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SA consumers may bear brunt of Cape Town harbour’s shipping congestion

Ships are queuing to berth at the Cape Town harbour because of delays and congestion. picture: Leon Lestrade/African News Agency (ANA)

Ships are queuing to berth at the Cape Town harbour because of delays and congestion. picture: Leon Lestrade/African News Agency (ANA)

Published Jan 16, 2022

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CAPE TOWN - CONSUMERS may have to dig deep into their pockets owing to congestion at Cape Town harbour that is leading to cargo ships waiting for up to 14 days to berth, causing frustration among exporters and shipping companies, as well as further stressing supply chains, as retailers with fast-emptying selves wait for imported goods.

Furthermore, the provincial government’s hopes of economic recovery, which had been pinned on the export market to boost economic growth in the wake of a slump in the tourism sector following the pandemic, have been undermined, with some industries looking to make a beeline for the country's other ports.

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Transnet claims bad weather, the public holidays, the city's December power outage and staff absenteeism due to Covid-19 are to blame for the current harbour congestion.

It can take up to 14 days for cargo ships to berth before the lengthy process of dealing with customs and offloading and clearing cargo begins. Then each ship needs to be prepared for exporting goods.

The provincial Department of Economic Development and Tourism said all sectors were affected, but industries that were hardest hit included fruit, wine and frozen fish.

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“Exporters have indicated that delays are adding 25% to their logistics costs. It could be much worse if cargo is adversely affected by interruptions in cold-chain protocols,” said the department’s spokesman, Joe-Mark Arnold.

Goods worth more than R136 billion were exported from the Western Cape last year. Agriculture, which accounted for 53% of the nation’s exports, saw goods sold totalling R78 billion.

Transnet Port Terminals spokesman Sinenhlanhla Makhanya said they were working hard to resolve the issue. “The terminal is working around the clock to clear the backlog.”

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Makhanya said the equipment available had been increased to 24 rubber-tyre gantry cranes, with 30% of the fleet able to operate under windy conditions of up to 90km/h.

“Ship-to-shore crane availability has also improved after it dipped to five due to breakdowns. Currently, seven of the eight ship-to-shore cranes are in operation, with the outstanding crane due back this week.”

The exporters said it was difficult to calculate the cost to the economy of the delays, but they could run to billions of rands.

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Chairman of the Exporters Club Western Cape Terry Gale said the delays also came during the peak reefer season, when time-sensitive delays “could not be entertained”.

He said Transnet had been disrupted by a cyber attack in July, and then further negatively affected by the riots and looting in other parts of the country in the same month.

“This has been going on for months now. The system has never really recovered since then,” said Gale.

He said the December holiday season had also had a negative impact on the harbour, with many port workers away and new reports of Covid-19 in the terminals, resulting in absenteeism.

The wine industry also expressed concern about the uncertainty regarding lead times caused by the delays.

“In many cases, two to three weeks have to be added due to delays. The Cape Town port's operational efficiency is unfortunately not world-standard either.

“The infrastructure and equipment of the port is outdated and lacks large-scale investment,” said Wanda Augustyn, the spokesperson for Vinpro.

Augustyn said the industry also struggled to get empty bulk containers in time to use for shipping.

“The shipping of fruit containers is prioritised over wine due to peak season for certain fruit exports, in particular, but also because of the perishability of the product. However, in many cases this means that shipping companies simply let wine exporters know at short notice that there is no space available,” said Augustyn.

The industry was now looking into using the Durban, Gqeberha and Walvis Bay ports, as well as shipping wine in alternative cargo containers and finding alternative shipping companies that had capacity.

“Vinpro is in constant discussions with Transnet, and also shipping agents and shipping companies, about the efficiency of the port,” she added.

The delays also had a ripple effect on the transport freight industry, with reports this week that truck congestion was being experienced around the port.

Some importers warned that disruptions to the freight process often led to substantial costs, which were in turn passed on to consumers.

In an article for Retailing Africa, Denys Hobson, a logistics and pricing analyst at Investec for Business, warned it was not just that retailers might find themselves paying more for imported goods – the real danger is that stock may not even get to the shelves on time owing to port congestion.

He said this had a domino effect with regard to the final cost passed on to consumers. Severe shipping congestion was expected to last throughout the peak sales season. He noted that goods from China would also be affected by the Chinese new year.

Executive director of the National Clothing Retail Federation Michael Lawrence said the industry had learnt some lessons from the Covid-19 disruptions, which had necessitated a change in planning time frames.

Lawrence said that, where delays were experienced, products were redirected through air freight. However, the substantial disruption of the freight process caused high costs that were passed on to consumers.

Agri Western Cape said it had met with the management of the port to “navigate these complications as effectively as possible”.

“Improvements have already been made, which means there is movement in the right direction,” said the organisation’s chief executive, Jannie Strydom.

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