Chaos at ports will end up costing businesses, warns economist
Chief Economist at Econometrix Azar Jammine says South African businesses that rely on shipping for supplies will have to incur additional costs due to delays at Durban Harbour.
Jammine was reacting to the backlogs at the country's Durban and Richards Bay ports.
He says that businesses will end up paying more for inputs due to the delays at the ports.
"When people want to buy things that are imported or where production lines require imported inputs and spare parts and they can't get them in time, and as a consequence there is a delay in production or supply"
There is a backlog of over 70,000 containers in vessels that are waiting to be processed at the Durban port.
According to the Transnet Port Terminals (TPT), which manages the Durban container terminals, clearing the backlog will take more than four months.
The entity says it is implementing several urgent interventions to address the backlogs at the ports of Durban and Richards Bay.
"We need to caution that this is going to take some time as the lead times for some of the equipment is anything from 12 to 18 months," said Transnet Board Chairperson Andile Sangqu.
"The team is working around the clock to procure this important equipment to ensure our port facilities are in line with global best practices. Transnet has prioritised the optimisation of port operations through improved planning and forecasting, leading to better anticipation of cargo volumes."
Transnet said the delays are due to various factors, including adverse weather conditions and equipment availability.
Jammine warns businesses will feel the pinch.
"There are additional costs that are incurred in trying to circumvent the disruption to the suppliers, and that is very detrimental to our current trade balance. It puts additional pressure on the rand, and if the rand is weaker as a consequence, then inflation tends to be higher and there are additional costs to bare in that way as well."
uMhlathuze Mayor Xolani Ngwezi is to meet with Transnet on Tuesday afternoon over the congestion of trucks going into the Port of Richards Bay on the city's roads.
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