maintain that maritime awareness needs to start at school level and developments in qualifying maritime teachers was shared.
  13. National Shipping Carrier: Speaking at the opening of the event last week, the Minister of Transport, Fikile Mbalula said that the establishment of a National Shipping Carrier was a priority. The aim is to be able to control ships and tonnage for the benefit of South African citizens and companies.
  14. Operation Phakisa: Yes, this is still on the agenda. Despite provoking some cynicism, Operation Phakisa still has a role to play in the development of the maritime agenda. For many, the need to align the newly created Ocean Economy Master Plan (which derives its course from Phakisa) with the CMTP document as well as the numerous government departments that are associated with it is paramount.
  15. Port City: The concept of integrating the port and city was mentioned as a way to move ports towards becoming more responsive to the needs of companies and stakeholders in its precinct as well as to create awareness of the greater logistics chain within adjacent cities.
  16. Port Efficiency: It is a pity that this topic remains a massive issue within the maritime industry in South Africa. Ports and the Ports Authority are seen as the gateway to the maritime sectors – and constituents of these sectors have long anguished over the lack of action taken within the ports to ensure productivity, efficiency, opportunities, and ease of doing business.
  17. Ships Register: Another topic that has been buzzing around conferences for close to two decades is that of bolstering the South African Ships Registry. There are some very practical steps that need to be taken in this regard – not least of which is the need to identify what shipowners are looking for in a Flag State. Shipowners have the luxury of choice in this regard and for a register to deliver the desired gains, we will need to create a framework that makes business sense for shipowners.
  18. Transformation: While there has been transformation in various sub sectors of the maritime industry, many believe that this is still not enough and that the BBBEE sector codes need to be implemented to achieve adequate transformation.
  19. Women and Youth: Part of the transformation agenda includes the inclusion of women and youth within the sector and actively making space for them within the existing structures.
  20. World Maritime Day: We have a massive opportunity to showcase our maritime sectors in October this year as we host the International Maritime Organisation’s World Maritime Day parallel event. We need to leverage this opportunity.

These quay words and phrases can only provide a short snapshot into what was discussed last week and we will be publishing a full report back on the event before the end of the month.  

Government re-ignites a conversation on the CMTP objectives 

Despite a slow start yesterday as delegates waited two hours for the Minister of Transport to arrive, the honesty expressed in Dumisani Ntuli’s opening address was refreshing as he admitted some of the successes and challenges that still face the industry. 

It was hard not to miss his deliberate nod in the direction of South Africa’s ports and port authorities – highlighting that “the state of the ports is a national emergency”. While we have certainly heard these words before from a number of politicians, such continued reference will hopefully eventually convey the gravitas of the situation to those that have the power to actually respond positively. 

Quite simply, Transnet National Ports Authority (and Transnet) needs to understand that they are an essential cog in the effective growth and development of the entire maritime sector. 

“Today our ports suffer structure and operational deficiencies. We have known this for a long time,” he said pointing to a number of strategies that could help address this issue. 

After lunch industry had its chance to voice some of its concerns and expectations of the government as well as their willingness to participate in the idea of establishing South Africa as an International Maritime Centre (IMC). 

While some excellent points were raised – including the need to implement the policy objectives and not simply talk about them – the how and when still does not seem to be being substantively addressed. 

It’s only day one of a three day conference, however, and I look forward to seeing the “how” more deliberately tackled. 

I, for one, want to see a transparent dashboard highlighting the strategic interventions next to each objective; which stakeholder is accountable to that intervention; when they will delivery those interventions; confirmation that they were delivered on time and the actual impact that those interventions had. 

With a rather full programme that saw the conference head into the evening, it was good to see how many delegates remained for the full day. The final session of the day launched the CMTP 2022 theme: Benefitting from the maritime transport value chain – and included input from Value Chain Solutions, OceanEnergy, EthkWeni Maritime Cluster and Damen Shipyards Cape Town. 

