South African businesses are expecting a huge bill, with an estimated at R1.4-billion for storage and demurrage costs that have been accumulated during the 27 days of Level 5 lockdown, as more than 20 000 containers piled up in storage facilities across the country.
This week, the South African Association of Freight Forwarders (SAAFF) CEO David Logan expressed ‘serious concern’ at the high level of charges being invoiced by shipping lines for storage and demurrage on cargo which could not be delivered 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 break-bulk freight moving in and out of South Africa’s seaports, airports and land borders,” he says.
“Until recently, containers could not legally be delivered to closed importers until the appropriate lockdown level was reached. As a result, cargo was delivered and unpacked into warehouses. In many cases the position remains the same with Level 3 only making its presence felt this week”.
“The level of charges levied by ocean carriers have 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 points out.
“COVID-19 has changed all that. The extended time spent in Levels 5 and 4 has meant that large numbers of containers could not be delivered with the situation only recently easing up when Level 4 allowed a limited amount of movement. The move to Level 3 will mean that a further large quantity of containers will be released for delivery, so we can expect increasing pressure in terms of exorbitant detention costs. Even at this stage, the amounts involved are very high and we are aware of invoices running into many millions of Rand already”.
Logan warns that this will not improve for some time.
Shipping line charges for delayed containers are derived from two main areas: storage (or overstay) and demurrage (or detention). The first usually involves a mark-up often running into several hundred percent of the warehouse’s charge. The second is a direct charge for loss of use of the container. This is always charged in US Dollars at rates which bear no relation whatsoever to the actual cost of owning or leasing a container.
“In reality, these charges were designed to penalise inefficiency rather than to recover costs. There is no logical reason why this approach should be applied in our current circumstances.
We appeal to ocean carriers to exercise restraint and moderation by recovering only their outlays, although we would accept that some reasonable administrative charge could also be imposed,” Logan concludes.
When they walk into a shop, place an online order or receive a delivery at their door, they’re focused on one thing: whether the experience lives up to their expectations.
Is the product available?
Did it arrive when it was supposed to?
Was it the quality they expected?
Most people never stop to consider that those moments often begin months before they become customers. Long before an order is packed or a delivery vehicle leaves the warehouse, someone has already decided who will supply the product, how it will be sourced and how it will make its way through the supply chain.
Those decisions quietly shape almost everything the customer experiences.
The Customer Only Sees the End Result
Businesses spend a great deal of time discussing procurement, inventory, warehousing and logistics.
Customers don’t.
They simply judge what happens at the end.
If a product is out of stock, they don’t wonder whether a supplier experienced production delays. If a delivery arrives late, they’re unlikely to think about transport schedules or inventory planning.
They remember the business they bought from.
That’s what makes procurement so important. The decisions made long before a customer places an order often determine whether that customer leaves satisfied or frustrated.
Every Supplier Changes the Experience
Choosing a supplier isn’t simply a purchasing decision.
It’s a decision about how the business wants to operate.
One supplier may offer a lower price. Another may have a stronger record for delivering on time. A third might be more responsive when plans suddenly change or demand increases without warning.
None of those qualities appears on the shelf beside the product.
Yet every one of them can influence whether customers find what they’re looking for when they need it.
By the time procurement teams sit down to compare suppliers, they’re often thinking about much more than the quotation in front of them. They’re considering how dependable each supplier has been, how easily they communicate and how confidently the business can rely on them when circumstances become less predictable.
The Best Customer Experiences Start Earlier Than Most People Think
One delayed shipment doesn’t necessarily create a problem.
Neither does one supplier running behind schedule.
Supply chains are remarkably good at absorbing small disruptions.
The real challenge comes when those small disruptions begin happening more often. Deliveries start slipping by a day here and there. Inventory takes longer to replenish. Warehouses begin adjusting schedules to accommodate late arrivals.
Eventually, those small changes reach the customer.
From the customer’s perspective, it feels as though the business has become less reliable.
In reality, the first signs may have appeared much earlier inside the supply chain.
Procurement is Really About Trust
The strongest supplier relationships aren’t built on price alone.
They’re built on confidence.
Confidence that products will arrive when they’ve been promised. Confidence that suppliers will communicate when circumstances change. Confidence that both businesses will work together when unexpected challenges appear.
Those qualities don’t always stand out during a tender process.
They usually become obvious months later, when the supply chain comes under pressure.
Customers Remember How You Made Them Feel
Most customers will never know who supplied the product they purchased.
They’ll never see the purchase order, negotiate a contract or visit the warehouse where their order was packed.
What they will remember is whether the experience felt effortless.
That’s why procurement reaches much further than purchasing products.
Every decision made at the beginning of the supply chain has the potential to shape the experience waiting at the very end.
Long before a customer forms an opinion about a business, procurement has already helped write that story.
Not long ago, most deliveries followed a fairly predictable route. Products arrived at a large distribution centre, were stored until needed and then transported to stores or customers across the country.
That model still plays an important role, but changing customer expectations are reshaping the way many businesses think about warehousing.
Today, shoppers expect groceries in under an hour, online orders within a day or two and accurate delivery updates every step of the way. Meeting those expectations isn’t always about driving faster. Increasingly, it’s about storing products closer to where customers already are.
Bigger Isn’t Always Better
For years, businesses focused on building large distribution centres that could supply entire regions from a single location. Centralising inventory reduced operating costs and made stock easier to manage.
As online shopping has grown, however, a different challenge has emerged.
Sending every order from one large facility often means longer delivery distances, increased transport costs and less flexibility during busy periods.
