Concerns raised over lines’ container handling charges

Concerns have been raised over container handling charges imposed by shipping lines – with talk of bringing the matter to the Competition Commission. A source told FTW that demurrage charges had been steadily rising while costs around container stops were also on the increase due to the margins being added to handling fees by some shipping lines. This, he said, was exacerbated by the increasing number of stops imposed by SA Revenue Service (Sars), and the sometimes lengthy period between the stopping of a consignment and final examination. “Many forwarders believe there is cause for an investigation by the Competition Commission into demurrage, transport and storage costs levied by the carriers,” he said. “There are many examples of margins being added to transport or storage charges while demurrage is becoming an increasing concern as containers are being detained and industry must just fork out for it.” While several carriers approached by FTW declined to comment, one source who spoke on condition of anonymity said the issue was emotional on all sides and it was easy for an importer to look at it from an isolated perspective. “This is not about shipping lines profiteering even though it may look that way when you see a small per day depot cost versus charge per day,” he said. Said another source: “Essentially, increased stops by customs are putting pressure on the system and that leads to examinations being delayed resulting in more demurrage and storage revenue for carriers.” It is a concern that was also recently brought to the attention of the Cape’s Port Liaison Forum where several examples were presented. According to the PLF chairman, Mike Walwyn, industry is feeling the pinch

due to financial constraints. Additional and unneccessary costs for the movement of goods within the port’s domain were not helping the situation. SA Association of Freight Forwarders (Saaff) maritime consultant, Dave Watts, said while he could not confirm that the organisation was taking the matter up with the Competition Commission, there was concern. “Containers being stopped for whatever reason by customs or the NRA or police is a concern because of the costs involved,” he said. A Cape Town clearing agent, who preferred not to be named, told FTW two containers stopped for a Sars inspection at the port had resulted in a final invoice of R122 000 recently. Another agent said he had also had two containers stopped that came in at an exorbitant cost of over R100 000. In Cape Town recently the increased number of stops led to a major backlog of containers.

Said Walwyn, “If there were say 50 containers in the backlog and one assumes two days’ extra storage plus demurrage at a conservative R5 000 per container then that is a possible cost of R250 000 for the importers involved.” Peter Besnard, CEO of the South African Association of Ship Operators and Agents (Saasoa), said the organisation played no role whatsoever in the contractual relationship between its members and their customers.  “Each one of our shipping line members have their own contractual relationships with their customers which determines the charges that they levy and they do not, for obvious reasons, discuss them with either this organisation or each other.  For that reason we cannot comment on the allegations in your article but would be very surprised were it to be found that charges of any one of our members could not be contractually justified.” Both Walwyn and Watts, however, believe the problem is possibly far greater than what is realised at present and the increasing cost of demurrage needs to be addressed. “This is the shipping line’s charge for you keeping their container longer than the allowed period,” he said. “While there is sympathy with the fact they are under real financial stress, these charges are questionable,” they said.