Transnet keeps dropping the ball

There is no doubt that the Springboks winning the 2023 World Cup was the standout highlight and it gave us something to cheer about. The recent strengthening of the Rand and lower fuel price has also brought some relief to importers. Unfortunately, these positive events which should bring about more optimism are overshadowed by the dire situation of Transnet. The current port and rail situation continues to cost our economy dearly and it's going to take time for the situation to be turned around. One thing we can draw on for inspiration is the Bokke and what is possible when we unite and work together to achieve greater heights across multiple facets. For now, we live on hope and continue to be resilient as always.

We will continue to work very closely with all our partners and service providers, to ensure that all your shipments are delivered as efficiently as possible.

The impact of the following key factors needs to be continually assessed and considered:

• Festive season closures and reduced trucking capacity
• Capacity constraints
• Port congestion surcharges
• Delivery delays

The congestion across our ports continues to be a major issue.  A record number of vessels are either waiting at anchor outside the ports or remain at berths for longer periods and therefore lead times and vessel voyages have been severely disrupted. Delays of more than three weeks have been experienced and there is no definitive time frame for when these bottlenecks will subside. The impacts have been far-reaching and extremely costly to numerous stakeholders. Transnet needs to accelerate their turnaround strategy and drastically improve operational performance. Transparency and partnerships with the private sector are key to transforming Transnet into a reliable entity again.

Capacity:

The market continues to battle with capacity constraints and most notably on the Far East trade. The delays to the return voyages from South Africa have forced shipping lines to implement additional blank sailings across multiple trades and subsequently capacity has been negatively impacted. Shipping lines are also battling to clear up container backlogs at origin and transshipment ports. This has resulted in shipments being rolled over to later sailings and delivery deadlines being missed. Bookings need to be made three to four weeks in advance to secure space.

Sailing schedules:

Global schedule reliability has started to improve again, but the same sentiment does not apply to South Africa. Changes to vessel departures and arrivals are a daily occurrence now and sailing delays and port omissions have become a certainty. We can expect further last-minute changes to schedules in the coming weeks. This also impacts planning deliveries from the port. Importers should factor in an additional three to four weeks into their lead times. Coega can be considered as an alternative port of discharge for cargo shipping from the western trades. One also needs to plan around festive season closures and keep in mind that trucking capacity is reduced.

Global schedule reliability improved to 64.4% according to the latest Sea-Intelligence report. The average delays for late vessel arrivals decreased slightly to 4.58 days.

See graphs below.

Freight rates:

Rate levels have been more favorable for importers up to now, but with the port congestion across South Africa and capacity constraints on the Far East trade, shipping lines have passed on increases. In addition, some shipping lines have implemented port congestion surcharges of between $200 - $500 per container. This is understandable when one considers the additional costs and lost revenue being incurred by the shipping lines because of the delays caused at our ports.

SCFI (Shanghai Container Freight Index):

The below graph demonstrates the freight rate movement per TEU ex-China to South Africa:

Due to our long-standing strategic relationships throughout our global network, we continue to secure competitive pricing relative to market.

The market remains relatively stable with minor disruptions experienced. There has been a moderate increase in demand which was expected considering the state of the sea freight market into South Africa.

Transit times:

Transit time remains consistent with the occasional delay via some of the airline hubs. One could expect longer lead times for very large shipments that may need to be moved over several flights.

We encourage you to provide your required arrival dates in advance for us to offer you optimal routings and rates to meet your requirements.

We encourage you to provide your required arrival dates in advance for us to offer you optimal routings and rates to meet your requirements.

Freight rates:

Rates on European trade have softened most notably out of the UK. We anticipate rates on the Far East trade to increase on the back of the expected increase in demand. There is sufficient capacity to meet global demand and subsequently, market rates will remain competitive.

With our expanded network we are well-positioned to offer a variety of options and flexible solutions to meet our clients' airfreight and import requirements.