This input and speaking to some of the other delegates during the breaks does highlight that things are moving forward in many spheres of the sector with individual companies, organisations and associations already well advanced in playing their role to advance the country as an IMC on the continent.

Today is another day and I will bring you a short update – but our full report on the three day conference alongside commentary from myself and others in the industry will be published before the end of the month.

20 in 2022: Unanswered questions

In 2018 we ran a double page spread on the 18 unanswered questions for that year. Celebrating our 20th anniversary this year, we will delve into 20 questions that we hope will be answered in 2022.

Will the South African Maritime Safety Authority announce its permanent CEO?

This was a question in 2018 and remains a question today. After almost six years, the Authority recently appointed its third interim CEO while they are reportedly finalising the appointment process. The position has been advertised a number of times and speculation has run high in the industry about who should take the top position.

Will we see the completion of the corporatisation of Transnet National Ports Authority?

Last year we heard that the corporatisation of the Ports Authority would be prioritised and completed as per the National Ports Act. At one point the date of 1 April was touted by politicians, but that date has come and gone without any further announcements.

Will the SA Agulhas remain a training vessel or be sold?

The Dedicated Training Vessel, SA Agulhas has long been the albatross around SAMSA’s neck as it bleeds money without truly providing the type of training required especially for marine engineering cadets. Announcements that the vessel would be sold seem to have come to nought though, and the vessel remains an expensive asset.

Will outstanding maritime legislation be promulgated?

There are a few maritime-related pieces of legislation that seem to have been stuck in the parliamentary process of being fully promulgated. Many of these are being anxiously awaited to assure investors and potential new comers into the maritime space that their investments will have room to grow.

Will we see the establishment of a single transport economic regulator?

Similarly to the corporatisation of TNPA, the talk of a single transport economic regulator has long been suggested to be imminent, but nothing seems to have developed despite the promulgation of the Economic Regulation of Transport Bill in 2019 that sought “to consolidate the economic regulation of transport within a single frame and policy; to establish the Transport Economic Regulator; to establish the Transport Economic Council; to make consequential amendments to various other Acts; and to provide for related incidental matters.”

Will the Fishing Rights Application Process be settled?

The current Fishing Rights Application Process (FRAP) has been clouded in delays and extensions and exemptions. Now accepting appeals to the awarding of rights, the Department of Forestry, Fisheries and Environment is likely to face significant pushback which could legally tie up the process for longer than necessary.

Will the fishing vessel recapitalisation project gain any momentum?

After initially being a value proposition presented by Operation Phakisa in 2014, the Fishing Fleet Recapitalisation programme has essentially stalled. It was only presented as a “potential” programme in the report back on Operation Phakisa in December last year to the Portfolio Committee on Forestry, Fisheries and the Environment, but does not get a mention in the draft Marine Manufacturing and Repair sub-sector plan of the Ocean Economy Master Plan released in January this year.

How did South Africa go from being President of IMO Assembly in 2019 to not being represented at all in the latest elections?

South Africa was elected to preside over the IMO Assembly at the 31st Session of the Assembly in 2019, but failed to even qualify for a seat on the Council in last year’s elections held in London during December.

Will we see a green ship recycling facility in South Africa or Africa?

Some time back TNPA issued a call for proposals relating to the establishment of a Green Ship Recycling facility in one of South Africa’s ports, but nothing has come of that yet. The draft Ocean Economy Master Plan identifies this as a potential for the country – highlighting that there is an increasing push in the shipping sector to use accredited facilities that focus on safety and the environment. To be honest, it seems to be almost a no-brainer when one considers that a number of vessels are towed around the tip of Africa on their way to the scrap yards.

What will be the ultimate fate of the Royal Cape Yacht Club and the Oceana Power Boat Club?

This is an interesting question. The status quo seems to be in place after dramatic announcements that the Royal Cape Yacht Club would soon have to leave the Port of Cape Town and that the Oceana Power Boat Club would have to find alternative premises outside of the V&A Waterfront.

Can we move from talk shops to action-based accountable timelines for implementation of strategies and interventions?

