Hi all, one of the questions that was raised to me by one of the readers of the blog was as below.. I thought i would respond to this as a post..
Q : How SA importers decide which port is most suitable/cost effective, especially with regards to containers.
A : In SA, since all ports/terminals are run by Transnet, there is no real difference or competitive edge in term of pricing and service delivery.. The importers would decide on a certain routing (discharge port) based on the cost at that port and the cost of moving it inland (for example Johannesburg) but sometimes they will pay the higher price if they want their cargo earlier..
For example certain lines coming from Europe call Cape Town, Port Elizabeth and Durban in that order.. So if a customer is in Joburg and he wants his cargo to come to Joburg, normally he would wait for the vessel to call at Durban and then rail or roadhaul from there.. However if he needs his cargo earlier, he might be willing to pay the differential in rail/road haul cost and request the cargo to be off-loaded at Cape Town (if it is possible in terms of stowage of course) and then move it to Joburg thereby saving maybe 4-5 days it will take the ship to reach and off load in Durban..
Some customers regularly use Cape Town as a discharge port from Europe so that they save on the time..
On the same token, if the vsl is coming from the Far East and Durban is the first port of call before Port Elizabeth and Cape Town, then the client will choose Durban as the POD..
Q : Do shipping lines have a greater preference to Durban than to ports such as Coega and Cape Town and what is the reason for this preference?
A : Shipping lines in general will have certain preferences to certain ports depending on the cargo that they will be carrying.. For example
- If it is reefer cargo then Cape Town is preferred due to the fact that Cape Town has the highest percentage of reefer cargo in South Africa,
- Carriers who have contracts with the big automotive giants like Daimler Chrysler and Volkswagen will call at East London and Port Elizabeth to cater to their clients requirement,
- Durban is the preferred port for many customers whose cargoes are for final destination Johannesburg and upwards mainly due to the ease of getting the cargo to Joburg from Durban than from other ports..
- They will also check on whichever ports offer the greater contribution margin to their profits and that port would surely be their base port of call within South Africa