ICTSI signs 25-yr deal to operate South Africa’s Durban terminal

By Ashley Erika O. Jose, Reporter

Listed port operator International Container Terminal Services, Inc. (ICTSI) has signed a 25-year partnership with Transnet SOC Ltd., South Africa’s state-owned logistics company, to manage and upgrade Durban Container Terminal (DCT) Pier 2.

Under the deal, Transnet retains ownership through a majority stake in the special purpose vehicle Newco, while ICTSI will handle the terminal’s day-to-day operations, a move seen as potentially giving the company additional scale and influence in a key global logistics corridor.

“This partnership marks a shared commitment to revitalizing South Africa’s maritime infrastructure and unlocking new opportunities for growth for South Africa and the entire region,” ICTSI Senior Vice-President Hans-Ole Mad-sen said in a media release on Thursday.

Transnet, established as South Africa’s state-owned freight and logistics operator, manages the country’s port, rail, and pipeline network. According to its website, it operates 16 port terminals across seven South African ports (excluding Mossel Bay), covering automotive, bulk and break-bulk cargo, containerized cargo, and minerals.

The partnership covering the management, upgrade, and development of Pier 2 will formally take effect in January 2026.

DCT Pier 2 is Transnet’s largest container terminal, handling more than 70% of Port of Durban’s throughput and roughly 46% of South Africa’s port traffic. The terminal has 1,760 meters of operational quay length and 120 hectares of container storage and backup area.

“Through our deliberate and expansive investment in new equipment across our terminals, the performance of DCT Pier 2 has been on an upwards trajectory. We expect that our partnership with ICTSI will further propel this crucial terminal to its full potential,” Transnet Group Chief Executive Officer Michelle Phillips said.

The terminal is expected to expand capacity from 2 million to 2.8 million twenty-foot equivalent units (TEUs) through new equipment and technology upgrades. These improvements are projected to reduce logistics costs, enhance service quality, broaden market access, and attract additional cargo volumes, ICTSI said.

Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce noted that the partnership “could meaningfully lift consolidated throughput, diversify earnings further away from cyclical Asian and Latin American exposures, and strengthen ICTSI’s positioning as one of the most globally diversified port operators based in an emerging market.”

AP Securities, Inc. Equity Research Analyst Shawn Ray R. Atienza said Transnet’s operational expertise is expected to help smooth ICTSI’s development of the Durban port by leveraging its local presence and reducing the regulatory risks typically associated with operating overseas.

“Should the partnership prove successful, this opens up ICTSI for expansion to more countries, thereby positioning itself as one of the biggest port operators globally,” he added in a Viber message.

In 2023, ICTSI was selected as Transnet’s preferred partner following an international tender process. The award was later challenged by Danish shipping giant Maersk, but South Africa’s High Court ruled in ICTSI’s favor in October, upholding the contract and dismissing Maersk’s petition.

Established in 1987, ICTSI operates 33 terminals across 20 countries on six continents.

For the January-to-September period, its attributable net income rose 18.81% to $751.56 million from $632.58 million a year ago, while consolidated revenues grew 16.42% to $2.34 billion from $2.01 billion in the same period last year. Its largest revenue contributor remains in Asia, generating $985.63 million, followed by the Americas at $919.70 million, and Europe, the Middle East, and Africa (EMEA) at $432.46 million.

“Entering South Africa at a time when the government is actively seeking private-sector partners for turnaround initiatives positions ICTSI as a preferred operator for future African port liberalization efforts,” Mr. Arce said in a Viber message.

At the Philippine Stock Exchange on Thursday, shares in ICTSI rose P10, or 1.67%, to close at P608 apiece.