The Ports Regulator has announced that it has approved a 4.4% average port tariff increase for the 2025/2026 financial year.
This follows Transnet National Ports Authority (TNPA) applying for an overall weighted average tariff adjustment of 7.90% in August this year.
The Mercury reported in August that some industry players had raised concern that the tariff increase requested by TNPA was too high.
It was also reported that the TNPA had said the tariff increase requested was in line with inflation and accommodated other costs such as fuel, maintenance, and water.
In a statement, Mukondeleli Johanna Mulaudzi, CEO of the Ports Regulator of South Africa, said the regulator had come to the decision of a 4.4% average port tariff increase after due processes were followed.
“After reviewing the application, stakeholder submissions, presentations in the public consultation process, and the updated inflation, the regulator applied the Tariff Methodology, Tariff Strategy, and the use of Excessive Tariff Increase Margin Credit (ETIMC) to the application and determined that an appropriate overall weighted average tariff increase for the financial year 2025/26 is 4.40%.”
Mulaudzi said that marine services and related tariffs excluding Section 7 that deals with cargo dues will increase by 6.15%.
“All cargo dues categories are to increase by 3.40%.”
Mulaudzi added that a key factor in the tariff assessment is inflation.
“The Medium-Term Budget Policy Statement (MTBPS) expects inflation to stabilise around the midpoint of the Reserve Bank’s 3.00% – 6.00% target.
“While low inflation is favourable in increasing disposable incomes for households, in the adopted rate of return regulatory methodology low inflation increases the real return of capital.
“In an environment where volume growth is also muted, low inflation results in increased tariffs in the transitionary period. As a result, the regulator has opted to use ETIMC to soften the switch from high to low inflation phase.
“Going forward, the low inflation phase allows port users to afford increasing tariffs which will be necessary for the TNPA’s investment programme. As a result, the regulator will use R225 million of the ETIMC to mitigate transition to the low inflation phase and smooth tariffs for the FY 2025/26 for port users.”
Professor Irrshad Kaseeram from the University of Zululand’s Economics Department said that according to respected sources such as Springer and Maritime Commons, South African port tariffs are some 44% lower than the world average.
“A 4.4% increase is wholly inadequate. The same respected sources suggest that the current pricing model fails to provide the necessary incentives for port management to become efficient. South African ports are known to be the most inefficient by world standards. The mentioned experts suggest that improving efficiency, given the pricing constraints, is to promote intra- and inter-port competition.”
Economist Dawie Roodt said that an increase of 4.4% was just below the midpoint inflation target band.
“Nobody really knows what the correct price increase should be. The best way to get the actual price is to privatise the ports and get the private sector to set the tariff increases, and the markets will decide if it's the right price.”