South African Port Issues and Congestion Surcharges

The ports on the coast of South Africa are facing serious issues.

The coastal regions have been on the receiving end of heavy rains, high swells, and gusting winds recently. This did not only impact the ocean side operations but also impacted the landside operation. Cranes cannot offload vessels in windy conditions, and the weather further delays and slows down the loading of trucks in port. This delay in turn pushes back on trucks waiting to enter the port as Transnet closes new booking slots for the collection of containers.

The shortage and aging of port equipment such as straddle carriers is another contributing factor to these delays. Obtaining the parts to maintain the equipment is not easy. When machines break down, parts are “cannibalised” from other machines to ensure operations continue in the port.

As reported in the Freight Trading Weekly this week, it is interesting to note that “Not only are we shipping the same containerised volumes as during 2009, but we are 25% less productive than at that time, which is also deeply concerning.”

One of the major shipping lines used by Ziegler South Africa, shared that their waiting period at outer anchorage, is around 20 days before they get a berthing slot in the Durban port. As of the 15th of November, there were around seventy vessels outside the Port of Durban awaiting a berth. On average it takes six to eight days to offload a vessel, so the backlog appears to be here for some time.

Other South African ports are not much better off, with Coega having vessels waiting up to 10 days and Cape Town having delays of between 12 and 14 days.

All these delays have a direct impact on the operating costs of the shipping lines and as expected Maersk, MSC, PIL and CMA CGM led the way in sharing their intention to introduce congestion surcharges as early as the 1st of December. Hapag-Lloyed was the latest carrier to share their notice and will not be the last, as others will follow.

We hope that Transnet can turn this situation around, however there is no quick fix. Port equipment is not locally available and will have to be manufactured internationally and then imported. The first step in this process is to get the funds approved by Government and orders placed, until this happens nothing changes. For now, it seems importers, exporters and the South African public will be affected and pay the price.

Indication of lines, surcharges, and application date

Shipping Line $ per TEU Effective date
CMA $200 Loading date from 3 December onwards
MSC $210,00 Shipped on Board date from the 3rd of December
Hapag Lloyed $200,00 Gated in at origin from the 8th of December
Maersk $200,00 Gated in at origin from the 1st of December
PIL $205,00 From ETA 31 December (Far East Africa Service)      27 December (Asia South Africa Service)
ONE Not yet published
Evergreen Not yet published

TEU = Twenty-foot equivalent / 40 Ft container = 2 x TEU