Port users slam short notice tariff hikes

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BR Port Tariff 21 Independent Newspapers TNPA asked for increases of 14.4 percent after forecasting that R146.8bn would be spent on port developments over seven years.

Johannesburg - Port users feel that the 5.9 percent increase in container cargo dues is a slap in the face after numerous pleas to the Ports Regulator of SA to halt tariff adjustments until local ports were price competitive.

The regulator announced the increases, which included an 8.15 percent upward tariff adjustment for dry bulk cargo like coal and iron ore, as well as for marine services, on Friday, only three days before their implementation.

The reasons for its tariff determination would be published at a later stage.

Transnet National Ports Authority (TNPA) applied for an average 14.39 percent port tariff increase in September last year. The request was made after Transnet’s market demand strategy forecast that R146.8 billion would be spent on port developments in the seven years to 2019.

While the magnitude of the increases drew disapproving comments from exporters and importers, the timing of their announcement fuelled their displeasure.

The new tariffs come into effect today.

“In effect the shipping industry and cargo owners have been given one day’s notice of the increases and this is not really acceptable… How does one plan and how does one deal with the practicalities of these instant increases?” Janine Myburgh, the president of the Cape Chamber of Commerce, asked.

Myburgh said the 5.9 percent increase in cargo dues was the biggest in several years and imposed a massive cost burden on businesses, especially the exporters who used containers.

In recent years, TNPA had applied for increases of up to 18 percent but the regulator had rejected these, granting increases of 4 percent or less.

Fruit South Africa, which opposed any upward adjustment of ports tariffs when it submitted its written comments to the regulator in November last year, said yesterday that cargo dues for full 12m export containers would increase by R82.64 to R1 483.36 excluding VAT as a result of this adjustment.

That cost and Transnet Port Terminals’s charge of R3 239.88 for a 12m full export reefer container would total R4 723.24.

This represented an increase of R357.38 per 12m container excluding VAT, a combined increase of 8.19 percent.

Fruit SA’s port tariff and regulatory committee has commissioned a study to determine the total financial impact of this on fruit exporters.

Business Unity SA, which suggested a nominal tariff increase of 3.8 percent when it made its submission last year, cited the regulator’s global port pricing comparator study of 2012 that revealed container tariffs were significantly more expensive in South Africa than the global average, with a premium of 874 percent.

In light of this study, a new tariff structure that aimed at cutting tariffs for exported containers by up to 40 percent is being investigated by TNPA and thus container shippers expected no increases this year.

Sasol, which is a significant single contributor of revenue for TNPA, had wanted the regulator to approve an increase that would not be more than inflation for 2014/15 and said yesterday that it accepted the regulator’s decision.

But in its written submission in November, Sasol felt that certain cargo dues, such as those levied on its crude oil imports, even before the increase, were not reflective of the service levels offered by TNPA.

The company said it incurred between R7 million and R9m in demurrage costs annually on its bulk liquid supply chains through Durban as a result of port inefficiencies. - Business Report


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