Industry hits out at Portnet's 'number-crunching' tactics

23 Feb 2001 - By Staff reporter

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Increased rates, but what about productivity, writes Alan Peat

THE SEAFREIGHT industry is up in arms as Portnet substitutes number crunching for rates restructuring.
This follows the release by the port authority division (PAD) of its tariff review for April 1 where the maritime services rose by an average of 9.25%, and the contentious ad valorem wharfage was re-introduced in a new guise.
At time of writing, all the industry bodies - such as ASL (Association of Shipping Lines); ASABOSA (Association of Ships Agents and Brokers of SA); the Container Liner Operators' Forum; SAAFF (SA Association of Freight Forwarders); and the SA Shippers Council - were in the throes of arranging meetings to discuss the matter.
But the industry dissatisfaction was clear.
Here was an interim measure, FTW was told, which was supposed to tide Portnet and the shipping industry over until the new rates structure (originally promised for that April 1 dating) could be finally persuaded into place.
But what do we get?
Another set of tariff increases which are neither market nor cost related, and with no increased productivity, was the consensus of opinion amongst the industry bodies.
This is not related to work being done and equipment being used, said Syd Frederic, regional director of JH Bachmann, and Durban chairman for SAAFF.
It should be pay for what you get, and get what you pay for. They shouldn't just be trying to balance the books to make themselves look better - that's still the old bureaucratic culture's way of doing things.
Market related, cost related. And there shouldn't be any increases without increased productivity.
Alan Rolfe, operations manager for MSC and chairman of the ASL, agrees.
'It should be pay for what you get, and get what you pay for.'
The concern to the lines is that the charges to the ships have gone up by 9-10% along with other recent increases such as for weekend working, he said.
We want to see any increase tied in to improved productivity. But it's not - it's across the board. Take it or leave it.
MSC chairman, Salvatore Sarno, meantime, was taking his disgruntlement off to a meeting of all the major lines. They want us to pay more, he said. For what?
That's the answer we're looking for.
Brett Gray, m.d. of SATI and a member of the liner forum, meantime, is looking for a meeting with Portnet. We need to discuss the whole matter, he said.
And the port operations division (POD) not having yet released its operational tariffs for April 1 doesn't help things, Gray added.
You need to know those figures as well, he said, if you're wanting to see the whole picture.
The resurrection of the ad valorem wharfage with its new formula equally irritates the shipping industry, which is looking for this non-cost-related charge to disappear. While this is unlikely, the industry has expressed itself willing to accept one of the possible alternatives - a set-rate wharfage levy which would be dedicated to port maintenance/repair.
But what have we got? asked Nolene Lossau of Worldwide, and executive director of the Shippers Council. Smoke and mirrors.
But that's no use when what they're actually doing is intensifying their money-making focus on high value cargoes.
Gavin Cooper, m.d. of Seair Freight and Cape chairman of SAAFF, agrees.
They are reducing on the one hand, and maintaining on the other, he said. These new ad valorem charges are not demonstrating a commitment to lowering port costs. Only a relatively small proportion will benefit.
This he supports with calculations of the old against the new.
In the case of a full import container valued at the new maximum value of
R9 423/ton you'd show a saving of 25 cents over the old. For an export box, even less, at 13 cents.
At minimum value you'd actually pay more - an extra 19c for imports, and 9c for exports.
Admittedly, in the middle (at goods valued at R4 000/t) you would save R89.60 on an import box, and R44.80 on an export container.
But that's all meaningless in the reality of things, according to Ršhlig Grindrod's operations director Brian Mulligan. In essence, he said, any saving really only applies to high-bulk, low-value cargoes.
It's a clever juggling of values per ton and percentages.
This was all aimed at PAD's chief executive, Siyabonga Gama, pointing to this tariff increase announcement demonstrating PAD's commitment to lower port costs.
This, Gama added, by effecting a downward adjustment to the ad valorem wharfage charge.
But his following sentence basically agrees with the private sector's comments about giving with one hand, but taking with the other.
Said Gama: Concurrent with this (reduction in wharfage charge) we will adjust the minimum and maximum value.....to retain the existing unit wharfage per ton payable by cargoes that qualify for minimum and maximum wharfage.