It is rather ironic that at every conference there is a discussion around moving from talk shops and actively seeking to address the concerns and challenges of the industry. It seems by simply saying we should do this – we placate ourselves that we are actually making that leap. The Ocean Economy Master Plan is a step in the right direction, but it is sad that the intentions associated with Operation Phakisa had to be distilled into another set of documents and proposals made on paper – many of them resuscitated from Operation Phakisa.

Can South Africa successfully resurrect its Shipping Registry?

This has been an ongoing debate for almost two decades. The honest truth is that, to achieve this ambition will take the efforts from serious maritime legal minds that understand what the shipping sector needs from a Flag State. Our current maritime legislation is not supportive of these needs and a number of changes would be essential. Understanding that shipowners are at liberty to choose any Flag State, we have to realise that South Africa would have to offer significant benefits to a shipowner.  

Will the Saldanha Bay IDZ and Saldehco OSSB live up to their potential?

Both the Saldanha Bay IDZ and its neighbour, the Saldehco Offshore Supply Base were announced with great fanfare, but little actual activity besides the basic infrastructure required has been seen in terms of attracting tenants and commercial activity. While the crash in the oil industry can shoulder some of the blame as well as the impact of Covid-19 – we need to acknowledge that the slow pace has seen some potential stakeholders and investors become cynical.

Are we likely to see more rig activity offshore Africa?

As the world races towards decarbonisation ideals and an end to the reliance on fossil fuels, Africa’s ambitions to leverage its offshore oil and gas activity may be curtailed. The vehement protests against the arrival of the seismic survey vessel off the coast of South Africa also highlights the growing awareness of the potential risks associated with offshore drilling amongst ordinary citizens. The debates around a “just transition” will surely need to consider that Africa needs to be given the opportunity to benefit from its reserves in the same way that other regions have in the past. (Read the opinion piece from African Energy Chamber)

Will the African Continental Free Trade Agreement live up to its expectations?

It is difficult to say yet whether this monumental continental agreement will deliver the rewards that Africa needs to take advantage of intra-Africa trade; grow industrialisation; provide employment and so much more. This question will remain unanswered for some time.

Are we (still) training seafarers for unemployment?

Without access to sufficient cadet berths, our seafarers will not have the opportunity to realise their ambitions of a career at sea. More lateral thinking, crewing agencies and accredited simulation time could alleviate this problem. We need to ensure we stay abreast in terms of training and the proposed changes in the STCW regime.

What has the SAMBF achieved?

Much as I respect the able people elected to kickstart the South African Maritime Business Forum, I feel that the organisation has not lived up to its mandate to become “the united voice of maritime South Africa”. In fact, the maritime clusters seemed to have stepped willingly and ably into this space. My opinion at the time of the establishment of the SAMBF was that the success to unite the industry should not focus on company members, but should create a structure where the (very) numerous maritime organisations could come together as member associations representing the different sectors of the maritime industry in this forum. An alternative could have been to be bold in terms of the mandate of transformation and created the South African Black Maritime Business Forum as first envisaged.

Is Africa ready for digitalisation and automation within the maritime sectors?

There is a move toward digitalisation and automation, but also some resistance. As global ports become “smarter” the efficiency gaps between African and international ports will increase. Labour and skills need to be developed to transfer into a more automated maritime environment. The balance between employment potential and the efficiencies provided by automation needs to be transparently addressed.

Will TNPA finally get its act together around underwater hull cleaning licences?

The fact that we have hull cleaning licence holders who have spent hundreds of thousands of Rands on securing a right and equipment to undertake hull cleaning within South African ports – but who have not been able to recoup their investment due to the stalling actions of TNPA is nothing less than an utter disgrace. Again – big promises and announcements resulted in no action. If we are truly interested in promoting the ocean economy, why are we still dragging our feet on simple interventions?

Will SAMSA permit additional offshore bunker licences?

