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The Road Freight Association says the congestion at the Durban port is expected to result in supply chain disruption costs which will likely be passed on to consumers.
This is as over 70 000 containers remain stuck on ships at the Durban Port Terminal due to Transnet’s failing port infrastructure.
The situation has retailers worried that they will not have stock on shelves in time for the festive season rush.
A build-up in supply chain pressures is expected to result in various penalties due to the delay at the port of Durban.
The Road Freight Association says supply chains in this regard are time-sensitive, with major cost implications.
CEO of the Road Freight Association Gavin Kelly says with delays of up to 20 days, importers and exporters stand to face several penalties.
“Goods that are on that ship that are destined for other markets, even our own, could very well be delayed. There already in May or June goods placed on ships, non-perishable goods that were destined for the end-of-year holiday season so that retailers can get into their warehouses by August, September, and October of the year to put through their distribution warehouses to get into retailers and there probably will be some cargo that should have already grounded to be moved to distribution centres and be ready for sale. So some of that stock could arrive late.”
Transnet has told the nation that it’s working to fix problems at the ports, however, it will take time and be a costly exercise. Kelly says retailers are likely to pass the cost onto consumers by some measure.
“Or the shipping lines start charging penalties on the delay of the box coming back. They needed that empty container back as I explained earlier on, to go somewhere else, and if they don’t get that empty container back they have to go source it somewhere else, maybe even from a competitor and pay more. A whole series of penalties start to enter into the supply chain, and at the end of the day it gets added into the price that the consumer pays, unfortunately, that’s the reality, someone ends up paying.”
Transnet Port Terminals, which manages the Durban Container Terminals, estimated that it will take between seven to fifteen weeks to clear the current backlog.
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Source: SABC News (sabcnews.com)