Insurance Gaps: When Ports Stop Moving

The sight of 79 vessels anchored outside Durban harbour in late November 2023 looked like a massive maritime traffic jam, akin to the N1 highway suddenly become a parking lot for ocean giants. Over 61,000 containers sat waiting in the Atlantic swells while equipment failures, maintenance backlogs and weather conspired to create one of South Africa’s worst port congestion crises in recent memory. Cape Town’s container terminals followed suit, creating a shipping nightmare that stretched down the Eastern Cape coastline.

More than a year later, the crisis continued. Throughout 2024, South African ports remained trapped in a cycle of delays and inefficiency. Durban’s berthing delays stretched to 18 days by October, while Cape Town averaged 4 day delays. The Red Sea conflict only worsened matters, forcing more vessels to reroute around the Cape, overwhelming already struggling infrastructure.

Gradual improvement to port infrastructure is expected, as R1.4 billion worth of ship to shore cranes arrive in mid 2025, but full recovery will not materialize until 2026 onwards.

When Transit Becomes Stationary

Marine cargo insurance typically covers goods while they are moving. But when 61,000 containers get stuck outside Durban for weeks, the insurance response becomes more complex. Standard marine policies usually exclude losses arising from port congestion, unless it results from an insured event like storm.

Port congestion is not a new risk, but it remains poorly covered. Most South African marine cargo policies are designed to cover goods in motion, not goods in limbo. Once containers are delayed due to mechanical failures, scheduling chaos or systemic port inefficiencies, the cause often falls outside traditional insurance. No fire, no theft, no weather event—just inertia.

Some global marine programs may offer niche extensions for delay in startup or port delay, but these are bespoke, require significant negotiation and premiums and are generally only accessible to most South African businesses via experienced Risk Advisors.

And the implications ripple outward. Business Interruption cover caused by delays will also usually not respond unless your own property suffers insured damage – cover invariably hinges on physical damage triggers, not logistical ones.

How to Think Ahead

The ongoing port crisis demonstrates why supply chain resilience requires more than insurance. It demands operational redundancy and risk management.

Businesses should diversify shipping routes through multiple South African ports and develop alternative logistics corridors through neighbouring countries like Mozambique and Namibia. More strategically, companies could consider negotiating delivery terms that account for South African infrastructure realities. Flexible shipping schedules, multiple supplier arrangements and inventory buffers can reduce the operational impact when our ports, almost inevitably, experience their next crisis.

To sum up, when global supply chains face their next disruption (maritime experts say port congestion will remain a regional challenge for years), resilient companies with diversified logistics networks, a clear risk management strategy and comprehensive insurance cover will maintain customer service levels, while competitors explain away empty shelves and significant balance sheet losses.

Perhaps it is time to talk to an experienced Risk Advisor?

Based on research and Clyde & Co publication: Durban and Cape Town port congestion crisis, ongoing through 2025