The request by Transnet National Ports Authority (TNPA) for a tariff increase of 8.45% for 2018/19 has raised serious industry concern over the possible major repercussions for South African trade.
The Ports Regulator of South Africa last week held public consultations in Johannesburg, Cape Town, Port Elizabeth and Durban on the TNPA tariff application which it received on August 1 this year.
TNPA is calling for a weighted average tariff adjustment of 8.45% with an average 10% increase request for marine services and 7.88% for cargo dues tariffs. Industry has reacted strongly against the aboveinflation tariff increases which they say will hit businesses hard.
Dave Watts, a consultant for the South African Association of Freight Forwarders (Saaff), said a 7.88% increase for cargo dues was simply too high. “It is simple as far as we are concerned. We hope the Ports Regulator will keep the tariff within the inflation rate,” he said.
“If a 7.88% increase is granted it will have a massive impact on port costs in the country.” Peter Besnard, CEO of the South African Association of Ship Operators and Owners (Saasoa), agreed saying a 10% increase for marine services was Industry hits out at above-inflation port tariff proposal extremely high.
“Under the present circumstances where you are supposed to have five tugs per shift but don’t due to mechanical failure, the unavailability of tugs, tug masters, engineers, pilot boats and pilots one could say there should be no increase,” he told FTW.
“One has to take cognisance of the fact that there are nine new tugs coming on stream albeit not all for Durban. Six have been delivered to other ports with three still to be delivered. Of course there are other problems like the helicopter down time that is very frequent – with all three now 20 years of age.”
He said when this occurred the port made use of the pilot boat to put pilots on board vessels – but when swells of four to five metres were experienced in both Durban and Richard Bay, the boats were grounded which effectively rendered the port closed.
A 10% increase under these kinds of circumstances was hardly justifiable. Besnard said while there was doubt the regulator would grant a 10% increase one could not rule it out. “He has been known to surprise. We are operating in extremely tough times and every cent counts to survive in what most people are referring to as a recession.”
Mitchell Brooke of the Citrus Growers’ Association said while there was nothing untoward about the tariff increase application and it had come across as fairly straightforward considering a new methodology for deriving the tariff had been proposed, they would be requesting that the regulator grant a less than 5% increase for the next three to five years for container cargo dues.
“Transnet Port Terminals have for the past four years increased tariffs in the range of 9%. They are in the unregulated environment and it has hit industry hard,” he said.
“We need to consider the broader picture of the TNPA tariff increase and look at addressing the imbalances that exist between the different commodities sooner rather than later.”
He said the regulator had in the past few years gradually been addressing the imbalances by looking at global benchmarks and granting lower increases than what TNPA was requesting.
This, he said, would hopefully be the case again this year. Tahra Sergeant, regional manager Africa for the International Bunker Industry Association, said the proposed increase of 10% was high given last year’s increase of 5% which at the time was also considered high.
“We have international class services available in all South African ports. However our port fees are perceived as high, and alongside scheduling issues this tends to discourage bunker only callers within South African ports.
IBIA will work closely with the PCC and local PLF to submit full commentary regarding this to assist with the argument for a fair increase.”
