The penalty fees shipping lines charge for the late return of containers by land-side freight concerns, mostly because of delayed throughput by Transnet Port Terminals (TPT), ought to be investigated by government departments responsible for trade and transport.
Harbour carriers at the Port of Durban have for some time complained that detention and demurrage (D&D) charges are sucking the lifeblood out of their industry, forcing insufficiently profitable transporters into business closure.
According to Ashleigh Govender, a representative of Positive Freight Solutions (PFS), operators were again hammered hard during the November-December period because of nagging container movement issues at the Port of Durban.
“Sometimes it will take five days or more before you finally fetch a box from Pier 2. By that time, you’re already in demurrage.”
He said transporters had, numerous times, approached the liner trade about D&D, “but they don’t want to listen. Although some shipping lines have said they’re willing to look into the matter, a few have turned around and said we must stay out of their business.”
As has been reiterated numerous times, including on a visit Freight News paid to harbour carriers in December, the liner trade calling at Durban says Transnet-related inefficiencies at the Port of Durban is not their problem.
“And yet it’s their service provider causing delays, not us, but it’s our clients that are billed for the late return of boxes and we, the transporters, simply have to pay.”
In December one of the harbour carriers Freight News spoke to said ocean carriers were mercenary about D&D charges.
“If we don’t pay up, they won’t do business with us; it’s as simple as that.”
Although D&D is a moot point with the liner trade, a former executive from one of the large carriers once said: “We have to charge these fees because of the losses we incur from not getting our containers back in time.
“Without equipment, we’re not in business, so I don’t know what the problem is.”
In 2020 the Federal Maritime Commission (FMC) of the US found out what the problem was – excessive overcharging.
That same year the FMC reported that shipping lines made approximately US$2.2 billion from D&D charges alone.
This amount represented a dramatic increase compared with the total D&D revenue generated over the previous 19 years of the century, which was significantly lower.
The investigation highlighted that in 2020, shipping carriers profited more from these charges than they had in the entire period from 2001 to 2019 combined, illustrating the extent of profit-making during the Covid-19 pandemic due to supply chain disruptions and increased demand for shipping services.
Lines mentioned in this regard included Maersk, MSC, CMA CGM, Cosco, Hapag-Lloyd, ONE, Evergreen, HMM and Yang Ming.
Govender said it was high time that the relevant government departments in South Africa took a leaf out of the FMC’s book, and intervened.
- Transnet was not approached for comment. Towards the end of last year the state-owned company said its not willing to comment about the D&D matter at the Port of Durban.
