General Overview
Container rates continue to head south – The month got off to a good start with Drewry predicting that container if rates continue to decline, as the trend suggests, it is anticipated that 40-foot container rates will decrease by almost 70% by June 2025.
Trade Surplus up – SARS’ July ‘Merchandise Trade Statistics’ revealed a preliminary monthly trade surplus of R17,6 billion, with exports increasing by 1.8% (month-on-month) and imports up by 6.6%, compared to 2023.
Rates continue to drop – By the middle of the month Drewery’s predicted trend continued with container rates decreasing by another 7.5% (or $607), trading at $4 168 for a 40-foot.
SIU to investigate Transnet – President Cyril Ramaphosa signed Proclamation 174 of 2024, authorising the Special Investigating Unit to investigate allegations of serious maladministration within Transnet and to recover any financial losses suffered by the State or Transnet.
Getting to grips with high winds – Transnet National Ports Authority acquired six new hydraulic shore tension units for the Cape Town and Ngqura (also known as Coega) ports, aimed at addressing shipping and cargo-handling delays caused by long waves. The units assist with stabilising docked vessels during strong winds, adverse weather conditions, and high swells.
Global Shipping
Reliability down – With the Global Container Port Throughput Index climbing, late vessel arrivals and dependability continued, with only a couple of carriers being rated as dependable.
July’s Trade figures vary – Sub-Saharan Africa trade exports for July were up by 2.1%, while imports’ annual
trade fell by 8.8%.
South Africa’s share in Sub-Saharan Africa trade continued climbing, accounting for 27% of imports and 45% of exports, but below highs in February and September 2022.
Significant rates drop – Drewry’s ‘World Container Index’ recorded a significant 14% drop on the Shanghai-
Rotterdam route, while Xeneta’s XSI Asia-Europe price also fell 10%.
Record profits – The global container shipping industry saw profits surge to over $10 billion in Q2, driven by record volumes and rising freight rates after Red Sea diversions. Major carriers’ net income nearly doubled from Q1 to Q2, surpassing $8,88 billion from Q2 2023.
Changes for 2025 – The Premier Alliance and MSC have announced a new partnership covering nine Asia-
Europe services starting in February 2025. This announcement will pave the way for a new alliance competition with the newly established OCEAN Alliance and the newly founded Gemini Cooperation next
year.
Delays in Durban – In the middle of the month, Durban’s queue-to-berth ratio was 1,29, the highest measurement of the year. At its peak, there was about 41 000 TEU waiting to be off-loaded outside at anchoring.
International Air
OR Tambo sees year-on-year increase – The average daily air cargo handled at Oliver Tambo International Airport in the last week of August was 898 548 kg, indicating a significant increase compared to last year, but slightly down on pre-pandemic levels.
Airlines resist new security measures – Foreign airlines have taken strong stances against the US Transportation Security Administration’s emergency security measure that requires additional information about shippers and consignees for airfreight.
A good year for the air industry – The air cargo industry is well-positioned for a successful year because of factors like maritime transportation restrictions, e-commerce, and global trade.
Increased demand and capacity – IATA reported global capacity increased by 8,3% in July, while air cargo
demand grew by 13,6% year-on-year. A rise of 12,8% in international belly capacity and 6,9% in freighter
capacity drove an increase in capacity to 8,3%.
Major upgrade – Construction work has now begun on Lufthansa Cargo’s €600m renovation project to modernise its cargo hub at Frankfurt Airport by 2030.
The construction work is being carried out in sections so that daily operations can continue undisturbed in
the 330,000 m² Lufthansa Cargo Centre, one of the largest airfreight hubs in Europe.
E-commerce demands remain – Cainiao, a subsidiary of Alibaba, has begun twice-weekly flights from Xi’an to Liege, Belgium, to facilitate quicker cross-border parcel delivery throughout Europe.
Spot rates, record high – In early September 2024, growing tonnages and rates from Asia Pacific to North
America and Europe propelled global air freight spot rates to a record high. Average spot rates rose 6% to
$2,85 per kilogram, up 30% on an annual basis.
Asia Pacific had the biggest increases, accounting for 6% and Middle East & South Asia for 7%, respectively,
raising rates by 41%.
Rates still rising – Global contract rates increased by around 3% to $2,48/kg. In all, the spot and contract
pricing increased by approximately 3% week-on-week and 16% year-on-year to $2,59/kg.