That’s why many retailers are complementing their larger distribution centres with smaller fulfilment facilities positioned closer to urban areas.
Speed Starts Inside the Warehouse
Businesses such as Checkers have shown how customer expectations have changed. Services like Sixty60 have raised the bar for grocery deliveries, making rapid order fulfilment part of everyday retail rather than a premium offering.
Behind those deliveries is a network designed for speed. Products are stored closer to customers, picked quickly and dispatched within minutes of an order being placed.
Retailers such as Takealot and Amazon South Africa are also investing in fulfilment networks that shorten the distance between inventory and customers, helping reduce delivery times while improving service levels.
It’s Not About Replacing Large Warehouses
Smaller fulfilment centres aren’t replacing traditional distribution centres.
Instead, they’re becoming another layer within the supply chain.
Large facilities continue receiving bulk stock, managing inventory and supplying regional networks. Smaller urban facilities focus on processing customer orders quickly, allowing businesses to respond to growing demand for faster deliveries without placing unnecessary pressure on their main warehouses.
Each type of facility has a different role, but together they create a more flexible distribution network.
The Warehouse Is Getting Closer
As delivery expectations continue to evolve, businesses are rethinking where inventory should be stored rather than simply how quickly it can be transported.
For many organisations, that means bringing products closer to customers, reducing the distance between an online order and the front door. It’s a reminder that faster deliveries don’t always begin with the truck. More often, they begin with where the warehouse is located in the first place.
The South African Freight and Logistics Association (SAFLA) and the Road Freight Association (RFA) are jointly calling for an immediate, unified recovery plan to restore predictable cargo flow through Durban Gateway Terminal (DGT) after sustained disruption across vessel, yard, system and landside operations.
The record is stark. In July, vessels at DGT averaged some 80 hours at anchorage and 106 at berth. After the mid-August NAVIS N4 cutover, weekly throughput fell 26% and reported terminal waits reached eight to 12 days. Independent monitoring data shows average Durban port call time rising from under five days in late June to more than twelve by late August, and monthly berth calls down from 34 to 19 since May. On the roadside, the time transporters spend in the port precinct per visit has risen by more than half in three months, while Bayhead Road transit times have climbed steadily since January. The whole gateway is slowing.
The cost runs well beyond storage and demurrage: production lines waiting for inputs, emergency airfreight at a multiple of ocean cost, and trucks standing without bookings. In the 2023 logistics crisis, the GAIN Group put the cost of freight-system dysfunction at around R1 billion a day in lost output. Durban is running the same mechanisms again.
International Container Terminal Services Inc (ICTSI) assumed operational responsibility for DGT on 1 January 2026 under a 25-year partnership with Transnet, inheriting longstanding infrastructure, yard, road and rail constraints alongside pre-handover investment in 20 new straddle carriers and four ship-to-shore cranes. The question is no longer equipment purchased, but equipment available, reliable and synchronised. The NAVIS N4 transition did not create DGT’s constraints; it compounded them.
Accountability must follow the contracts: cargo owners contract with shipping lines, the lines with the terminal, and Transnet granted the concession under defined performance commitments. Transnet and the shipping lines therefore hold the standing to bring the terminal to account — and neither should pass the cost of disruption down a chain that controls none of it.
“Cargo owners and freight forwarders do not experience the port as separate institutions. They experience one chain,” says David Logan, Executive Officer of SAFLA. “If systems, straddles, slots, gates, roads or rail fail to align, cargo stops. The priority is not institutional blame. It is disciplined recovery, with clear owners, deadlines and one trusted set of numbers.”
“Transporters are carrying this crisis on their balance sheets,” continues Gavin Kelly, Chief Executive Officer of the RFA. “Fleets are standing without bookings while fixed costs run, drivers are queuing on Bayhead Road, and every standing hour ends up in the price of goods. Slot releases must match real capacity, and truck staging must be fast-tracked now. Without trucks, South Africa stops.”
The associations propose a DGT Recovery Compact built on five actions:
1. One recovery structure — the terminal, Transnet entities, eThekwini, shipping lines, transporters, labour and industry bodies in one daily structure, with government facilitating rather than managing.
2. A public, 30-day recovery plan — daily targets and one public dashboard: vessel waiting and berth times, crane productivity, equipment availability, system stability, yard utilisation, dwell, truck turnaround, rail evacuation.
3. Stabilisation of systems, equipment and the yard — NAVIS Hypercare retained until cargo-flow thresholds are sustained, backed by a straddle and crane reliability programme and accelerated evacuation of long-dwell containers.
4. A coordinated landside plan — appointment releases aligned with real capacity, published slot schedules, reasons for cancellations, disclosure of any preferential access, and fast-tracked truck staging.
5. Fair commercial treatment — transparent prioritisation of reefers, perishables and critical cargo, and published relief processes for storage, demurrage and detention where delays lay beyond the cargo owner’s control.
The associations acknowledge DGT’s Hypercare support, storage extensions and Radar platform, and the Presidency’s involvement. What is still missing is one consolidated, independently understandable set of performance indicators.
“The Transnet–ICTSI partnership was created to change Durban’s trajectory, and we want it to succeed,” Logan says. “Success will be measured by predictable berthing, productive ship hours, reliable truck access, effective rail evacuation and cargo arriving on time. Durban needs one recovery plan, one set of trusted numbers and shared accountability. Cargo must move — and it must keep moving.”
SAFLA and the RFA stand ready to contribute member evidence and practitioner expertise to a joint recovery task team alongside DGT, Transnet, government and other industry bodies.
You must be logged in to post a comment Login