Lines explain how level of proposed congestion surcharge was reached There have been recent articles in the press regarding the level of lines proposed congestion surcharge levels, which require further clarification due to the lack of understanding of the magnitude of the problem. A simplistic calculation suggested that the surcharge should be calculated taking a 24-hour period of berthing delay divided by ship's cost and the number of containers, arriving at a considerably lower level than the posted US$ 75 per teu. There is however a large set of variables which have gone into the calculation to arrive at the average posted level and these can be summarised as follows: n Numerous services trading to and from South Africa have been unable to keep to scheduled weekly calls due to ongoing delays (averaging anything between 20-80 hours over the last six months and often even higher). This has required increased speed on main voyage legs due to loss of contingency the delays have created. This has resulted in substantially higher fuel costs as increased bunkers have been used to make up the time. n The lack of schedule integrity has result in port omissions in overseas ports to regain schedule dates. This has resulted in poor service to overseas customers due to missed ports and connections and heavy additional costs to lines mounting sea feeder operations to connect cargo from omitted ports (both exports and imports). n The resultant schedule damage caused by the delays cannot simply be made up by increased speed and port omissions and in a number of cases lines have introduced an additional vessel to the existing fleet to win back reliability. There are numerous examples of this but a recently introduced one is one of the Europe services, which had to introduce a seventh vessel to its fleet to maintain weekly frequency. This lengthened the voyage from 42 days to 49 days with the additional 7 days gained mostly being built into the Durban part of the voyage to cover for delays. Most other services trading to and from SA have introduced similar measures. The cost of 'buying' such reliability which importers and exporters expect runs into several million US$ per vessel. n The increased round voyage time of all lines' services also comes with a cost in terms of increased container equipment required as the turn time of units has been increased substantially. Backlog created by congestion has also increased the turn time of containers on land in South Africa. n Transhipment of containers in Durban has been poor due to loss of tighter connections and the resultant missed connections have also created additional cost to the lines in further increased turn time of their assets (containers). n There have been substantially increased landside costs for all lines with port omissions (expensive road haulage back to port omitted as well as sea feeding in SA). n Whilst difficult to account / measure there have also been substantial costs in people's time due to delays such as working longer hours, amending documentation. n The waiting time outside ports (only one item mentioned previously) is of course yet another cost in idle time as the vessel waits for a berth. The surcharge of US$ 75 is in many respects a limited recovery on the sort of costs lines have been incurring for several months and bears no relation to any contingency 'built into the freight rate'. The latter statement is without substance when one considers that freight levels to and from South Africa on all major trading lanes have at best been static or have seen declining levels over the last five years. Container Liner Operators Forum. Variables in the calculation l Higher fuel costs l Cost of overseas feeders l Additional vessels l Extra container equipment costs l Increased landside costs l Overtime salaries l Waiting time outside ports
