The announcement by Transnet Port Terminals (TPT) that container handling rates will rise by 7% across-the-board from April 1 has left the industry reeling. This will apply to container tariffs at both the container and multi-purpose terminals. However, the terminal handling charges for empty containers (imports and exports only) are to be increased by a lower rate of 4%. TPT made the usual conciliatory noises about it having been a tough year – and the increased tariffs, said its statement, were “in order to deal with current operating cost pressures”. But members of the freight industry were not convinced. “It’s not an increase that’s justifiable,” said Margrit Wolff, MD of Buffalo Freight, “and not one we should accept, because that just encourages inflation. “People in SA just accept price increases, and literally think their way into more inflation. “Anyway, how do TPT think they can get away with a 7% increase when their landlords – the Transnet National Ports Authority (TNPA) – only got 4.42%?” The big problem here is that the TPT does not fall under the jurisdiction of the national ports regulator – which cut TNPA’s original application for a 10.62% rate hike to that more sanesounding 4.42%. This was confirmed by Andrew Pike, maritime lawyer and member of the ports regulator board. “On this subject, I am talking as an individual, not as a board member,” he stressed to FTW. “I have a personal concern that the TPT is not regulated and the TNPA is – and that they’re both subsidiaries of the same organisation. “That leaves the ports partially regulated, and partially unregulated – an unhealthy situation.” In discussions at FTW, it also came to mind that this would hypothetically allow TNPA – if it didn’t get what it wanted in tariff increases – to persuade sister company TPT to hike its rates by more than was justified. But even this year’s 4.42% and 7% by TNPA and TPT respectively are anything but justified, according to members of the shipping line industry. “We’re fighting the increases because we don’t believe they deserve them,” one well-placed shipping line source told FTW. “If there’s any increase it should be based on productivity – which, in fact, is right down. Congestion cost the lines a lot of money last year. “As lines we will accept an increase on the basis of service – if they can do 25 moves an hour, for example.” But they don’t, and they still made a profit, he added. “So we will argue that one.” According to our source, management is the problem. “Consultant after consultant has told them it’s not the equipment. The test will come again in April – but under current circumstances they shouldn’t be asking for any increase.” Andrew Thomas, CEO of Ocean Africa Container Lines (OACL) agreed with that productivity argument. “Seven percent? I doubt that would be achievable in a competitive environment,” he told FTW, “and I’d like to see the tariff related to productivity. That’s not the case at the moment.” He did, however, think that continuing the differentiation between empty containers (a 4% increase) and laden (7% hike) for the second year is sensible pricing strategy – even if both figures are just too high, and the differentiation should be even greater. Another prominent executive in the SA freight industry slammed TPT behaviour as “monopolistic”, and suggested that the only answer was to let the private sector in to compete. “They hold 100% of the market,” he said, “and there’s just no competition to push down prices. “Anyway, their basic rates are already far too high, and even a relatively small percentage increase is a lot extra. “They need to let the private sector into the ports if we’re ever going to see proper market rates.”
