Crisis Continues in South Africa with Violence Impacting Durban
Violence and looting are continuing in parts of South Africa as the government struggles to regain control and bring an end to the unrest, which is endangering millions of people and disrupting commerce in parts of the country. The latest reports indicate as many as 25,000 troops will be mobilized, but in the meantime, major carriers and the logistics companies in South Africa continue to warn of the dangers and interruption of normal services.
The civil unrest began last week after the country’s former president turned himself in to authorities to begin a jail sentence. Initial reports of scattered demonstrations escalated and spread into additional regions of the country with numerous reports of people being killed and looting of warehouses, stores, and shopping centers. The latest reports show fires being indiscriminately started in parts of the country, including in Durban and the surrounding communities.
Unfortunately Durban is still on fire pic.twitter.com/A5oL7t2F2W— Ahmed Mahomedy (@AhmedMahomedy) July 15, 2021
Port and terminal operator Transnet declared a force majeure at the beginning of the week and since then other operations have followed suit including parts of the railway system and other port terminals. Transnet in a statement reported that service levels at Durban and Richards Bay were impacted "as the entire supply chain is closed."
Earlier today, July 15 Maersk reported to customers that operations were being disrupted and that it had closed some of its terminals. In their update they said while there was limited activity at Johannesburg, Durban, which is the country’s largest commercial zone and port, remains shut down with only limited port activity. Maersk reported, however, that Port Elizabeth and Cape Town ports, depots, and trucking remain fully operational while separate reports said that at least limited operations had resumed at Richards Bay.
In a similar update to customers, Hapag-Lloyd wrote, “The unrest in South Africa continues to affect all of us as well as businesses across the country. Our operations are impacted and some of our depots and terminals are either closed or operating with the minimum staff requirements.”
Carries including both Maersk and Hapag are also advising customers that they are currently waving detention and demurrage charges tentatively until July 19 or sooner if port operations can resume, but they also warned that port charges or other fees might be incurred from Transnet directly.
Shipping agency GAC is advising that immigrations, customs, and port health authorities at the Port of Durban have not returned to work. However, they reported that three tugs, four pilots, and two berthing gangs were working to supply limited assistance for ships. Launches are ferrying medical personnel to ships in the anchorage to administer COVID-19 testing, but are in short supply preventing ships to proceed to the berths if one is available. GAC said it is possible to arrange for a doctor to be flown to the ships by helicopter at the expense of the port agent.
“The current disruption in South Africa reinforces the fragility of interconnected global trade,” commented Suki Basi, Managing Director of Russell Group. The company, which works with shippers, insurers, and reinsures estimates that “South Africa’s key ports of Durban and Richard Bays Terminal have a combined $19 billion loss exposure from the current violence.” Durban has an annual flow of trade of $13 billion, according to Russell’s risk modeling software with the port being a key terminal for commodities including crude oil. Richard Bays Terminal is a vital coal exporting terminal with an annual flow of trade of $6 billion reports Russel noting that the port handles coal and commodities including iron ores.
Companies have been taking efforts where possible to guard assets and maintain some elements of vital supply to the country. Reports indicate that the infrastructure at the major harbors is being guarded with the help of the military. In addition, Transnet said it was taking actions to maintain the flow of commercial fuel, including images of tankers being convoyed out of the port, after the Sapref oil refinery operated by Shell and BP also issued a force majeure notice at the beginning of the week.
South Africa President Cyril Ramaphosa continues to appeal for calm while also warning that the humanitarian crisis is depending as vital supplies are not reaching parts of the country.