A large backlog of containers! The country’s seven major ports declared force majeure!
Staff at South African port operator Transnet have gone on strike over wages since last Friday, with Transnet saying force majeure exists at all South African ports. Transnet owns and operates 16 terminals and seven ports in South Africa. The seven major ports in South Africa declared a force majeure strike this time, South African exporters are facing supply chain disruptions, and the strike has led to a large backlog of products.
Strikes lead to massive container backlog
South African operator Transnet Port Terminals said in an update on its website that the strike has affected waterside and landside operations at the Port of Durban, which handles 65% of South Africa’s container traffic. The Transnet strike has resulted in many cargoes waiting at the terminals, with cargo staying on ships in the port, hindering the supply of goods ahead of the festival. Peter Besnard, chief executive officer of the South African Association of Ship Operators and Agents, said there was currently a large backlog of containers at ports that had not been dealt with due to the strike. The Durban Container Terminal has suspended operations and the new terminal at eThekwini is not operating either. It is reported that the South African National Transport Union started an indefinite strike on October 6, while members of the South African Transport and Allied Workers Union went on strike on October 10. “The strike could have a devastating impact on South Africa’s economy,” the South African Business Union said. The strike comes with South Africa’s energy crisis, which has caused power outages of up to nine hours a day. Data shows that logistical delays cost the country between 100 million and 1 billion rands ($548 million) a day in economic losses.
Shipping companies have stopped bookings
Shipping companies have notified customers and are looking for alternative solutions. Hapag-Lloyd said several terminals were still unable to operate, in addition to the Transnet Port Terminals having officially declared force majeure. The strike is expected to have an impact on local operations. According to this, Hapag-Lloyd offers an additional 7 free days for all types of containers. Maersk also recently announced a service adjustment plan and suspended all bookings for dry containers at South African ports. It also warned that imports may face lengthy delays and would waive export fees that require a change of destination.
The impact of the port strike continues
The strikes could also disrupt fruit exports from the transport network’s Cape Town port at the start of the fruit season. Shippers are now looking for alternative ways. This would trigger higher rates due to limited air capacity. The normal charter fee of $500,000 has risen to $1 million during Covid-19, and fruit merchants cannot afford it. In the face of the current price increase, there will be a period of disruption.
Back in 2010, Transnet faced a 17-day strike that took about seven months to recover. Meanwhile, Transnet’s strike will also exacerbate the mining industry’s logistical woes. Even before the strike, the South African Mines Council had forecast that South Africa would lose 50 billion rands ($2.76 billion) in revenue this year, compared with 35 billion rands in 2021. Miners Thungela Resources, Kumba Iron Ore, and Jupiter Mines warned the strike could affect the production and exports of coal, iron ore, and manganese. According to Mysteel, the chrome ore in the port can still be shipped, but the shipment of chrome ore to the port has been suspended, and the shipment of most chrome ore ships will be delayed, and it is impossible to predict when the port shipment will resume.
Finally, if there is a plan to ship to South Africa in the near future, you must pay close attention to the delay and impact of the strike on the transportation of products, so as to avoid unnecessary losses!
