Worsening delays at the Durban port are forcing a handful of retailers to fly clothing and shoes into SA at a high cost, damaging SA’s reputation as a reliable trading partner and potentially jeopardising its competitiveness in the global economy.
Broken equipment has caused a crisis at the Durban port, which handles about 60% of the country’s container traffic and suffers from long waiting times and penalty fees imposed by carriers. Other ports in SA face similar issues, affecting the country’s trade and economy.
Stock for some retailers, including Woolworths and Truworths, is getting stuck at harbours, while other importers have been forced to fly in clothing and shoes at great cost.
Some exporters in China and Taiwan are becoming reluctant to send apparel to SA because of how long containers that are booked for other journeys sit in the harbour, said a source who asked not to be named. The source added that they are aware of two listed clothing companies flying in products they would usually ship.
The high cost of getting goods into SA means profit margins on their sales will be lower at the same time as consumers are spending less on fashion as high interest rates and a cost-of-living crisis bite.
The crisis at the ports, which are run by Transnet, has also harmed SA’s image as a reliable trading partner and could put its competitiveness in the global economy at risk of being eroded. Mining houses have highlighted that issues at the ports reduce their ability to export enough stock, and exporters that send fruit to European markets from Cape Town say the delays mean fresh produce is arriving overseas too late and is poor quality.
Clothing retailers are heading into peak season, starting with Black Friday at the end of November and must have sufficient stock on hand, but most say they ordered goods months in advance and are adequately stocked.
However, the usual delays at Durban port have worsened, with some ships waiting at sea for at least three weeks before getting a berth.
Website Freight News said this week Hapag-Lloyd has became the latest carrier to institute penalty fees for delays experienced along the SA coastline. Maersk, MSC and CMA CGM have already added penalties due to delays.
SA Association of Freight Forwarders director Mike Walwyn said problems at ports are systemic, but things are worse at the moment and every port in SA is “in trouble”.
He said ships are bypassing SA, dropping goods further up Africa’s east coast.
“We are a huge importer of consumer products and so I think there would be gaps on the shelves come Christmas time.”
Woolworths said in a trading update on Wednesday that sales in recent weeks were lower due to the “late arrival of certain summer ranges, arising from congestion at the ports”.
It added in a media response to Business Day: “Congestion-related delays at both Durban and Cape Town ports continue to affect our regular flow of stock. To combat this, we’re using alternative ports and road freight as a contingency plan.”
It says it has enough stock and expects “minimal impact on Black Friday and Christmas”.
Truworths joint deputy CEO Sarah Proudfoot said it has sufficient stock for the festive season but faced delays in September.
“There have been issues with both labour and machinery at Durban port, which did have some impact on deliveries in September. There were also delays in Cape Town due to wind. Both issues delayed some stock but due to our significant local production component and different countries of origin the impact was not significant.”
Nearly all fabric in SA is imported.
Proudfoot said some of the Truworths supplier factories are short of fabric as a result, which is delaying deliveries and causing them to work shorter hours. But she said Truworths is not flying in any more goods than usual.
Bad reputation
While a lot of criticism over the crisis has come from SA exporters whose goods cannot reach foreign markets in time, FrontierCo Group CEO Bernard Mostert, who owns a number of fashion and lifestyle brands, said: “As a country we are unfortunately developing a bad reputation in manufacturing countries as containers stuck in the Durban harbour are already booked for other routes and are then delayed.”
Flying in stock when it has already been sent by ship is not unheard of. Last week, Ford Africa president Neale Hill told Business Day that shipping companies told it and other firms they would not wait at Durban port indefinitely and left after some time. Ford is then forced to fly in parts for the vehicles it manufactures. “We end up duplicating our stock holdings. So we’ve got parts in containers at sea and then we end up air freighting at a premium cost.”
But most clothing and general merchandise retailers say that while issues at the ports are significant, they have sufficient stock for the upcoming festive season trade thanks to ordering months in advance.
TFG, Shoprite, Pick n Pay and Massmart all said they have adequate stock levels and Mr Price would not comment, saying it was in a closed period.
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