Is a congestion surcharge on the cards?

The freight industry is bracing itself for a congestion surcharge as port delays continue unabated. “At the moment there are no indications as such that surcharges will be instituted but if the situation continues I am not sure how they can be ruled out,” Mike Walwyn, chairman of the Cape’s Port Liaison Forum, told FTW. “Already the freight rate out of the port of Durban to certain destinations is around $100 more than out of Cape Town – and whilst this has not been instituted as a surcharge, it is an increased freight rate which one can only assume is based on delays and congestion at Durban.” In October MSC announced the implementation of a port congestion surcharge of $300 per container for all imports to Chittagong from South Africa and Mozambique. Most lines reassess the surcharges when congestion improves. In Durban, ongoing delays due to the lack of equipment both land and sea side are affecting operations – a situation exacerbated by the recent storm. Last week an MOL vessel waited 11 days for a berth at the port. According to Terry Gale, chairman of the Exporters’ Club Western Cape, the impact of the congestion in Durban is being felt across the country. “In Cape Town, we have had no US sailing again this week,” he said. Walwyn said there were also no sailings to Europe from Cape Town on normal schedules as vessel planning remained chaotic due to the delays. “It depends on how long it takes for Durban to recover and how much time has to be made up,” he said. Industry stakeholders agree that a surcharge would not be surprising as carriers have had to deal with extraordinary costs due to the congestion. The Saecs service, for example, had to introduce an additional vessel into its rotation in an attempt to maintain schedule integrity due to delays in Durban. Making up the time lost at the Durban port also increases cost.