South African companies have an account of R1.5 billion after about 20 000 shipping containers were stored at the ports’ storage facilities during level 5 of the isolation period.
David Logan, CEO of the South African Shipping Freight Forwarders Association (SAAFF), has now voiced his concern over the high cost of storing cargo that could not be delivered during the early stages of the overall nationwide seclusion.
SAAFF represents 294 South African companies in the international freight forwarding and customs brokerage industry. These companies manage about 70% of freight in bulk as it moves to and from South Africa’s ports, airports and over land borders.
Logan explains that until recently, shipping containers could not legally be delivered to importers because of the relevant isolation regulations that applied until 1 June. The cargoes were then delivered to the port in question and simply stored in warehouses. However, the regulations under level 3 of seclusion now allow cargo to be transported from the port to their final destination.
“The move to level 3 will mean that a large number of containers have to be delivered and we can therefore expect increasing pressure in terms of excessive detention costs,” Logan explained.
According to him, some shipping containers still cannot be delivered to the importer at this stage. “We are aware of invoices already amounting to millions of rand,” he explained.
According to Logan, the high tariffs have been a concern for some time, although freight in the past could easily be delivered and therefore not always needed for storage.
The SAAFF now argues that storage costs should not be so high amid the Covid-19 pandemic. “Initially, the costs are intended to penalize inefficiencies in transporting port products and are charged in US dollars. These loads now had to be stored out of business due to extraordinary circumstances, ”the organization says.
The organization calls for storage facilities to accommodate companies at this time by only charging costs related to their own expenses.