Port's Are Still Congested

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I have heard nothing lately about the South African port congestion in the news and thought it had been fixed. This is so far from the truth because it has not improved. I was reminded of this today after hearing about 1 vessel taking more than 2 weeks to off load it's cargo. One of our clients had one container delivered last week and the second container is only due off next week Tuesday. The reason being a broken crane that can only reach half the vessel so the the vessel needs to turn around allowing access to the other side.

The 8 days we see for the Port of Durban on the gocomet.com website is not real time and has not factored in the broken cranes. One can only laugh or cry because this is such a simple fix and it requires spending money. Transnet as a Government SOE is no different from the other SOE companies and unless you maintain what you have nothing will work and eventually come to a grinding halt. This is Africa summed up right here with no planning and no clue how to run any department.

I can only imagine what it must be like for the shipping agents because you cannot guess how long the delays will be depending on what side of the ship your container is located. The Port of Durban states it can handle over 12 000 containers per day which obviously it can't with broken equipment.

Transnet the owner of the Ports in South Africa had a net profit of R5 billion last year or $300 million if you convert. A port crane costs anywhere between $5 and $10 million each so even if they bought 10 per year they would still have $200 million left over for other upgrades.

The sad reality is this lack of investment is costing the country dearly in lost jobs mainly down to the lack of services. These two week delays on top pf the 8 day back log for every vessel has hidden costs like demurrage on every single container. These are extra costs being added to every single item being imported and no wonder inflation is through the roof. This directly impacts jobs with the low hanging fruit being booted out first because they can be replaced at a later date if things improve.

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Looking around the rest of the world the backlogs are not just in South Africa with Chine experiencing serious issues. China's problem is the Black swan event which we saw around Covid times with the shortages of containers. Containers are all in the wrong place and need to be returned either as empties or imports.

Back in January of this year there were warning signals with container leasing companies being out of stock. 40ft high cube containers which is the most popular big container are unavailable currently and that means taking 2 x 20ft containers instead which then leaves no 20ft containers available.

Just having these backlogs off the Chinese ports does not help because the containers they need are tied up with the ships waiting outside of the port. The other new variant that needs to be added to the equation is the shipping times with many vessels choosing to sail around the Cape of Good Hope adding an extra 7 days. This is due to the Red Sea crisis which means for the goods to be delivered like normal an extra 23 container ships are required at a average of 5K TEU's per vessel that is an 115 000 extra containers being required.

So if you think the port congestion crisis has gone away the truth is it hasn't and has actually deteriorated with the congestion or bottle neck being at source.