Shippers challenge rail tariff hike

Call for transparency Siyabonga Gama É 1.5% increase to cover escalating fuel increases. ALAN PEAT ANOTHER CONFLICT has arisen about a fuel price surcharge, with the SA Shippers Council (SASC) challenging SpoornetÕs October 1 rail tariff increase of 1.5% - designed, said the railways, to cover the escalating oil prices. ÒBut,Ó said SASC executive director, Nolene Lossau, Òwhilst the cargo owners sympathise with Spoornet over the increased fuel prices, they have also had to absorb many additional costs due to the same factor. ÒUnfortunately, in the international trading arena it is not often possible for the cargo owners to pass these additional costs on to their buyers.Ó Also, shippers were given insufficient notice of the jump in tariffs. ÒOnly two weeks notice is not enough for those shippers involved in the international freight industry if they hope to negotiate new prices with overseas clients,Ó Lossau added. ÒAnd the Spoornet letter informing our members of the tariff increase was so unclear that a lot of questions still remain unanswered.Ó The search for answers still remains unsolved ÒWe have written to Spoornet CEO, Siyabonga Gama, outlining our membersÕ queries,Ó said Lossau, Òbut so far we have had no response. All most inelegant.Ó An initial question relates to the need for transparency from Spoornet on their mechanism for calculating these Òfuel levyÓ increases, and whether it also calculates a downward adjustment if fuel prices decrease. In the SASC letter to Gama, they ask: When the oil prices reduce from their current levels, will Spoornet once again do away with the fuel increase? What will the ÒtriggersÓ be for this 1.5% to be removed from the tariffs? ÒThe principle of fuel-related fluctuations in tariffs has been accepted by the cargo owners on road cargo and sea freight,Ó Lossau told FTW. ÒThe cargo owners understand the possible requirement for a similar clause in rail contracts. This would, however, be subject to total transparency as to how the formula is calculated and on the understanding that when oil prices go down, the cargo owners enjoy the benefit of any reduction.Ó How the increase is to be billed to shippers is also under query. ÒWill the 1.5% increase be reflected as a separate item on all invoices from Spoornet?Ó The tariff increase also raises problems for SASC members, many of whom have negotiated long-term contracts with Spoornet for up to five or ten years. ÒIn this case,Ó Lossau said, Òwe have asked Gama to please confirm that the future escalations will be based on the previous tariffs and not on the ÒnewÓ tariffs including the 1.5%.