Export partners work to untie knotty strings
With a weak rand and low domestic growth, the government should be doing more to make it easier for local companies to export. But despite recent progress in moving some customs processes online, piles of paperwork and delays at borders and ports are still causing headaches for exporters.
The World Bank ranks SA at 139 out of 189 countries for trading across borders, down from 115 in 2013.
The bank notes that exportbound goods spend an average of 100 hours at borders – nine times longer than the average Organisation for Economic Cooperation and Development member country, while exporters spend an average of 68 hours completing documentation, compared with just three hours for developed countries.
The South African Revenue Service (SARS) notes in its 201516 report that the implementation of online customs declarations has reduced the processing of 94% of export transactions from 90 minutes in 2006 to an average of 17 minutes.
Since June, shipping and trucking companies have been required to lodge their manifests online, an innovation contained in the Customs Control Act and Customs Duty Act, both passed in 2014.
Yet in many cases this does not appear to have reduced the amount of paperwork required to export. In November, outgoing Shoprite boss Whitey Basson said the retailer had to complete an average of 634 pages per container shipped to the rest of Africa. In September, Shoprite chief operating officer Pieter Engelbrecht had to appeal to Western Cape MEC for economic opportunities Alan Winde to intervene to clear a backlog of container shipments headed mainly to Angola that were held up in customs.
The provincial government’s red-tape reduction unit was able to get SARS to make additional resources available to clear the containers within days. The unit’s head, Raybin Windvogel, says the problem became so severe that at one stage all three of Shoprite’s export warehouses were full to the brim with R220m worth of goods and could not accept any more from its suppliers.
The backlog arose after SARS reduced the number of hours that its inspectors could spend inspecting consignments of goods, Windvogel says.
SARS spokesman Sandile Memela says that although he cannot comment on any specific case it is “inaccurate” to say that the inspectors’ hours were reduced. SARS allocates resources to cases and declarations based on information provided to the agency about a client’s export and import requirements, Memela says.
Shoprite spokeswoman Sarita van Wyk says shipment delays are an industrywide challenge.
Consumer Goods Council of SA CEO Gwarega Mangozhe says its members are continually frustrated at the “extensive” documentation required by the different Southern African Development Community (Sadc) member countries, which results in significant delays in the transport of goods.
A typical container can hold 300-600 shipment articles and many of them — such as meat, dairy and agricultural products — are regulated and handled by the Department of Agriculture, Forestry and Fisheries.
BETTER CO-ORDINATION
Mangozhe says the council has raised its concerns about border delays with the Sadc secretariat through the Southern African Business Forum.
“It all [calls for] better coordination, less duplication of paperwork among the member states and where possible standardisation, which could address these nontariff barrier challenges,” he says.
Freight forwarding companies say delays at border posts and at the Port of Durban are a challenge.
While there are usually no problems on the South African side, processing documents can take two to three days on the Zimbabwean side, Cargo Services GM at Beitbridge Rob Lamb says.
“We have monthly meetings between the two countries, but if the internet is down [on the Zimbabwean side] how are you meant to communicate?”
Shipping and Forwarding Agents’ Association of Zimbabwe CEO Joseph Musariri blames “policies and systems” at the Zimbabwe Revenue Authority for delays but says his association is in talks with the agency’s new management to improve the situation.
The average ship turnaround time at the port of Durban climbed from 27 hours in 200910 to 58 hours in 2013-14, before falling to 46 hours in 2015-16, according to the Transnet National Ports Authority’s financial results for 2015-16 and a benchmarking report by the Ports Regulator of SA in 2016.
South African Association of Freight Forwarders chairwoman of harbour carriers Sue Moodley blames the breakdown of ageing equipment and unplanned work stoppages. Poor weather adds to the congestion. She says her organisation has had several meetings with the Transnet National Ports Authority to resolve these issues and there have been improvements recently.
Transnet Group spokeswoman Janna Strang says the state-owned company has established a platform with all stakeholders in the industry to address the congestion. A 90minute turnaround for trucks has been set. The expected delivery, in May, of new straddle carriers to stack containers will help to meet this target.
Citrus producers in 2015 began a trial of a three-year project to develop an integrated information platform to collect data from the Perishable Products Export Control Board, the Department of Agriculture, Forestry and Fisheries and the Citrus Growers Association.
Association industry affairs manager Paul Hardman says that before the system was introduced, citrus growers were faced with an “inordinate amount” of delays.
The platform is expected to make savings of up to R236m over five years, mainly in the form of reduced time delays during inspections. It is expected to be extended to the rest of the fruit market by 2017.
Memela says SARS is engaging with several government departments to implement an electronic data interchange to administer import and exports. SARS is helping to develop an automated solution for the Department of Agriculture, Forestry and Fisheries for the registration of the department’s permit holders, the management of permits and inspection case workflows.
He says SARS is also working with customs regimes from neighbouring countries to share export data. SA and Mozambique are establishing a onestop border post at LebomboRessano Garcia.
South African Association of Freight Forwarders consultant for customs and regulation Johan Marais says: “The enforcement or compliance activities of the other government agencies are not co-ordinated, resulting in unacceptable delays and additional costs.”