General Overview
SA’s trade surplus – The month began with positive trade data. SARS’ September “Merchandise Trade Statistics” showed a preliminary monthly trade surplus of R12,8 billion, with exports increasing by 3.5% and imports decreasing by 1.3%.
Good credit rating – Based on this Fitch Ratings signaled that it may upgrade South Africa’s credit outlook if the government sticks to its path to stabilise debt as outlined in its three-year budget plan.
Expect higher costs – The second week of the month saw container prices rising, and at the same time the Rand lost 3%.
Efficient logistics saves money – Toy company, Hasbro attributed its rise in earnings to an overhaul of the company’s operations supply chain. This highlights the importance for businesses to work with an efficient, effective and agile logistics partner.
Positive outlook – The rating agency, Standard and Poor (S&P), gave South Africa’s credit rating a positive outlook, which caused the rand to surge mid-month.
Global Shipping
Strong global demand – Maersk estimates the demand for containers is still very strong globally, with the only regions showing weak demand being West and Central Asia and African imports.
Net deliveries on the market supply side increased by about 1 million TEU in Q2 of 2024. While the surge in new deliveries has aided in network reorganisation in the wake of the Red Sea crisis.
Reliability drops – Global schedule reliability continued to decline, falling by 1.2% (m/m) to 51.4% in September, according to Sea Intelligence.
Cost of Red Sea crisis – Egypt says that the Houthi attacks and the Red Sea crisis have cost its economy $6 billion in lost income from Suez revenue.
The Red Sea issue caused China International Marine Containers (CIMC) to boost container output fivefold in the first nine months of the year, resulting in a 36% rise in revenue and nearly doubled net profits.
Port congestion – Mid-month, the port congestion was still severe hovering at 2,53 million Twenty-Foot Equivalent Units (TEU), or 8.2% of the world’s fleet.
Sailings steady – While Drewry’s Cancelled Sailings Tracker showed a 7% cancellation rate for mid-November to mid-December, indicating that scheduling is still largely steady.MSC buying spree – Since 2020, MSC has acquired more than 420 resale vessels, expanding its fleet significantly. This has resulted in a drop in charter vessel availability.
International Air
Rates increase – The month began with a 5% increase in global air freight rates on the back of October’s numbers showing a 7% (y/y) increase in tonnage.
E-commerce driving change – The continued expansion of e-commerce has caused the industry to concentrate on efficiency and speed.
Local volumes up – Mid-month saw fluctuations in freight volumes and rates. In week 45, the average daily air freight handled at Oliver Tambo International Airport was 637 008 kg inbound (up 11%, w/w) and 401 814 kg outward (up 9%).
This led to an average increase of 5% above the numbers recorded in November 2023 and a comparable increase over pre-pandemic levels (8% more compared to October 2019).
Continued growth – Worldwide cargo tonne-kilometres (CTK) climbed by 9,4% (y/y) in September 2024, marking the 14th consecutive month of demand growth for the global air cargo industry.
Port Operations
Port challenges – The month kicked off with mixed results for South African ports. TEU volumes fluctuated while ports dealt with equipment challenges.
In the second week, bad weather impacted Cape Town’s operations, while continued equipment shortcomings at other South African ports impacted efficiency.
Focus on Durban – Transnet National Ports Authority named Zutari, a renowned infrastructure and advising firm, as the ‘Transaction Advisor’ to verify the Island View Precinct Strategy and execution plan for the Port of Durban.
Throughput drops – In the 4th week, bad weather and equipment failures caused operating delays in Durban, while strong winds caused operations in Cape Town to be delayed for over 35 hours.
The October consolidated port figures from TNPA show lower throughput in all sectors. Containers dropped by a significant 29% (m/m), with the biggest drops coming from: Cape Town (down 49%), East London (dropped 44%), and Port Elizabeth (sliding by 49%).
Local and Cross-Border
Mozambique unrest – The month began with electoral tensions in Mozambique, resulting in limitations along the Machipanda and Lebombo borders, with officials advising truckers and transporters to avoid travel and park carefully.
The situation in Mozambique worsened with protests and border disruptions.
Protests around the country disrupted logistics and stopped regional trade flows by damaging important infrastructure, such as the Lebombo Border and the Maputo Corridor. Transporters kept drivers and vehicles off the road.
It was warned that the disruptions could put small enterprises, jobs, and informal trade at risk. Long-term economic setbacks are predicted for the entire SADC area, but especially for South Africa and Zimbabwe.
By the end of the month, border crossings were open, but authorities remain on high alert.
An increase in demand for logistics in Walvis Bay – The need for overland transportation has grown as a result of the Port of Walvis Bay’s increasing volumes. In order to transport 100,000 tonnes between Walvis Bay and Zambia over the course of the next three months, BHL Group has asked for help and is looking for an extra 300 vehicles.
Transporters who are interested must be registered in Namibia, Zambia, Zimbabwe, or Botswana.
New documentation requirement in Botswana – Botswana Unified Revenue Service now requires that each transit load use a separate clearance document for statistical tracking, which will add an administrative burden to transit procedures.