Trade Winds bimonthly update volume 8

Huge costs, the result of level 5 lockdown has given importers a massive headache as the costs of storage and demurrage of containers sits at a staggering R1.4-billion. CEO of South African Association of Freight Forwarders (SAAF) David Logan is concerned at the amounts being invoiced by shipping lines to importers for storage especially that its for cargo that could not move during the early stages of lockdown.

“Saaff represents 294 South African companies in the international freight forwarding and customs broking arena, managing approximately 70% of the containerised and breakbulk freight moving in and out of South Africa’s sea ports, airports and land borders,” he says.

“The level of charges levied by ocean carriers has been a source of concern for many years, but in normal times there was some justification for this, as it was generally speaking relatively easy to clear and deliver containers within the free time allowed. Under these circumstances it was reasonable for the carriers to expect that their containers should be returned and put back into service without delay,” Logan said.

On the back of this, the delays at Cape Town port is now jeopardising South Africa’s exports, mainly to the United States. The situation which has lasted for two weeks now is due to Transnet being incapable of handling these delays, several freight liners have been caught on film queueing at anchorage waiting to enter the port. Last week it was reported that employees were asked to stay at home because of Cape Town being the epicentre of South Africa’s COVID outbreak, it seems that Transnet is hiding behind the COVID pandemic and not informing Importer, Exporters and transporters of what is going on.   

Bottlenecking at Beitbridge, since the delays from last week, it was decided to convert a container into a manual testing station that sits on the bridge over the Limpopo River however this has resulted in further delays at a bottleneck effect.

Mike Fitzmaurice, chief executive of the Federation of East and Southern African Road Transport Associations (Fesarta) said the following:

“The completion of forms, the fact that it takes around 15 minutes to test each driver – it all adds to delays.”

Last week he questioned why drivers weren’t encouraged to fill in the forms online.

Adding to this, there are other factors contributing to the delays now coming from ZIMRA’s Documented Processing Centres (DPC), all commercial bill of entries are being processed electronically and these are being processed at Harare, Masvingo and Bulawayo DPCs however Bulawayo’s DPC was recently closed as there was a confirmed COVID cases. Once these bills of entries are processed the trucks are then given the go-ahead to the port of entry/exit where authorities there only check for conformity.

Under normal circumstances, 600 haulage trucks use Beitbridge Border Post with 300 going either side but the average has increased to nearly 1 000 daily. The increase comes after other routes in Botswana and Mozambique have been closed off.

Power struggle, Copperbelt Energy Corporation (CEC) has accused the Zambian Government of trying to expropriate its assets. This comes after a feud involving CEC supplying Konkola Copper Mines with power, the government placed KCM under liquidation a year ago, and which has a $144 million unpaid electricity bill to state owned ZESCO. The state last week declared Copperbelt Energy Corp.’s electricity lines as a “common carrier,” which by law other companies are allowed to use them by paying a fee.

The energy regulator set a fee for using the infrastructure that’s about 30% of what CEC normally charges, the company said.

The decision has negatively impacted CEC and they are now on the brink of defaulting on all loans borrowed.

Tackling undervaluation, Zambian mining authorities have speculation that major mining companies within the country are submitting below par samples of the minerals they are mining in order to pay a less mining tax.

“The loss of revenue could amount to hundreds of thousands, or even millions of dollars per export, depending on the discrepancy in mineral grade between the sample and the consignment being exported,” Barnaby Mulenga, permanent secretary at the ministry of mines, said in a statement.

From 1 July mines ministry officials will start collecting samples from the various mines.

“Life is 10% what happens to you and 90% how you react to it.”