Port congestion pushes up insurance rates

The Port of Durban remains under major stress – not only due to an increase in volumes but for several other contributing reasons, which in turn are adding significantly to insurance costs. According to Cheryl Beurel, speciality business unit head for Aon South Africa, with the average port turnaround time in the vicinity of 141 hours compared to the global average of 60 hours, an increase in losses/damages and theft to both cargo and containers is being experienced. “The impact on the insurance industry is an increase in rates and stricter policy conditions for cargo and container owners.” Aon South Africa provides insurance and reinsurance broking, risk consulting and human resource solutions not only locally but also across southern Africa and Africa as a whole. “It is vital to improve efficiencies should Durban want to remain the corridor to neighbouring countries,” says Beurel. “The harbour is being worked beyond its capacity. What is also causing stress is the lack of maintenance over the years that has impacted on infrastructure – and then there are also the various delays in the movement of cargo out of the port. All of this impacts on insurance.” It is more likely for incidents to occur when cargo is not moving efficiently, says Beurel. “The delays being experienced at Customs for removal in transit cargo being transported through South Africa to SADC countries is worrying. “Of course there is work taking place at the port to address some of the challenges, with the entrance channel now being deepened and widened to increase efficiencies. The challenge is deciding where the additional harbour facilities are to be based and what their primary use will be ie, containers or bulk shipments. The increase in volume places strain on the infrastructure and it is therefore essential that road capacity is expanded for the movement of cargo/containers from the port to inland destinations,” she says. “At the same time extending the harbour and finding a new container/break-bulk terminal should also be a priority.” In the meantime South Africa’s neighbours are not sitting around idly but are finding solutions every day that make them viable alternatives to the Port of Durban. CAPTION Cheryl Beurel … ‘South Africa’s neighbours are finding solutions every day.’