Offshore bunkering has rightfully caught the attention of environmentalists. A few spills in Algoa Bay should make the stakeholders sit up and take stock of what mitigation plans are in place that could appease those concerned about the environment. After lifting the moratorium on issuing additional licences – the South African Maritime Safety Authority promptly put it back in place. Although still accepting applications, it will be interesting to see how SAMSA navigates a path that placates environmental concerns while simultaneously allows this sector to grow for the benefit of the local economy.

It’s time to vote

After finishing off writing up the profiles of our shortlisted nominees in the Blue Economy Champion Award – I can honestly say that the maritime sector has no shortage of passionate promoters who are keen to see the industry grow, transform and become sustainable. And, while our list includes some deserving candidates, I have no doubt that there are plenty more champions out there too.

The process does rely on the generosity of our maritime colleagues to not only nominate, but also to vote for those in the industry that deserve recognition. So often we don’t give (or receive) this type of acknowledgement and I do hope that this initiative goes a little way in providing a shout out and help them understand that we see them.

Although extremely pleased by the response to the call for nominations, I am hoping that future editions of this Award programme (yes, we want to continue this into the future) will attract even more input.

What the list of candidates also indicates is that there is a shift in the industry and transformation is taking place.

Thank you to everyone who nominated their peers. It’s now time to vote for your preferred candidate. Public voting closes on 28 March and will be followed by an adjudication process by a panel of judges.

PS: Since it is International Women’s Day, I thought I would point out that eight of the 23 candidates are women – that’s a little over 30 percent. That’s certainly better than the claimed two percent of representation of women in the global maritime industry.

Getting take-aways

Yesterday I picked up some maritime take-aways that did not involve fish and chips.

I accepted an invite to participate in a Maritime Security Roundtable hosted by the Institute for Security Studies Africa (ISS Africa) with a bit of trepidation based on my concern that I would not be able to add much value. Joining a group of varied maritime stakeholders, the discussion was interesting as well as diverse and highlighted several important issues that provided some important take-aways.

  • The marine and maritime space is far-reaching and complex in nature – making any discussion on governance and security equally diverse and complex.
  • Significant work is being done theoretically, academically and practically to improve South Africa’s and Africa’s ability to manage its own maritime domain – but much of this is not immediately visible or apparent.
  • This lack of visibility is, in part, due to the diverse range of stakeholders involved across government and industry – with the consequence of some duplication and gaps occurring.
  • While many consider Operation Phakisa a failed initiative, it did manage to provide deliverables in some areas. One such success is the creation of the Incident Management Organisation (IMOrg) within SAMSA.
  • An Ocean Economy Master Plan is scheduled to be completed by December this year – outlining aspects of the maritime economy that require attention and offer opportunity. Although the process is being driven by government, labour and industry, there is still a perception that it is being held behind closed doors by some.
  • There is a lack of willingness to coordinate data from the industry to help make over-arching decisions, with many government departments, NGOs and Universities all accumulating research without an understanding of what has already been undertaken in the space.
  • Coastal communities are often not part of the discussions for solutions and/or their specific challenges are not understood within the context of the historical and present dynamics.
  • Training within the maritime space needs to be offset against actual employment opportunities. Training for unemployment cannot be an option.
  • There appears to be a lack of review of policies to understand where interventions have worked and where they have not. In addition, policy briefs are often ignored or not produced.
  • The slow pace of policy as well as legal instrument development is a massive problem with important legislation often becoming stalled and remaining in the pipeline for many years.
  • It was suggested that a major maritime disaster or set-back may be needed to strengthen government’s resolve to tackle a number of issues that remain unresolved.
  • A dedicated maritime department within government was once again discussed as a solution to coordinating the maritime efforts of the country; and that the maritime agenda needs to be raised more often within government structures.
  • While regional and continental bodies exist, these cannot override national interests. The AU needs to strengthen its maritime desk.
  • In the absence of true collaboration and visibility; many private companies are simply just getting on with it while policy and government strategy lags behind.

