Shippers challenge lines' congestion surcharge plans

Alan Peat THERE IS a battle brewing between shippers and shipping lines about the proposed port congestion surcharge, possibly forced on the lines, they said, by the December logjam at the Port of Durban. This especially as the Port of Durban is considered as "almost back to normal", according to Nolene Lossau, executive director of the SA Shippers' Council (SASC). But the lines told FTW that the surcharge was still "under consideration", and no decision was likely to be finalised before mid-month. However, the shippers have their hackles up, accusing the lines of seeing the surcharge as a way of making easy, extra income. "The SASC is very disturbed at the shipping lines' threat to implement an additional port congestion surcharge," said Lossau. "We are all aware that the recent strike action has adversely affected the Durban container terminal (DCT), and all parties (shipping lines, exporters, importers etc) have been hurt by this action. "It has cost everyone a lot of money and has helped damage SA's reputation as a reliable supplier in the eyes of the world." Not only are shippers disturbed about the implementation of the surcharge, they are also questioning the figure that has been bandied around in shipping line circles. "The amount of US$75 per 20-foot container that the lines have mentioned just does not make any sense," said Lossau. In her calculations she worked out the average cost for the bigger container vessels being about US$20 000 per day on stand-down. "A typical ship sailing between SA and the Far East will carry about 1 600 import and 1 600 export containers - call it about 3 000 in-and-out," said Lossau. Dividing US$20 000 by 3 000 containers, this equates to US$6.66 per container per day of delay, she added. "How could the lines justify anything like US$75?" This she asked after looking at Portnet's figures for December 13, the height of the Durban logjam, when the average delay for the ships was running at around the 50-hour mark - or just over two days. It's a cost of about US$15 per container on Lossau's calculations. "Even if you double, or treble that figure," she said, "it comes nowhere near that rumoured US$75." But, said Dave Rennie, chairman of the Container Liner Operators' Forum, nothing has yet been finalised and no figure yet decided. "We are going to look at it again in mid-January," he told FTW, "and make a decision then." He also argues Lossau's statement that Durban is "back to normal" - with the average delay now being about the 15-hr mark. "That's not really the case," Rennie said, although agreeing with Portnet's "average delay" figure. "There are still some ships waiting for 40-hrs. "We shall see next week how we stand, and - if any surcharge is warranted - it would be implemented later in the month." This, he added, will help to recompense the lines for huge losses made over recent times by port congestion delays to their ships. But this doesn't meet with approval amongst shippers, according to Lossau. "Bear in mind that Durban has been an inefficient port for a number of years," she said, "and the shipping lines have already costed for some delay at Durban into their standard freight rates. So the full cost of the current delays should not be recovered anyway! "We cannot help thinking that the shipping lines have seen an opportunity to try and generate additional revenue at the expense of the importers and exporters of SA. A big bugbear for shippers, Lossau added, is the rather continuing nature of surcharges. "Past experience," she told FTW, "has proven to the cargo owners that, once a surcharge has been implemented, it is very difficult to get the shipping lines to cancel it." The current bunker surcharges still being applied on various trade routes is a very good example, Lossau added. "Fuel prices world-wide are at their lowest levels in years - at about US$21 per barrel. Yet there are still positive surcharges being applied for bunkers. "If the shipping lines do go ahead with the implementation of a congestion surcharge, we would expect them to be totally transparent with their costings - which dictate the level of the surcharge. Also, to advise us, in advance, when the circumstances would be right for the surcharge to be withdrawn."