From tariff shocks to citrus surges

Contrary to earlier assumptions of a tariff freeze, recent developments indicate that US tariffs on Chinese goods have been increased to 55%, while China's tariffs on US goods remain at 10%. This increase, rather than a freeze, has led to complex supply chain adjustments, with a notable impact on the Asia to South Africa trade route.

Geopolitical instability in the Middle East, especially the intensifying tensions between Israel and Iran, has increased risks in the Strait of Hormuz. This situation may have significant implications for oil prices and operations at regional ports.

Maersk has announced a Peak Season Surcharge (PSS) that will take effect on July 1, 2025, for shipments originating from the Far East to Southern Africa. This will result in rates of USD 500 for 20ft containers and USD 1,000 for 40ft and 40HC containers. Other shipping lines are anticipated to announce comparable increases during July.

The ongoing instability in vessel bookings and limited space availability along the Asia to South Africa trade route will influence schedule reliability, complicating matters for importers. Importers are strongly encouraged to act now by prioritising their shipping strategies. It is crucial to move cargo earlier than usual in anticipation of peak sales. 

Transnet secures wage agreement and government support

Our state-owned ports and rail operator, Transnet, has made significant progress in stabilising its operations:

• Wage agreement: On June 12, 2025, Transnet reached a three-year wage agreement with workers’ unions, providing a 6% annual raise for the 2025/26, 2026/27, and 2027/28 financial years, averting a potential strike. This ensures labour stability, crucial for operational continuity.
• Government support: Transport Minister Barbara Creecy announced a R51 billion guarantee facility for Transnet, with further support expected by July 25, 2025. Additionally, a R26.5 billion Development Policy Loan from the World Bank, announced on June 2, 2025, aims to accelerate structural reforms.
• Operational improvements: Transnet Port Terminals (TPT) reported a 21% year-on-year increase in citrus export volumes handled in April 2025, with the Citrus Growers Association forecasting a 3.6% increase for the 2025 season. The citrus export season is now approaching its peak weeks in June, as noted on May 27, 2025.

However, the South African import market still faces challenges:

• Weather disruptions: As of June 17, 2025, South Africa has been experiencing very cold conditions with daytime temperatures below 10°C in parts of the Western Cape. Damaging wind and wave warnings are in effect, causing vessel bypasses and schedule rerouting. These conditions are expected to continue through June, impacting port operations.
• Port capacity: The Port of Cape Town is making strides with nine new rubber tyre gantry cranes (RTGs) nearly ready for commissioning, expected by May 2026, and plans to increase landside capacity to 1.4 million TEUs, as outlined on March 23, 2025.

SARS enforces compliance requirements

SARS has reinforced its requirements for VAT-registered entities, effective from April 1, 2025:

• VAT number validation: All customs declarations are required to include the VAT registration number. Any discrepancies, such as improperly linked importer codes and VAT numbers, will lead to rejection. This requirement is part of SARS's strategy to improve compliance by utilising data and advanced analytics, as outlined on May 21, 2025.
• Comprehensive invoice data: Declarations must include full commercial invoice details, such as supplier and importer contacts, invoice numbers, dates, incoterms, payment terms, currencies, and detailed English descriptions of goods. Failure to comply, such as not including a VAT number, will result in a rejected goods entry and SARS clearance.

Importers must ensure their VAT numbers are correctly linked via the Registration, Licensing, and Accreditation process or by visiting a SARS office to avoid delays.

Shanghai-Durban freight rates 

Our recommendations

Given the current landscape, importers should adopt the following strategies:

• Booking and forecasting: Secure space well in advance due to capacity constraints and PSS impacts. Proactively manage bookings, especially for high-volume shipments, to mitigate delays.
• Compliance measures: Verify VAT number linkages and include comprehensive invoice data in customs declarations to ensure smooth SARS clearance.
• Weather monitoring: Stay updated on weather conditions, particularly strong winds and cold temperatures, and plan for potential port delays.

Investec is pleased to collaborate with the Southern African Association of Freight Forwarders (SAAFF) in sponsoring the Daily Supply Chain Movement Report. This report offers a thorough update on port operations, equipment availability and weather-related delays.

Our expert analysis of global logistics enabled successful supply chain solutions for importers

We understand that these developments may present challenges, and we are here to support you in navigating them. Our team is committed to providing you with the best possible solutions available and will keep you updated on any further changes in the logistics landscape. If you have any questions, please don’t hesitate to reach out to the team.