A moving target for importers

Curbing logjams and ensuring the timeous extraction of essential goods at the country’s ports are critical to keeping the supply chain system going and mitigating costs for importers, especially smaller businesses.

With just over 24 hours to go before South Africa’s nationwide lockdown kicks in, importers of goods have expressed concern about the impact of reduced capacity at the country’s ports. 

A vital cog in South Africa’s logistics and supply chain system, the ports remain open, but at reduced levels.

Medical and food supplies will be prioritised during the 21-day lockdown that starts at midnight on Thursday, March 26 2020.

Transnet Port Terminals has communicated changes to industry bodies, some of whom have expressed concern about infrastructure management of the revised system with the number of berths, piers and staff levels being cut. 

The country’s main ports will continue to operate but berths at Durban and Cape Town, Port Elizabeth and the deep water Port of Ngqura in the Eastern Cape have been reduced while Richards Bay and East London are being closed during the Covid-19 lockdown. 

In line with a declaration of a force majeure, Transnet as custodian of the country’s ports and terminals has suspended the usual berthing windows at ports.

This means that all essential cargo as defined by the government in the wake of the Coronavirus will be prioritised while non-essential shipments including general freight and mineral containers are being discouraged during this period. 

Shipping lines will have to produce mandatory import evacuation plans prior to berthing in a bid to maintain fluidity of the system during the lockdown. 

This, Transnet says, is vital to avoid severe consequences of blocked terminals and as such it reserves the right to block ships from berthing without the submission of prior paperwork. 

“We require all clearance and assignment containers prior to berthing.”

Ships currently en route to South Africa will have to comply with the revised system and importers are warned to take note of potential cost implications caused by additional storage requirements due to the lockdown. 

Transnet, in its missive to industry bodies, also highlighted that some logistics companies will not be able to receive containers for delivery as they have closed or reduced operations ahead of the lockdown. 

“In this case, it is the responsibility of the shipping line/freight forwarder to move these containers to a depot or bonded warehouse within the free period.”

Maersk, the global container ship operator, has communicated a price reduction and free time extension of up to 15 days (up from five days) for affected importers. 

“In light of the lockdown, we realise that some Cargo owners will temporarily cease operations during this period resulting in the disruption of imports and exports.”

Maersk is extending the free time for exports from five to 15 days and is waiving fees for amendments and cancellation of spot bookings during the lockdown.

The company is also reducing rail cancellation and redirection fees by 50% in addition to other cost reductions for cargo moving on overstay to depot facilities. 

Freight forwarding companies have expressed concern around the costs of extended storage in the event they are unable to collect and dispatch goods to importers around the country quickly enough. 

Daily Maverick understands that could cost importers anything between R2,500 and R6,000 a day in some cases. 

David Logan, CEO of the South African Freight Forwarders Association urged port management to ensure that incoming ships are offloaded as swiftly as possible to allow goods to move on to its destination around the country during the lockdown.

While it is important that essential goods are prioritised, it must be noted that sometimes those containers are on vessels carrying a variety of non-essential goods so timing in terms of physical offloading is vital. 

Thus, curbing logjams and ensuring the timeous physical extraction of goods at those ports that remain open must be prioritised to keep the system going. 

Government is expected to release a full list of essential goods during a ministerial briefing later on Wednesday, 25 March 2020. 

AgriSA CEO, Omri van Zyl, reckons while it will be business as usual for this sector – declared an essential one in terms of newly Gazetted regulations, the impact of reduced staffing levels at the ports must be monitored to ensure efficiency. 

And, says Van Zyl, the impact of the South African lockdown, coupled with global responses to the virus, is likely to be a moving target for the local agricultural sector too.

A net exporter at US$10-billion a year, this sector has its own list of priority goods – with items such as citrus (SA is the world’s biggest exporter) or bananas (imported out of season) taking priority over those with a longer shelf life like nuts or wool and, most likely, timber. 

Anything that could cause logjams must be addressed as a priority. This includes the monitoring of trans-shipments of minerals moving from other African countries for loading and dispatch through South African ports as a large volume of trucks in and out of the harbours may affect the offloading and extraction of essential goods.

Agriculture minister, Thoko Didiza, said on Tuesday that despite the lockdown, the country’s food supply sector will not be compromised. 

*Container loads of goods stuck in storage for an extended period pose a significant cost headache for business, especially the small guy. DM

This story was triggered by an enquiry from a Daily Maverick Insider.