At the end of the day, most agreed that adding another maritime intervention or initiative to the space would simply further the fragmentation of efforts. More collaboration and coordination are the ultimate solutions. Sadly, this is a common refrain and will take significant effort for stakeholders to pay more than lip service to the notion of breaking down silos.

Thank you to my hosts and fellow-panellists for a most interesting afternoon of discussions. It was also good to get out from behind the computer screen and zoom meetings to engage in person – albeit behind masks.

Essentially speaking

At the moment there are two types of maritime companies. Those that are seen to provide essential services or products, and those that do not. We have applauded those that continue to risk their own health to provide a lifeline of services and products to the sector – but the reality is that these companies have been given an economic lifeline that many others cannot hang on to.

And as some companies scramble to motivate for the status of an essential service provider – it gives us an opportunity to reflect on this as a concept not only for companies, but for job descriptions as a whole.

The maritime industry has for some time talked about disruptors and their potential impact on employment as well as the more pressing need to produce certain skills at the expense of those that may face being phased out.

We all pointed to maritime interventions based on technological advancements, but the world has just been systematically disrupted by a microscopic virus that may see the adoption of these interventions being accelerated.

Consider the unique plight that seafarers are currently facing as ports clamp down on crew changes. Certainly shipowners may be considering the advantages of automated vessels even more keenly.

Consider too the fact that some of the smaller companies may realise the benefits of their staff working remotely as protocols are successfully implemented to keep businesses in operation during a lockdown period and employees show an affinity to self motivate. A business seeking to recoup any losses may suddenly see expenses relating to an office set-up as redundant. No office means no cleaning staff and possibly no receptionist as well as other non-core workers.

Consider the potential use of drones to deliver supplies to passing vessels. It’s already happening on a small scale on an experimental basis, but as capacity develops and it becomes viable for a greater variety of loads – the need for small vessel operators to race out with urgent supplies will certainly diminish. The need for skippers and their crews will lessen.

Consider the negative impact this virus may have had on the cruise sector. Seen as a potential growth sector in Africa, it will now have to contend with the justifiable fears of potential passengers who watched port after port deny disembarkation amid worries of bringing the virus ashore.

Consider the number of conferences, seminars and workshops that have been cancelled or moved into the digital space. Eliminating a venue concurrently eliminates the need for catering, technical and ground staff. Some maritime conferences organisers have quickly introduced digital offerings that provide both the content and the networking opportunities that were only deemed viable within the confines of a conference room setting.

When the sea calms after this COVID-19 pandemic, however, it is going to be essential to recoup the economic activity that was lost. It is going to be essential to commit to job retention and even growth.

It is going to be essential to get back to business as usual BUT it is more important now than ever before to realise that business as usual cannot mean business as we have always done it.

We will need to take action on the good intentions spewed at every maritime conference relating to collaborative efforts to expand, transform, improve and diversify the maritime sectors. All this needs to be accomplished in the face of fighting for our own organisation’s survival.

Communication, information sharing and transparency will be key and as a maritime journalist I believe that a relevant, critical and investigative maritime media space will be even more essential than ever.

Are we acting in the best interest of the maritime industry?

Have you noticed how many people are simply just acting within the top echelons of the maritime-related governing bodies, organisations and SOEs in South Africa?  The recent announcement of a permanent CEO for the South African International Maritime Institute (SAIMI) means that there is one less acting CEO, but the lack of certainty of many positions remains unchanged.

A promise to appoint a permanent CEO to the South African Maritime Safety Authority (SAMSA) by June this year never materialised despite a second call for applications for the position. In the meantime, Sobantu Tilayi has been acting in this capacity since 2016. I cannot even imagine the stress associated with seeing your position advertised over and over again – applying for it and then just simply being expected to accept the status quo when no definitive move to make a decision seems forthcoming.

A similar situation exists within the Department of Transport (DoT) where Dumisani Ntuli has been holding the position of Acting Deputy Director General: Maritime Transport for a number of years. This position was also recently advertised by the Department, but no announcement has been made of a permanent appointment.

