https://www.news24.com/fin24/economy/the-storm-aint-over-logistics-legal-head-warnsof-financial-fallout-from-kzn-floods-20220530
Summary
KwaZulu-nata floods left residents, businesses as well as infrastructure in bad
conditions. Logistics, transport and ports in the Durban port are in a broken state,
congestion and delays left businesses scrambling to meet their obligations to their
clients which resulted in overall loses. The delays in cargo collections meant that cost
for storage and value chain increased, as a chance to save business Transnet and
government are working on opening lanes leading to the Durban port terminal, although
capacity has effectively been halved.
Personal point of view
The is still a long way to go before things at the port of Durban go back to normal, the
floods left the area in a devastated state the roads and rails going in and out of the port
terminal have been either damaged or swept away thus resulting on traffic congestion
with half the capacity being shipped in and out the amount of cargo being left in storage
continue to increase thus increasing the cost for storage which will greatly affect the
country’s economy.
Impact on short term insurance
The damaged on the infrastructures and goods would cause a huge financial stimulus
from the government and huge payout from the insurance to make sure that companies
can rebuild, pay for storages and settle things with their clients. The delays in collecting
cargo, logistics businesses have seen increased storage costs, with the knock-on
impact on the economy being difficulty in managing increased costs in the value chain.
A warehouse would charge say R20 to R30 per metric ton a week. If you have 50 000
tons of product stored for a week extra, you are looking at a million rand a week. It's not
a small amount. Those are the sort of volumes on the bulk side. Containers cost far less
to store, but if you're talking about a lot of containers, the numbers pile up very fast.
Possible solutions
Rail line and road that can be restored in the shortest possible time should be the main
priority to Transnet and government in order to ramp up operations as soon as possible
and the port terminal should go back to functioning fully
An increase to numbers of lanes should be implemented and emergency lanes should
be installed to decrease the number of congestions to and from the port terminal,
Government can also put out subsidies asset finance, so that people paying for
transport get temporary or relief on payments by way of a deferment of payments