Change remains a constant in the world of supply chain, and we constantly need to be analysing, adapting, and planning to keep abreast of shifts, remaining pro-active where possible.

Recent times have demonstrated just how volatile things can be from fluctuating geopolitical tensions to shipping delays, but within the volatility also comes resilience and especially in South Africa, we are conditioned to be resilient and persistent to achieve greater heights. 

We somehow manage to find solutions when there don’t appear to be any, and, at the end of day, we all become stronger and wiser. If we look at the Transnet situation as an example, we are constantly living in hope for positive change and we try to remain optimistic.

Fortunately, there have been positive announcements at the embattled rail, port and pipeline operator over the past few weeks, such as the permanent appointments of the Transnet Group CEO and CFO.

Numerous investments into infrastructure upgrades and projects have also been announced as well as the intention to create a separate rail entity by April 2025 with the participation of the private sector. These are all very positive developments for the medium- and long-term outlook and if they come to fruition then we can expect a brighter future.

Back to the Logistics Update...

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

  • Schedule reliability
  • Freight rate reductions
  • Annual landside and transport increase
  • Transnet port constraints
  • Stable airfreight market

 

Sea freight update

There has been progress in clearing up of the Far East backlogs post the Chinese New Year and we anticipate the situation to continue improving in the coming weeks.

The industry is still battling with vessel berthing delays across our South African ports and challenges with port equipment remain a daily problem. Delays with vessel berthings and container upliftment from port will remain a problem for longer than Transnet’s initial forecast of clearing up the backlogs by end February.  

Capacity:

On a global basis, new container vessel capacity continues to be deployed to the market, however South Africa is not benefitting from this because of our stagnant economic growth and the issues being experienced across our ports.

We do expect available capacity to South Africa across the various trades to fluctuate because of the delays to vessels returning to their base ports from South Africa.

Capacity from the Middle East, including India and South America remains constrained. Capacity constraints ex-Far East have eased slightly as most carriers have reverted to weekly sailings for March.

We have experienced a more favourable capacity balance ex-Europe and the USA. Capacity has been impacted at times by vessel delays and not necessarily demand exceeding capacity supply.

51.6%
Global schedule reliability decline
10 days
Anchorage delays outside Durban's Pier 2

Sailing schedules:

Carriers blanked c.50% of sailings in February ex-Far East, but as of March most carriers had re-instated weekly sailings. Delays to voyages and extended lead times remain problematic and currently all trades have been subjected to this.

Carriers are constantly trying to balance their port calls and transit times, and when required have had to omit certain ports or amend their scheduled port rotations. This has also resulted in instances where cargo booked on a direct sailing has been changed by the carrier to a trans-shipment routing. 

Carriers calling Durban port, especially Pier 2, are still experiencing extended anchorage and berthing delays with the situation changing daily. Anchorage delays can still be more than 10 days for Pier 2 with Pier 1 delays fluctuating between three to eight days.

Delays at Cape Town port have improved over the past few days with delays of between one to five days. Delays at Coega have also not been consistent and have ranged between 7 to 10 days.

Global schedule reliability performance dropped significantly from the end of 2023 into 2024. This was mainly driven by the impacts of vessels being diverted away from the Red Sea. Schedule reliability declined to 51.6% according to the latest Sea-Intelligence report - see the graph below.

Freight rates:

Rate levels on the Far East trade have softened slightly from February, but not by the quantum one would expect after the Chinese New Year. The reason for the reductions being minimal was because carriers had large roll-over pools from the Chinese New Year and a high number of blank sailings were implemented in February which reduced capacity availability.

We are anticipating rate reductions leading into April.  Rates ex-India remain elevated, and the rest of the trades are more stable and constant. Carriers are maintaining their South African port congestion surcharges until further notice. 

Carrier landside, port and transport charges will be increasing from 1 April 2024. Further details on the increases will be communicated in due course once finalised. The market anticipates increases of between 8% to 9%. 

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Air freight update

Air cargo volumes globally increased by 10% year-on-year compared to February 2023. The increase was mainly driven by demand pre-Chinese New Year and the Red Sea disruptions.

Demand has subsequently retracted since. The market remains relatively stable with a few disruptions reported, for instance workers' strikes in Europe which caused flights to be grounded and operations suspended. 

Transit times:

No significant delays have been reported recently and shipments have generally moved according to schedule. 

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:

Rate levels have either softened or remained stable over the past few weeks. We have seen rate levels ex-China reduce post the Chinese New Year as demand for capacity has come down.

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As your logistics partner, we remain fully committed to offering you import solutions that support your business needs. We have a strong international network for both air and sea modes which we leverage to ensure that we continue to offer you the best viable solutions for your business. We are aware that current market conditions are volatile and challenging, and we remain dedicated to serving and working with you during these times.

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