But perhaps more alarming is the way in which Transnet deals with their leadership issues – where allegations against permanent appointees result in suspension and the appointment of acting management. In a segment broadcast by Carte Blanche recently that aimed to highlight inefficiencies at container terminals, Captain Sarno of MSC Shipping noted that the lack of permanent appointees that could be held accountable was a problem.

One just has to cast an eye to the top tiers of management across both Transnet Port Terminals (TPT) as well as Transnet National Ports Authority (TNPA) to note that the leadership structure is hampered by the lack of permanently appointed and credible heads that can be held accountable.

Compare this, if you will, to the stable decade-long leadership of Bisey Gerson/Uirab who officially stood down as Chief Executive Officer of Namport a few months ago. And compare the strides made in this time to attract business to the port, develop the port and acquire infrastructure to the detriment of competitor ports in the region.

Actors in the maritime industry:

  • Sobantu Tilayi: Acting CEO, SAMSA
  • Dumisani Ntuli: Acting Deputy Director General: Maritime Affairs, Department of Transport
  • Mohammed Mohamedy: Acting CEO, Transnet
  • Richard Vallihu: Acting COO, Transnet
  • Mark Gregg-MacDonald, Acting CFO, Transnet
  • Sanet Vorster, Acting CHR, Transnet
  • Michelle Phillips, Acting CEO, Transnet Port Terminals
  • Nozipho Ndawe, Acting CEO, Transnet National Ports Authority

Crowdfunding as a tool for the boat building sector

One of the most common moans made by delegates at many of the maritime conferences is the lack of access to capital for start-up projects in the maritime sectors. By its nature, the maritime sector is a capital intensive space to play in and many entrepreneurs’ dreams are dashed sitting in a chair at their bank.

Crowdfunding has emerged internationally as a potential source to deliver funds to enthusiastic entrepreneurs who have a good idea to sell. Can this form of finance be harnessed for the likes of the small boat builder keen to bring a unique platform to the market?

Cape Town-based entrepreneur, Jako Laubscher is testing the waters with his River Lounge concept on the Indiegogo platform which claims to have raised over $1 billion in crowdfunding for projects around the world. The platform has successfully hosted a number of other boat-related projects including the HYPAR smart boat, and the Keelcrab Sailone.

The River Lounge concept is seeking crowdfunding to take it to the next phase of development.

There are, however, a number of projects that do not seem to have gained traction yet including Laubscher’s River Lounge. Although currently in its concept stage, the River Lounge idea is an interesting one that could potentially attract interest from local and international investors.

The River Lounge is a fully automated hydraulically platform with hidden units that open and close with your remote control. It is a fully roadworthy product that can open on its own trailer for a 42m2 two bedroom apartment with amenities, air con, braai area, fridge, freezer (under deck), kitchenette AND/OR launch onto the water for a day out on the dam/river.

For international shipping it fits into a 40ft container or your garage. Weighing less than 2,5t your average truck or sizable car can tow the River Lounge to various destinations.

In contrast to the slick presentation and detailed drawings associated with the River Lounge on the Indiegogo platform is the rather crude conceptualisation of a kit to change a stand-up paddleboard (SUP) into a motor boat. Unsurprisingly the idea – which seems to consist of literally tying a chair and small outboard onto a SUP – has not garnered much attention.

Monty Furmie is another South African with maritime funding aspirations on Indiegogo. This Cape Town-based software developer is hoping to get crowdfunding to launch a sport fishing boat and charter business to be known as Kraken Oceanic. Capital raised via the platform will be used to train currently unemployed people in the skills associated with the building of the required vessel for the business.

In addition, Furmie states as one of the goals, the ambition to create open source software and systems for all communications, energy, GPS and Sonar/Radar requirements. “This software will be released as open source software and made available from our website as well as a publicly accessible GitHub repository,” he writes in his overview of the project on the platform.

Choosing a platform

Indiegogo is one of many international platforms that host start-up projects as well as fundraising opportunities for charities, but local South African versions are also available. The choice of platforms is one of the first steps towards running a successful crowdfunding campaign as one needs to consider their audience reach as well as their business model.

