Metair calls for urgent intervention at Durban Port & The Business of Classical Music

SPEAKER_1 (0:01)

The Money Show with Stephen Grootes.

Stephen Grootes (0:04)

The most amazing SENS update from Metair today. The problems at the Durban Gateway Terminal, the Durban Harbour, have now costed around one quarter of their EBITDA, or their earnings from last year. They also say because they can't get automotive components into the country for their customers, they might have to invoke force majeure clauses in various contracts. The CEO at Metair is Paul O'Flaherty.

Paul, good evening. You wouldn't have put out an update like this unless you were incredibly worried. What's been happening?

Paul O'Flaherty (0:32)

Yeah, very concerned. Since about July, this problem started to rear its head and has just kind of got out of control.

If you go to Durban today, you can see the ships. There's like a highway going all the way up the coast. You can't get your ships in. You can't get the turnaround times that you're used to.

Our commitment to the customer is always to keep the air factories running. Therefore, we have to incur significant air freight. When you incur significant air freight, you also have the problem that you have to work a lot of overtime in the factories because you don't have a pipeline of inventory. So this is just snowballing and we've called it out. We're trying whatever we can, we're engaging with whoever we can to mitigate. And we've kind of indicated if it just carries on like this, those are the kind of numbers you're talking about and there seems to be no end. So what about next year? So it's not sustainable for Metair, and this is not sustainable.

Stephen Grootes (1:38)

I mean, about a month ago, six weeks ago, we spoke to the transport minister. We mentioned this to her. She was aware of it then.

I presume you've been talking to the people who run the terminal. What do they tell you?

Paul O'Flaherty (1:51)

Well, we kind of deal with, when it comes to the terminal itself, we deal with the terminal people to find out where are our ships. Our ships are stuck in the ocean. Obviously, we use our customers who have very good contacts to try and move ships in and sacrifice others. We deal through our industry body to lay our complaints.

But at the end of the day, the customer needs to produce their vehicles. So that no one comes out transparently is we have a crisis, this is our plan. This is how we can help each other to get it done. That's what we need. Open transparency.

Stephen Grootes (2:27)

Would you like to hear from the transport minister himself on this? I mean, does it need to go to that level?

Paul O'Flaherty (2:32)

We need to hear from the operator, okay? Because the operator is accountable and whoever the operator reports to, they report to and say, we have this problem.

This is how we're going to fix it. This is how we need your help so that I can see an end. You know, if you can see an end to it, you can manage to an end. If it just goes on and on and on, there's no end.

That's our problem.

Stephen Grootes (2:55)

Is there anything that you could see that could make this easier, that could mitigate some of the problems? I mean, we've been told in the past that more space would be made available for loading and unloading, getting things going more quickly. Are there obvious fixes that you can see have been affected by this very seriously?

Paul O'Flaherty (3:11)

Yeah, you know, I mean, I'm not a port operator, but I mean, you know, and we hear what we hear, and we hear about a system they implemented that didn't work, but now it's fixed. We hear about machines that they took over that didn't work. We hear about they were meant to get certain machine or cranes, etc. that weren't there. So, you know, all sorts of stuff we hear about. But if you do a proper handover, like any company, right, you handover from one company to another, then you've got to have a handover plan. The handover plan, you agree together what needs to be handed, how you do it in a smooth manner. I mean, it can't just be working one day and then it doesn't work the next day. That's not sustainable.

Stephen Grootes (3:52)

I presume other companies like yours, I don't know if you have sort of friendly conversations with them, they must be in the same position. There must be frustration all around.

Paul O'Flaherty (4:01)

Well, I think the OEMs have probably got a worse problem, right? But they're not listed companies.