Congestion! 96 Ships Wait At Anchor Outside The Harbor.

Severe congestion in South African ports is forcing shipping companies to abandon services in the country.

According to the South African Association of Freight Forwarders (SAAFF), 96 ships are currently waiting at anchor outside the port, causing an economic loss of 98 million rand ($5.32 million) per day.

Maersk is one of the shipping lines skipping ports to South African ports; a few days ago, the company warned of long wait times in Durban, noting that "Duffy Line's APL Houston eastbound voyage is skipping the port of Cape Town due to berth congestion in the port of Cape Town." Congestion surcharges imposed by several shipping lines from December 3.

The congestion appears to be the result of a combination of bad weather affecting operations and port operator Transnet experiencing equipment problems.

SAAFF says: "This crisis is arguably more serious than last October's strike, as the huge economic cost of the 96 vessels waiting outside our port cannot be underestimated and the current situation must be put into perspective. Despite the crisis, port operations over the past week have once again been plagued by adverse weather conditions as well as equipment failures and shortages."

The Durban terminal was the most severely affected, with ships delayed by about nine days. Cape Town was affected by bad weather, and the arrival of new equipment was also delayed until the second week of December. However, congestion has eased.

But SAAFF says: "Unfortunately, this is not due to any improvement in performance or productivity, but rather due to a drop in freight volumes and port-hopping Cape Town, which is clearly visible in the Ngqura statistics.

SAAFF urges stakeholders to work together to help ease congestion, but notes that it will take some time to find a solution. SAAFF head of research and development, Jacob van Rensburg, says that while there is some hope, there is only a little bit of hope in the short term. Airfreight may help alleviate some of the congestion. However, he noted that small and medium-sized shippers are the most affected by delays and that airfreight is not a "viable option" for many.

The congestion can and will be resolved, but probably not until the end of January or early February," he said. The main reason is the lack of available equipment, as Transnet has not kept pace with maintenance, especially half-life maintenance of key equipment. The problem is multi-faceted and long-term which means that the current action is really a handful." He adds that some shipping companies have chosen to move their cargo through Port Louis as a transshipment port in South Africa.

SAAFF notes, "A major issue is the status of Transnet. Fortunately, we are working immediately with industry partners to procure available equipment. In addition, a long-term OEM strategy is expected to be finalized by the end of this year, designed to address the equipment challenge by awarding contracts for major equipment from 48 brands.

"Container handling equipment is expected to be delivered within six to 24 months."

Transnet wants to partner with the private sector to help modernize infrastructure, while SAAFF believes that all stakeholders in South Africa should work together.

SAAFF calculates that the indirect cost to the economy is R26 million per day, while about R7 billion in goods transportation is disrupted.
"In short, the current situation is that there is a net sunk cost of at least R48,5 million for just one day at anchor. In addition, this figure jumps to R98 million with the pending implementation of the container port congestion surcharge. In the current situation, we are already paying almost 10% more in direct costs."

SAAFF concludes, "We must improve operational efficiencies and increase throughput, or the trade, transport, and logistics sectors will continue to inhibit South Africa's much-needed economic growth."