Transnet in desperate need of a turnaround

The Rugby World Cup has kicked off and there’s an air of optimism among South African supporters that the Boks will be crowned world champions for the fourth time. It’s a pity that Transnet isn’t creating the same kind of excitement and hope for our nation. Transnet’s performance has been diabolical and is hindering the economic growth that we so desperately need. Hopefully the newly appointed Transnet board can implement decisive strategies to turn around Transnet and, with the support of the private sector, transform Transnet into an efficient organisation that contributes positively to our economy. Opportunities for public-private partnerships are endless and anything is possible if there is a will to win.

We will continue to work 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:

• Increase in blank sailings
• Sailing delays
• Routing changes
• Port bottlenecks and berthing delays
• Stable freight rates
• Advanced Payment Notification (APN)

Port productivity across our ports has been dismal and negatively impacted all stakeholders. A lack of maintenance by Transnet on critical equipment has resulted in numerous breakdowns of equipment required to perform key functions within the port and ensure cargo moves timeously. Uplifting cargo from the ports has been a major challenge for transporters and deliveries have subsequently been delayed. This has also delayed the movement of cargo to depots for inspection and led to longer turnaround times for releases. Severe weather conditions along our coast and in the Far East have also impacted ports’ ability to operate locally and abroad, forcing shipping lines to adjust their sailing schedules at short notice.

Capacity:

There has been an increase in demand, most notably in the Far East trade, but this was expected. Some carriers did over-book and, combined with adjustments to sailing schedules at short notice, resulted in shipments being rolled over to later sailings or transshipped. Capacity will be reduced after the Chinese Golden Week as shipping lines implement blank sailings on this trade route. Bookings for time-sensitive orders required to ship post-Golden Week should be made before the Golden Week to avoid the risk of extended delays.

There is adequate capacity on the rest of the trade routes, but we can expect capacity availability to be impacted or sailings to be delayed because of the delays to vessels returning to these trades from South Africa.

With our expanded global network, we have access to additional capacity and alternative routings which strengthens our service offering to our clients.

Sailing schedules:

Sailing schedules into and out of South Africa have been impacted the past few weeks and berthing delays, continue to be problematic. Shipping lines have been forced to re-route cargo or bypass certain ports. Departure delays from the Far East have also been common and this is mainly due to weather conditions impacting port operations. MSC has also retracted its direct service to Coega from the Far East effective from September. Cargo booked to Coega and Cape Town will be transshipped in Durban until further notice.

Global schedule reliability remained at 64.2% according to the latest Sea-Intelligence report. The average delays for late vessel arrivals increased slightly to 4.59 days.

See graphs below.

Freight rates:

Freight rates have remained relatively stable across the trades. Some shipping lines did increase their rates on the Far East trade for the first half of September, but this was expected given the increase in demand leading up to the Chinese Golden Week.

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 stable with no major backlogs reported. Competition among carriers remains healthy. 

Transit times:

Shipments have been moving timeously with no major backlogs. The rebound in passenger travel has resulted in a general increase in flight frequencies and belly capacity.

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 remain competitive and we have been able to pass on rate reductions on a few trade routes. The increasing fuel price could push rates up again in the coming weeks, assuming demand picks up.

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.