The South African Association of Freight Forwarders (SAAFF) has issued a grave statement regarding the nation’s crippling logistics crisis at ports, revealing shocking statistics that point to an unprecedented challenge impacting the country’s economy.
At present, a staggering 96 vessels lay stranded at anchorage outside Mzansi’s commercial ports, inflicting an economic haemorrhage of R98 million per day in direct costs, with an additional R26 million in indirect costs. Moreover, this gridlock is obstructing the movement of goods valued at a colossal R7 billion daily.
Experts say the ports crisis in South Africa severely impacts agriculture by disrupting timely exports of perishable goods. Delays compromise product quality, leading to losses for farmers. Additionally, it hampers imports of crucial agricultural inputs, affecting domestic farming and food security.
Impact, costs, and looming economic peril
SAAFF chief executive Dr Juanita Maree warns this crisis, deemed more impactful than prior disruptions, is hampering port operations due to a trifecta of adverse weather conditions, equipment breakdowns, and shortages.
While modest improvements have been observed in Cape Town and Port Elizabeth, Durban terminals remain severely delayed, with wait times extending to nine days.
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To contextualise the financial toll, the current situation incurs a direct logistics cost of R48.5 million per day.
This figure skyrockets to R98 million daily with the implementation of port congestion surcharges for containers. Indirectly, the crisis accounts for additional costs ranging from R26 million to a staggering R165 million per day due to halted cargo movement and time delays.
The implications extend beyond financial losses, argues Maree. International shipping operates on tight schedules, disrupted by the current backlog, leading shipping lines to divert their routes via alternate ports like Port Louis in Mauritius. Small and medium-sized enterprises (SMMEs) bear the brunt, facing imminent losses as buffer stocks deplete and sales falter.
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Modern infrastructure is a must
Recent throughput figures across commercial ports demonstrate a partial recovery, yet they linger around 84% of terminal capacities. Though showing a promising 28% and 13% increase for Cape Town and Durban respectively compared to last year’s averages, these figures underscore the enormity of the challenge at hand.
Maree believes the root cause lies in Transnet’s challenges – ageing infrastructure and historical underinvestment. Immediate actions are underway, with collaborations to source necessary equipment and a long-term strategy involving OEM contracts and a 10-year supply of spare parts aiming to address these deficiencies.
However, the pressing need for public-private partnerships to modernise infrastructure and streamline operations cannot be overstated. Urgent and collective efforts are imperative to revolutionise the archaic operating model and resuscitate a floundering trade, transport, and logistics industry.
The call for collaboration is universal, says Maree – from Transnet and the government to private sector entities, including cargo owners, freight agents, and shipping lines. Without an immediate overhaul to enhance operational efficiency and increase throughput, South Africa’s economic growth will continue to be stifled.
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