Port Congestion Update
Dear Customers
We are well aware that every importer and exporter is seeking solutions and strategies to the critical port delay scenario. Attached are a few of the many publications highlighting the current port conditions and reasons for the issues at hand as well as changes being applied to schedules by shipping lines because of congestion delays. In this communication we will try to cover as briefly as possible an update as well as insight into the commonly posed questions and our comments in this regard.
Current Port Performance
There has been no significant improvement in port performance at any of SA ports over the last week. Equipment breakdowns and weather delays are still negatively impacting all port performance. Productivity in terms of container movements remains 25-30% off acceptable minimum norms. High winds in all ports over the last week has resulted in many lost operational hours. Bookings for collections remain problematic and out bound truck movement is seriously congested.
Berthing Delays:
Little improvement in this regard – average berthing delays in Durban 14 days, Coega and PE 7 days, Cape Town 7-14 days. Vessels awaiting berthing at each port illustrated below.
Changes to Cape Town / Coega Schedules.
To try and maintain some integrity in the intercontinental routings, many shipping lines are changing their SA port calls and schedules. The most significant of these effect Cape Town where MSC, Maersk and CMA (and any of the lines slot chartering with these carriers) have chosen to route Cape Town destined cargo either via Durban then onto coastal services to Cape Town (MSC) or via Mauritius and on carriage via weekly coastal feeder services (Maersk and CMA). As an example, see Maersk advisory attached for Far East services. Most shipping lines, especially on the Far East trade lane have stopped calling Coega / PE as a direct option and are transhipping via Durban. There have been very limited changes in routings for USA and European trades at this point.
Interventions for correction of port performance.
Nothing definitive has been shared with industry other than the matter is receiving top Government attention with Transnet and the private sector. There are negotiations underway for some privatisation which has been reported in the press but the timing, viability, extent, and progress in this regard is largely unknown at is point. Feedback on recovery in terms of equipment repairs varies from 8-12 weeks in the case of Durban to 3 to 4 weeks in the case of PE and Cape Town. Staffing performance issues remain a critical concern.
Transshipment port delays and space availability
Congestion is not unique to South Africa at present and there is severe congestion and delays at transshipment ports globally, especially Singapore where we are seeing delays of up to 4 weeks. It is also noted that on many routes there are space restrictions, and many lines are reporting fully booked vessels up to two weeks before sailing, especially from main hubs such as Shanghai and Shekou.
Port Congestion Surcharge
Various shipping lines have confirmed a port congestion surcharge that will be applicable from early December with charges per TEU varying between $200-$210. We anticipate the NVOCC’s to apply this same surcharge for LCL cargo from $10 per w/m to all import shipments.
SCT Comments and suggestions:
- Recovery: We do not foresee the congestion issue being solved quickly and forecast that current berthing delays are unlikely to change until early 2024 – on that basis we once again recommend that at least two weeks additional lead time is placed into all planning and ordering.
- Cape Town – The new schedules and routings announced in the last two days are still being assessed in detail and we expect changes from those lines not yet published. It seems there will be very few direct Cape Town options available on the Far East Route. It does seem at this stage as if no changes are being applied to the European routings into Cape Town. SCT are still assessing all options but with the berthing delays in Durban and limited calls direct to Coega / PE it looks like the lines routing via Port Louis could be the most reliable and quickest option. Transit times from main far east ports will be approximately 45 days in Cape Town via Port Louis. Port Louis is a large reliable port with limited congestion problems at present and the feeder service looks to be capable of handling the anticipated volumes. Whilst early in assessment it does appear a favourable albeit longer transit option.
- Alternatives to Durban: Because so many of the routing globally call Durban first, selection of Coega / PE or Cape Town does not in many cases offer a quicker access to freight. Added, the current routing changes being applied by major carriers means that on many routes Coega and Cape Town are not direct service options anymore. SCT are reviewing the use of Walvis Bay and Maputo for both Cape and Gauteng bound cargo and should have solutions and viability assessed within the next few days., Obviously one needs to select lines that omit SA ports when calling these two port options, but they are available. Assessing the increased freight costs, customs processes required, as well as the bond movement costs to final deliver in SA is being undertaken. We are also assessing with Carriers on these routes whether they would accept empty turn in of containers in SA and whether they would apply excessive container deposit fees – both of which could restrict these options. We have applied for through bill options to JHB via Maputo with relevant carriers and await their options (if available) transit times and costs There is no doubt there will be significant costs involved in these alternatives and many practical restrictions to consider, but we will share these assessments in more detail in the days ahead.
- LCL Cargo for Cape Town. Origin country for LCL has an impact on the options available to SCT in terms of direct services to SA ports and especially Cape Town. We are assessing with NVOCC’s on each route the options and costs of terminating Cape destined cargo in Durban or Coega as well their routings and plans for Cape Town destined containers so that we are in a position to best advise Cape Town clients.
- Proactive planning: Within the limitations of the fact that sea freight decisions are made 6 weeks in advance, and also that shipping line schedules and routings are often changing with exceptionally short or no notice, we wish to assure all our customers that our freight team is exploring every conceivable routing and cost on each and every job and will offer where applicable the options for your consideration.
- Christmas shut down planning : We continue to monitor all delayed cargo that may arrive during shut down periods and will proactively communicate with importers as well as plan with lines, truckers, and depots to achieve the best possible outcome until facilities are open to receive.
We are sure that there are many concerns and questions, and we encourage you to call us should you wish to discuss any matter further. In times like this we may not always have a solution to every challenge we face, but you can be assured you that we are not just accepting this as a new norm and guarantee our attention to detail, innovative review of all options, passion, and proactive approach to every single shipment.
Gary Knight, MD.