- Multinational shipping companies like MSC and Ocean Network Express (ONE) are avoiding Cape Town due to congestion and delays.
- The port has been hit by Covid-19 outbreaks, on top of existing issues like aging infrastructure.
- According to Transnet, less than half of the port's staff are currently on duty.
- Manufacturers like Distell now say Cape Town exports have become a risk to their business.
- For more stories go to www.BusinessInsider.co.za.
Multinational shipping companies are starting to avoid Cape Town due to long delays caused by Covid-19.
Business Insider is in possession of documents from shipping giants MSC, Ocean Network Express (ONE), and CMA CGM detailing concern over the levels of congestion at the port. These are some of the biggest shipping companies in the world.
Both MSC and ONE have removed Cape Town from their main Europe shipping line, and CMA CGM has begun charging extra to deliver cargo to the port.
Both MSC and ONE will now stop at Cape Town on their smaller, weekly routes. For imports and exports, ONE is choosing to load and offload cargo at Coega and Port Elizabeth, and to move cargo to Cape Town on smaller feeder vessels.
In a letter to customers, ONE said that the shortage of labour due to Covid-19 “has a significant impact on the operational performance of the terminal. As a result of the ongoing lower productivity and stoppages the berthing delays in Cape Town container terminal have reached excessive levels with currently no signs of improvement”.
ONE confirmed the authenticity of the document. MSC and CMA CGM did not respond in time for publication.
This follows a plea by the Western Cape government to Pravin Gordhan, the minister of public enterprises, to step in and solve the congestion at the port.
According to David Maynier, the Western Cape’s minister of finance and economic opportunities, ships have been waiting outside the port for two weeks before being allowed to berth. Export orders are waiting months to get shipped, while transporters are only able to collect a single container per day, he says.
According to Transnet, less than half of the port’s staff are currently on duty.
The delays at Cape Town come at a critical time, as large volumes of fruit exports are being redirected to the Eastern Cape to ensure the fruit gets shipped to Europe on time. “As these are key volume markets for the citrus peak season it is essential that a stable product is provided,” said ONE in its note to clients.
And it’s not just fruit exports. It’s affecting booze as well. In a trading update, liquor producer Distell said that it could only fulfil a little over half of its booze exports since lockdown eased “due to the fact that local ports were operating at a reduced capacity and customer cancellations were experienced due to the delay caused by the restrictions”.
The delays in processing containers are now a short-term risk to its export business, Distell said.
Transnet’s Cape Town port manager, Mpumi Dweba-Kwetana, blamed the delays on a backlog of cargo piling up during the higher phases of lockdown, when only essential goods were allowed to be imported.
She acknowledged that the Covid-19 outbreak has been a “challenge” for the port, along with the resulting “self-isolation, staff absences and employee anxiety”. According to her, additional staff have been brought in, which means 40% of staff are now on duty.
“Transnet will continue to work closely with stakeholders around the impact of constrained port terminal resources on their operations. However, we respect the fact that some shipping customers need to make difficult decisions to keep their operations efficient over this unprecedented period,” she said.
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