The South African based Jumpstarter platform has an “all-or-nothing” protocol built into their business model. As a registered Non-Profit Organisation (NPO), Jumpstarter states that all projects must be 100 percent funded before its time expires to be able to claim the funds. Funds relating to projects that do not meet this requirement become usable for other live Jumpstarter Projects as credits or pledges.

They maintain that this reduces the risk for all involved as it does not compel the project originator to follow through on a concept without the full financial support required.

By contrast the Indiegogo site offers two funding models and allows campaigners to access funds even if their full project goal is not met if they choose the flexible funding model. Choosing the fixed funding model, however, sees contributions returned if campaigners do not meet their goal. The choice depends on whether the project could go ahead without the funding goal being reached or not.

Obviously a commission fee is structured into the pricing and the platforms stipulate the percentage of funds raised that they claim. This can vary across the different platforms and can additionally include commissions and charges on funds that are transferred via a credit card.

Luring funders

Whatever the platform, however, the project really needs to catch the attention and emotions of potential funders who are generally everyday internet browsers that need to be persuaded to be parted from their cash.

This necessarily begs the question of trust. Will South African, and indeed African campaigners, be deemed to be trustworthy on international funding platforms where perceptions of a corrupt continent may thwart calls for investment?

Most platforms make it fairly easy to create a funding project or campaign – but on the surface it does not seem that even the most reputable sites are immune to hosting scams. Indiegogo, for example, recently hosted a scam that netted a campaigner $850,000 in a couple of days for a innovative artificial gill that “lets you breathe underwater”.

A company called Triton seems to have capitalized on the lack of knowledge surrounding marine ecosystems by claiming to have invented a device that was able to filter the oxygen out of seawater and allow scuba divers 45 minutes of shallow shipwreck exploration.

Bearing in mind that this is not an isolated scam, investors need to understand that they could be operating in a potentially grey area while those seeking funding need to realise that they need to overcome any skepticism that may exist by being transparent as well as open to questions.

One can be sure that these online platforms that act as facilitators for this funding have built-in terms and conditions that protect them when the fish does not hit the net so to speak.

It is interesting to note that, given the huge potential for crowdfunding to promote entrepreneurship and financing on the African continent, the establishment of the African Crowdfunding Association (ACfA) was established to promote effective self-regulation as well as “build trust and transparency between all actors in the African crowdfunding ecosystem”.

The take-home has to be, however, that both campaign developers as well as investors need to be circumspect about their expectations when using crowdfunding platforms. That said, it could be an interesting space for some maritime sectors to seek finance. Quite honestly, though, it is the platforms that are actually raking in the funds for the role in facilitating the deal – and it is therefore not surprising that a massive plethora of available crowdfunding sites exist.

Perhaps I will start one aimed directly at the maritime industry – anyone keen to fund this for me?


Could SAMSA get a permanent CEO by the end of this month?

Acting CEO of the South African Maritime Safety Authority, Sobantu Tilayi, recently jested that he could have pronounced himself as the permanent position holder when he stepped into the Minister of Transport’s shoes to deliver a speech at the eThekwini Maritime Summit during April.

But it’s no real laughing matter that the Authority has been without a permanent CEO for almost a year and I have been eagerly scouring each Cabinet meeting report as it is released to ascertain whether an appointment has been approved. Because, as Tilayi pointed out during one of his many conference appearances last month – his present contract expires at the end of the May so an announcement is surely imminent.

In a question posed by Choloane David Matsepe to the Minister of Transport in the National Assembly last week, the Minister was asked whether any CEO, CFO or COO positions were vacant in any of the Department’s entities – and what steps had been taken to fill these positions.

The response noted what the industry already knows – that interviews have been conducted for the position of SAMSA’s CEO and that one person is currently acting in this capacity. The Department’s response further notes that a recommendation is to be routed to the Minister for approval.

Perhaps this month’s Cabinet meeting briefing will include the name of a permanently appointed CEO for SAMSA.