Transnet National Ports Authority, which manages all eight SA commercial ports, is battling delays at the Cape Town Harbour resulting in backlogs of nine days or more.
The port is a critical channel for the movement of goods and is a major economic gateway for the province, with imports and exports amounting to more than R150bn per year.
Importers and exporters have recently been left frustrated amid operational challenges including ageing, out-of-service infrastructure and congestion. Similar issues have also hampered other ports in the country, not least those at Durban and Richards Bay.
Wandisa Vazi, a managing executive of Transnet’s Cape Terminals, said the port is currently averaging a delay of 216 hours, or nine days. The delays, she said, are due to time lost in December due to heavy winds that often prevent safe entry into the port and its terminals, power outages and two non-operational days on Christmas and New Year’s Day causing a backlog of nine vessels at anchor.
Vazi said various initiatives are in place to clear the backlogs, including plans to move employees from the other terminals nationally to Cape Town. The terminal is also collaborating with original equipment manufacturers for increased turnaround of spares availability and maintenance, deploying engineering expertise from other terminals and Transnet operating divisions to prioritise equipment performance.
James Cunningham, a Western Cape-based businessman involved in moving machinery and various industrial equipment, is one of the many port users fearing huge losses due to inefficiencies at the harbour.
“The situation at the Cape Town Harbour has been worsening in recent months and many exporters and importers face huge financial costs as a result,” Cunningham says.
Long lines
His company has had containers outside the harbour from January 9, but offloading is only scheduled to start on January 25.
“That and the long lines of trucks waiting outside the docks every morning strongly suggest that despite almost three years of expressed concern, nothing has been actually done to rectify the situation.”
Cunningham highlights that the wine and fruit exporters, important contributors to the economy, have been the hardest hit by the latest operational crisis at the port.
The wine industry, which is largely based in the Western Cape and is a big foreign currency earner contributing R55bn (1.1%) to GDP, recently stated that due to the various logistical challenges there is great uncertainty regarding lead times (the time between placing and receiving of orders), and in many cases two to three weeks have to be added due to delays.
Another issue is that the shipping of fruit containers is prioritised over wine largely because of the perishability of fruit.
In December Transnet declared force majeure at the Cape Town Container Terminal and the Cape Town Multi-Purpose Terminal after a power outage, as it moved to avoid liability for being unable to fulfil its contractual obligations. More than 1,000 containers containing fruit for export to the EU, including table grapes and blueberries, were left for up to 36 hours without power, compromising the quality of fruit.
This also resulted in backlogs, and continues to disrupt supply chains, as importers, including retailers, are forced to wait longer for goods. Importers and exporters have warned that the delays could increase logistics costs by up to 25%, which will be passed on to consumers.
High charges
Making matters worse are the already high cost of tariffs that has resulted in an increased use of other ports in the region at the expense of SA ports. Transnet aims to increase tariffs by up to 24% in the 2022/2023 financial year.
In 2021, the Minerals Council SA, the mining industry lobby body representing about 90% of the country’s mineral output, highlighted that port charges in SA were higher than competitors’, and the cost structure of Transnet’s port charges needed to be rebased to improve competitiveness. It said that at $117 per 20-foot container, SA is currently located in the upper-middle cost quartile of the top 50 terminals worldwide.
Agri Western Cape, an association that represents commercial farmers in the province, said turnaround times at the Cape Town port have improved.
“We are aware of the current issues at the port of Cape Town. All relevant parties have already met with top management of the port authorities to navigate these complications as effectively as possible… improvements have already been made, which means there is movement in the right direction,” said Agri Western Cape CEO Jannie Strydom.
But for Cunningham, a lasting solution would be to give the DA-led Western Cape provincial government a greater say in the management of the port.
“Transnet Port Terminals must be removed and this crucial facility managed by the Western Cape government instead. After all, if Cape Town Harbour continues to malfunction, the province itself is doomed.”
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