Sustained growth – The month ended with continued growth, with capacity rising by 8% in August and
demand rising by 8,9% in July.
The average daily air freight handled at O.R. Tambo International Airport was 573 144 kg; inbound up 2%
week-on-week and 412 112 kg outbound, up 4%.
Capacity up – In August 2024, the capacity of the air freight business worldwide increased by 8%, mostly due to the rebound in international passenger travel, especially in the Asia Pacific area. While freighter capacity has not changed, some capacity constraints have been eased by adding passenger belly room.
Port Operations
Bad weather – The month began with South African ports experiencing delays due to the seasonally bad
weather.
Rail in Africa – Grindrod Limited returned 13 locomotives from Sierra Leone after successfully hauling over 18 million tonnes of iron ore over three years.
Grindrod emphasized the role that rail plays in its integrated logistics strategy, emphasizing collaborations and expansion prospects in the SADC and East Africa regions.
Rail news – In the first week, rail cargo handled out of Durban increased by 2% from the previous week’s 2,915.
Catching up – By the middle of the month port activity was returning to normal. Transnet National Ports
Authority reported that container counts rose by a significant 14% month-on-month, led by significant gains
from Durban ( up14%), East London (up 33%), and Port Elizabeth (up 38%), partly because of the robust
citrus exports.
Exports account for nearly all of the growth, showing an improvement of 29%.
ConCor woes – Returning to service on completion of the annual shutdown, the rail network was met with
extensive cable theft and a derailment on the line.
Snowbound – the month ended with the worst winter weather of the year hitting KZN, with freezing
temperatures and a lot of snowfall inland.
This resulted in the closure of the N3 route between Durban and Johannesburg on Saturday, September 21,
trapping cars and trucks, requiring rescue operations for stranded drivers.
Hazardous conditions and blocked lanes persisted throughout the weekend as officials attempted to clear the road.
Local and Cross-Border
Mpox impact – The month began with long delays at South African borders which, on average, increased
dramatically, averaging 15,8 hours; up 40% week-on-week.
This was largely due to delays at Groblersbrug and Skilpadshek due to the implementation of Mpox screening, there and at other entrance ports. The result was daily lines for northbound traffic reaching four
kilometres.
Traffic disruptions – As the month continued there were several incidents causing delays. The N3 remained
under pressure as authorities cleaned up after the heavy snowfall.
A community protest occurred on the N1 between Solomondale and Botlokwa with police working to ensure traffic movement. A protest was attempted at Baobab Tollgate, but a heavy police presence prevented traffic disruptions.
Security in the spotlight – Security is a growing concern at Beitbridge as items belonging to a truck driver
were taken at Beitbridge’s Southbound Yard, bringing the total of such incidents to five in the previous
thirty days.
This prompted the implementation of more security measures, such as plainclothes personnel and better ZRP and Zimra communication.
Testing new border crossing – The Namibia Revenue Agency announced the start of the pilot testing of the
One Stop Border Post at the Trans-Kalahari/Mamuno Border Posts.
The One Stop Border Post is a border management initiative that streamlines the clearance process for travellers and goods through a single border facility, using harmonized procedures between Namibia and
Botswana.
Transnet finance woes – Transnet’s financial results for 2024 show an 11.6% increase in revenue and a 13.6% rise in cash generated from operations. Capital investment surged by 20.1%, indicating robust infrastructure spending. However, earnings before interest, taxes, depreciation, and amortization declined by 3.6% due to operational inefficiencies.
In the latest financials, Transnet reported a R7,3 billion loss due to an R4.8 billion provision for the NATREF
litigation matter. The restatements of prior financials indicate historical errors, and auditors have expressed concerns about Transnet’s ability to continue as a going concern.
307 billion Rand needed for roads – Transport Minister Barbara Creecy says that the South African National Roads Agency requires design and construction work on 1 437 projects. This is over and above the heavy bill South Africa faces to upgrade its port, rail and electricity infrastructure.
Choke blocks in Zimbabwe – Authorities announced that all vehicles entering Zimbabwe, with immediate effect must have a wheel choke block to avoid paying spot fines.
SARS adds invoice details to EDI messaging – On Friday, September 13, SARS announced that starting on that day, invoice details will be included in all EDI Customs Declaration Messages. The change is not
mandatory at this stage.