April 21, 2020
NON-ESSENTIAL CARGO AND THE LOCKDOWN
The amendment to the lockdown regulations on 02 April 2020 exempted the movement of cargo from ports of entry to their intended destination, on condition that necessary precautions have been taken to sanitise and disinfect such cargo. Prior to the amendment, only cargo considered to fall within the definition of essential goods and services was permitted to be moved.
As a result of the amendment, Transnet issued a letter to its customers advising that:
- they would start moving non-essential goods following the amendments of the regulations;
- lift the restriction of cargo movement out of the port precinct in accordance with the amendment contained in regulation 11B(b)(iii)(bb).
The South African Revenue Services (“SARS”) in addition published directives contained in the Transportation of Cargo Practice Note dated 06 April 2020 and an explanatory note dated 07 April 2020, providing as follows:
- all cargo may be evacuated from ports of entry to their intended destination, provided that such cargo:
- has been sanitised in a manner, at a time, and by such a person as may be prescribed by the relevant Government Department; and
- has been customs cleared and released prior to removal, or is removed by an approved container operator on the basis of a manifest submitted to SARS; and is delivered to an approved or licensed temporary storage facility (e.g. container terminal, container depot, sea or air transit shed, air de-grouping depot, railway station, etc) located at the intended destination of the cargo;
- once goods have been removed from a port of entry to a temporary storage facility, the physical delivery thereof to any consignee is subject to the restrictions imposed by the Regulations in respect of essential services and goods for the duration of the lockdown;
- essential goods may be delivered from temporary storage facilities to consignees who perform essential services, subject to a valid customs clearance and release and, where applicable, any release authorisation by the relevant Government agency;
- until such time as the lockdown period ends, or any further amendment to the Regulations are made that allows for the delivery of non-essential goods to consignees, such goods must be stored in temporary storage facilities (e.g. container depots, sea or air transit sheds, air de-grouping depots, railway stations, etc.);
- this means the entities exercising release controls on behalf of SARS (e.g. container operators/carriers, container depots, sea or air transit sheds, air de-grouping depots, railway stations, etc.) may not allow the delivery of non-essential cargo to any consignee until after the lockdown and any deliveries made will be in contravention of regulations and this may attract penalties as outlined in 11G of the regulations.
The directives make no mention of whether non-essential cargo may be unpacked from the containers they were shipped in and stored at the temporary storage facilities. This “grey area” results in containers belonging to shipping lines having to remain at these temporary storage facilities with the non-essential cargo stored inside them, and incurring daily demurrage. Seeing as the lockdown period has now been extended to 5 weeks, this translates into millions of Rand.
It is to be hoped that given the fluid situation and the potential for storage costs being passed onto consignees, that the regulations be revisited in this regard and an amicable economical solution found, whilst still respecting the purpose of the lockdown.