Rising costs for fuel, electricity, water, maintenance and materials were among the factors Transnet National Ports Authority (TNPA) said it took into account when it determined its tariff increases for the 2025/2026 financial year.
TNPA said it had applied to the Ports Regulator of South Africa for an overall weighted average tariff adjustment of 7.90% for the 2025/2026 financial year.
Transnet said the increase was in line with inflation and accommodated other costs such as fuel, maintenance, and water.
In addition, the tariff adjustments for 2026/27 and 2027/28 are 18.61% and 2.52% respectively.
The Ports Regulator of South Africa said that it had received the application from Transnet and would consider all submissions. An announcement on the Record of Decision (RoD) would be made on November 29.
Speaking on rising costs, TNPA said in the application that the increases in fuel and electricity costs were “influenced by global market dynamics and efforts to secure reliable energy sources amidst fluctuating prices”.
“Electricity increases can be attributed to various factors, including the average electricity tariff hikes approved by the National Energy Regulator of South Africa for Eskom and municipal distributors. The replacement of marine tugboats with newer vessels boasting larger bollard pull capacities has resulted in improved operational efficiencies.
However, this upgrade has also led to higher fuel consumption.”
Transnet added that maintenance expenditures were estimated to increase by 9.1%, with an average increase of 3.0% over the three-year tariff application period. In addition, material costs were expected to rise by 15.1%, primarily due to supply chain disruptions and price volatility.
“Material costs relate to material used in the maintenance of the marine fleet and civil maintenance and are therefore directly influenced by maintenance activity. Water costs also increased significantly by 50.0%, largely due to regional water scarcity and compliance with stringent environmental standards, necessitating sustainable water management practices.”
The South African Association of Freight Forwarders (SAAFF) was among those who submitted comments on the tariff increases to the Ports Regulator.
In its submission, the SAAFF said the association believed that the application’s requested level of increase over the three future financial years was “so high (as) to warrant specific comments on the probable impact”.
It said the regulator had consistently indicated that any approved increase must be within the range of CPI/PPI.
“The application indicates the CPI used for calculation is 4.57% for 2025/26. The average indicated increase over the three years in this application would be more than double that at 10.39%, and at 7.9% across the board for 2025/2026, 79% higher than the current rate of CPI. The submission has not addressed the critical question of the current state of port productivity and efficiency.”
Gavin Kelly, CEO of the Road Freight Association (RFA), said from the perspective of the RFA’s membership “who battle on a daily basis to get containers into and out of our ports (more so the Port of Durban) – these increases are uncalled for and will further hurt our already collapsing port”.
In its submission, South African Association of Ship Operators and Agents said it must be noted that both the ports and South African shipping industries were experiencing difficult times, with lower-than-expected volumes.
“In part, this is due to exogenous factors resulting in low GDP growth.
However, it can also be attributed not only to inefficiencies in the port system, but to capacity constraints in the rail network. While it is intended that the NPA will become a separate entity and a subsidiary of Transnet SOC Ltd, at present the NPA forms part of the same operating entity that is responsible for the rail capacity constraints.
“This means that any substantial increase in the average tariff would entail ports users subsidising the very entity that is responsible for their difficult trading conditions. That is a bitter pill to swallow.”
Malcolm Hartwell, Norton Rose Fulbright director and master mariner, said that the tariff increases reflect an average increase of 7.9%, which is in line with inflation.
“This follows a number of years where the tariff increases that were approved were less than inflation because South African ports had become so expensive.
The tariff increase reflects Transnet’s need to maintain world-class ports and provide efficient services to port users.”
Hartwell said that the broader issue of TNPA’s massive decline over the last few decades was being dealt with at a national level and the tariff increases were needed to ensure it could continue operating.
“South Africa needs its ports to operate and operate efficiently in order to compete with our neighbours and avoid continuing to pass on its massive costs driven by inefficiency to the long-suffering consumer and businesses. This means that they need tariff increases to continue operating while they implement decisions designed to make Transnet more efficient and more profitable.”
Economist Dawie Roodt said that the increases were in line with inflation.
“A little bit on the high side and we have to remember the increase has to be competitive in line with international rates.”
The Mercury