Shipping giants hit SA containers with congestion charges amid massive delays at ports

Source: EngineeringNews
Date: 7th November 2023

Shipping giants Mediterranean Shipping Company (MSC) and Maersk have announced a costly fee for congested vessels this December due to severe delays at South African ports.

In its announcement, MSC said: “Due to congestion in the South African ports and generating difficult conditions to operate, MSC will as of 3 December, apply a CGS (congestion surcharge) for cargo to all South African ports to maintain our services provided”.

Cargo owners will be expected to pay an estimated $210 (R3 850) per shipping container due to congestion.

Meanwhile, Danish company Maersk will impose a Congestion Fee Destination (CFD) of between $200 and $400 per shipping container from 1 December, it announced.

Earlier this year, French shipping company Compagnie Maritime d’Affrètement Compagnie Générale Maritime (CMA CGM) announced a CGS of $250 per shipping container for cargo from Asian countries.

The head of research and development at the SA Association of Freight Forwarders (SAAFF) said the surcharge is applied when vessels cannot load cargo due to traffic at the port. The fees will cover additional expenses incurred by shipping companies due to the delays, such as fuel and maintenance.

With the congestion surcharge, South African cargo owners will be expected to pay more than the global average per 40ft container.

If we consider that ocean transport is the most significant logistics cost for maritime shipping and currently trading around $1 406 per 40ft container, a PCS [Port Community System] of around $200 represents an additional $400 per 40ft. This means that South Africans are paying 28% more than the global average.

South African ports are increasingly under pressure with more than 60,000 shipping containers or eight days’ worth of cargo stuck at outer anchorage at the Durban port.

We are indeed in a logistics crisis, which must be addressed as soon as possible. Not only are we shipping the same containerised volumes during 2009 but we are 25% less productive than that time which is also deeply concerning.

South Africa has faced increasing delays due to equipment failure, unproductive booking systems, and low productivity at its ports.

70 vessels are currently stuck at the Durban port and the current waiting time at Durban port is between 18 to 20 days, as well as a further six to eight days for vessel discharging.

However, this could increase due to delays in truck booking systems that could add another two-day delay.

At the Eastern Cape Coega port, delays for vessels are currently between eight to 10 days, but cargo owners can expect further delays due to inefficient container booking systems.

Meanwhile, Cape Town’s port is experiencing high congestion. Thirteen vessels are currently anchored with delays ranging between 12 to 14 days. High wind, bad weather, and equipment failure have also led to delays and possible omissions.

In response to the congestion fees, Transnet Port Terminals (TPT) issued a notice saying it was aware of the congestion surcharge fees being imposed by both shipping companies.

“TPT remains committed to engaging with the shipping lines and our stakeholders to find amicable solutions which will promote recovery, reduce berthing delays, and restore fluidity to the supply chain,” the general manager of commercial and planning said in a statement.

Accordingly, TPT has asked for increased discussion between industry stakeholders and a possible review of the implementation of congestion surcharges.

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