The backlog and congestion at Durban harbour is causing havoc for Transnet, as the company says it has lost at least R160 million since September 2023.
This is no small loss for an already ailing company this is already in a precarious financial situation.
At a media briefing yesterday, the state utility said that Durban manages 60% of SA’s container volumes and traffic.
This will, therefore, have a huge knock-on effect on how companies can get their goods to consumers and will in turn impact the economy.
It should be noted that Transnet generated a profit of around R68,9 billion for the 2022/23 financial year and the crisis at Durban will no doubt play a huge role in the entity staying profitable.
In a statement in September the company said, “the group revenue for the year increased by 0,6% to R68,9 billion in line with positive port and pipeline operational performance”.
IT WILL TAKE MORE THAN A YEAR TO FIX THE MESS
It will take until mid 2025 to get the ports operating optimally, according to Transnet board chairperson Andile Sanqgu.
He noted that it would take at least until mid 2025 to get Transnet Port Terminals (TPT) operating optimally.
Transnet is busy implementing the recovery plan which was approved by the board on October 14.
Sangqu said the problem of port congestion was a complex one and was something that was bound to happen at some point, as a result of many years of underinvestment in equipment and lack of maintenance.
Sanqgu said they were working on a number of measures to turn the situation around, however, the success of those measures was predicated on securing necessary funding to plug the R50 billion infrastructure backlog.
“We need to caution that this is going to take time and nothing is going to happen overnight. Much of our infrastructure equipment has deteriorated. It is past its economic useful life, and this is a result of many years of underinvestment and under-maintenance,” Sangqu said.
“This, of course, has resulted in the backlog in our infrastructure, both in terms of rail infrastructure as well as port infrastructure. As we have previously reported, we are sitting with a backlog of about R50 billion. Therefore, we are busy working on funding arrangements that will assist us to procure the necessary equipment, both for the ports and our rail infrastructure.”
CAPE TOWN PORT
The crisis at Durban is not isolated, and the issues at Transnet have also led to delays at Cape Town Port.
According to Business Live, the mother city is experiencing delays of up to 14 days in order to offload cargo from the ships that can be docked.
As a result of the delay, shipping conglomerate Maersk has decided to remove Cape Town as a port of call and will be using Mauritius.
The company said that they will now tranship all CT cargo in Port Louis and then send the cargo in smaller shipments to the Cape.
It should be noted that outgoing cargo from the CT will also go through this process.
Maersk said that commencing in the first week of December, Far East-West Africa (FEW2, FEW3, and FEW6) will have updated rotations.
In a statement, the company said that in addition to these, Cape Town Express, a new feeder service, will be introduced and connected to the updated SAFARI service.
“South Africa, which is facing congestion, will get connected to a dedicated feeder service via Port Louis and be delinked from the FEW service in order to improve reliability and transit time.”