Shipping powerhouses MSC and Maersk have announced congestion surcharge fees as delays plague South African ports. From the MSC official statement:

“Due to the congestion in the South African ports generating difficult conditions to operate, MSC will apply a Congestion Surcharge (CGS) for cargo from any destination except East and West Africa to all South African ports to maintain our services at the required level. As from 3 December 2023 (Bill of Lading date) onwards, the CGS will be charged USD 210/TEU for dry cargoes only.”

Meanwhile, Maersk’s Congestion Fees range from $200 to $400 per container starting December 1, and French company Compagnie Maritime d'Affrètement Compagnie Générale Maritime (CMA CGM) has already implemented a CGS of $250 for shipping arriving here from Asian countries.

These surcharges will impose severe restrictions on trade in South Africa as a whole, and particularly at the Port of Cape Town, which was left out of the infrastructural upgrading plan known as Vulindlela.

As this paper already reported, these delays have imposed serious losses and risks on the local deciduous fruit industry, and raised concerns that it may threaten the industry itself if the reliability of container systems was not soon rectified. Corporate capture of the national stevedore’s association creates additional concerns.

Cargo owners will bear the brunt of these fees. The move comes as South African ports face increasing pressure, with over 60,000 shipping containers stuck at the Durban port's outer anchorage. Vessels here have experienced up to 20-day delays.

Jacob van Rensburg, Head of Research and Development at the SA Association of Freight Forwarders, highlights the severity of the logistics crisis. South Africa's ports are grappling with equipment failures, unproductive booking systems, union disruption and low productivity, causing delays and congestion.

With 70 vessels currently stranded at Durban port and waiting times of 18 to 20 days, the situation may worsen due to additional delays in truck booking systems. The Eastern Cape Coega port faces delays of eight to 10 days, with expectations of further disruptions.

Cape Town's port reports high congestion, with 13 vessels anchored and delays ranging from 12 to 14 days. Transnet Port Terminals (TPT) acknowledges the congestion surcharge fees and expresses commitment to engaging with shipping lines and stakeholders for solutions.

TPT calls for increased discussions among industry stakeholders and a possible review of congestion surcharge implementation to alleviate the impact on the supply chain. As South Africa grapples with these challenges, the global average cost per 40ft container increases, making urgent solutions imperative.

Transnet is already facing serious financial challenges, with a reported request for R100 billion in debt relief put on hold by Finance Minister Enoch Godongwana. This comes on the back of an infamous bottom ranking from the World Bank’s container port performance  report in 2022, which ranked Cape Town at 344 out of 348 ports surveyed. The Ports Regulator of SA itself has repeatedly highlighted concerning operational challenges.

In response to the crisis at the port, Transnet is contemplating allowing private companies to tender their skilled workers for infrastructural repairs, particularly mechanics and millwrights. Additionally, there is an emphasis on expediting the procurement of essential equipment, with discussions underway regarding the associated costs and contractual arrangements.

The dysfunctional state of the port prompted warnings from finance and economic opportunities MEC Mireille Wenger about a potential export crisis at year's end. To address these challenges, Transnet and industry leaders from the fresh produce sector, including Hortgro, the SA Table Grape Industry, and the Fresh Produce Exporters Forum, are desperate to see the issues solved.

In a joint statement issued on Tuesday, they revealed plans to investigate contracting and seconding maintenance capacity from the private sector,

This crisis coincides unfavorably with the upcoming export season for the deciduous fruit sector, which is critical for the Western Cape, contributing over half of South Africa's agricultural exports.

Until the ports can be placed under new management, little is likely to change, and further decline can be expected.