Complaints from the motor manufacturing industry regarding the high price of port cargo charges has prompted Transnet to take another look at their business model and possibly make changes to it.

David Powels, the president of the National Association of Automobile Manufacturers of SA (Naamsa) and managing director of Volkswagen South Africa, said last week that high cargo fees were a problem area for the automotive industry.

According to Powels, local motor manufacturers have to compete with other manufacturers in obtaining replacement export business which involves a cost comparison between the bidders.

Transport and certain port related costs which include cargo duties have put South African manufacturers at a disadvantage as these factors have driven up our prices to a level that makes it difficult to compete.

Powels said that Naamsa had brought this issue to light over a year ago which resulted in President Jacob Zuma issuing a R1 billion fund to exporters “to help reduce the burden of cargo dues”.

“Transnet is doing a lot of benchmarking and gathering information and trying to understand how to change its business model.

“But Transnet also has return on capital objectives and we have to respect that because we can’t expect an institution not to be profitable,” Powels added.