Welcome to another Logistics News Update.
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Now, onto this week’s news.
Here are the highlighted stories from the past week and what is happening now that I think are important to note.
MSC’s Detour to Eastern Cape Ports Raises Concerns: Mediterranean Shipping Company (MSC) has been bypassing Cape Town and Durban, opting to offload containers at Coega and Port Elizabeth. This unexpected move has led to significant challenges for importers and exporters. Containers have been stranded at these ports for over a month, incurring substantial storage fees, change-of-destination charges, and other costs that can exceed R60,000. The process of retrieving containers is complex and time-consuming, with potential delays of several weeks.
South Africa’s trade relations with China are flourishing, thanks to recent trade agreements. These agreements have expanded the Chinese market for South African products, boosting exports in agriculture, manufacturing, and other sectors. Additionally, they foster cooperation in energy, science, and technology. The goal is to increase South Africa’s exports to China and reduce the trade imbalance.
Meanwhile, the Port of East London has received a significant investment of R1 billion to modernize its infrastructure. Two new advanced tugboats have been added, enhancing vessel navigation, pilotage, and pollution management. This investment is a crucial step towards improving port efficiency and supporting economic growth in the Eastern Cape.
Container Spot Rates Take a Dive: Recent disruptions in the Red Sea and Suez Canal, along with congestion at major ports, have caused a significant drop in container spot rates between Asia and Europe. Rates for trades like Shanghai to Rotterdam and Genoa have seen decreases of up to 8%, while the Transpacific route has experienced a more modest decline. However, the Transatlantic route has seen a notable increase in rates.
Did you know?
Did You Know: Vessel Bypassing Can Delay Your Shipment
What is it?
Vessel bypassing happens when a port is too congested or experiencing bad weather, forcing a ship to skip it and head to the next port. This can delay your shipment.
What can you do?
1. Re-routing Cargo
2. Arrange for Transshipment
3. Storage at a Different Port
4. Negotiate with the Shipping Line
Contact your agent: They can help you find alternative ways to get your shipment where it needs to go, such as putting it on a different ship or bringing it back to the bypassed port later.
Remember: There’s no quick fix once a ship bypasses the port. Be patient and work with your agent to find a solution.
Contact Kevin Pillay on Kevin.Pillay@fnb.co.za for more information
HELP CHANGES EVERYTHING
On The Ground Report
Maersk take Transnet to Court: The transformation of South Africa’s supply chains may face further delays due to a legal dispute initiated by AP Moller-Mærsk’s APM Terminals. The company is challenging Transnet’s decision to grant a 25-year concession of a Durban container terminal to Filipino operator International Container Terminal Services Inc. (ICTSI). This legal bid could impact the progress of reforms aimed at improving port and rail operations under Transnet’s management. For more details, visit the original story here.
Weather is still playing a big role in the delays at the ports, client that have had shipments bypass feel stranded and the only quick fix is “pay up” the shipping lines are happy to help if you pay your part.
This Weeks Key News Takeaways
Efficient logistics: Crucial for South Africa’s economic growth.
Source: Freight news
South Africa-China trade: New agreements boost exports from South Africa to China.
Panama Canal: Sets a new record for the largest ship passing through.
Transnet: Facing challenges and calls for better data on logistics.
SA fruit traders: Making inroads in East Africa.
Ship fire proliferation: Call for concerted effort to address the issue.
NEWS
China Opens Markets Wider for Africa
6 September 2024 – by Staff Reporter
In a major announcement, China has pledged to significantly increase economic cooperation with Africa. This includes:
- Tariff-free access for all African least developed countries to China’s market.
- Increased access for African agricultural products.
- Infrastructure development projects across Africa.
- Investment in clean energy, healthcare, and education.
This move is expected to create significant opportunities for African businesses and economies.
Adapted from Source: Freight News read the full story here
WTO trade barometer signals volume growth
30 August 2024 – by Eugene Goddard
Source: Redmond Magazine
The World Trade Organization’s (WTO) latest Goods Trade Barometer shows positive signs for global trade growth, with a reading of 99.1 in Q2 2023, indicating a modest upturn in merchandise trade after two previous quarters of decline. This improvement has been driven primarily by strong performance in automotive production and sales. However, the future outlook remains uncertain, as weak export orders and global economic pressures, such as high food and energy prices linked to the war in Ukraine, continue to weigh on growth prospects.
Despite these challenges, automotive exports have provided a boost to economies like Japan and China. While trade volume is expected to grow by 1.7% in 2023, this target may only be met if stronger growth materializes in the second half of the year.
For more detailed insights, you can visit the original article here.
Adapted from Source: Freight News
PORTS
South African Ports Face Disruptions Due to Adverse Weather
Key Challenges:
- Significant Delays: Average anchorage times for container vessels remain high, particularly at Durban and Port Elizabeth.
- Weather-Related Disruptions: Both Cape Town and Ngqura have experienced operational delays due to strong winds and rain.
- Operational Challenges: Tug shortages and adverse weather conditions have impacted vessel movements in Durban.
Port-Specific Updates:
- Durban: Multiple vessels are currently at anchor due to equipment issues and weather.
- Cape Town: Operations have been disrupted by strong winds and rain.
- Ngqura: The port has faced delays due to adverse weather conditions.
Overall, South African ports have experienced significant disruptions due to adverse weather conditions. This has led to delays, congestion, and reduced productivity.
Durban:
- Pier 1: 8-9 days
- Pier 2: 9-16 days
- Durban Point: 3 days
Cape Town:
- CTCT: 2-3 days
- MPT: 1-2 days
Port Elizabeth:
- PECT: 4-6 days
- NCT: 6-10 days
NOTE: We recommend factoring these potential delays into your shipment planning to avoid disruptions.
Summary of Global Shipping Industry
Container Throughput and Trade:
- Global: Container volume declined slightly in July but remains up year-over-year.
- Regional: Australasia and Oceania experienced a notable decline, while other regions remained relatively stable.
- Sub-Saharan Africa: Both exports and imports decreased slightly in July.
Price Index:
- Increase: The global price index for dry and reefer containers rose significantly.
Summary of Global Container Freight Rates
Key Developments:
- Rate Decline: Container spot freight rates between Asia and Europe have decreased significantly due to weakening demand.
- Capacity Reduction: Carriers are reducing capacity through blank sailings to mitigate the impact of declining demand.
- Shipping Line Profits: Container shipping companies recorded strong profits in the second quarter due to record volumes and rising rates.
- Weather Disruptions: Super Typhoon Yagi is expected to impact China, potentially causing disruptions to air and sea operations.
- MSC Acquisition: MSC has received approval to acquire a stake in HHLA.
Overall, the global container shipping industry is experiencing a period of adjustment. While freight rates have declined, shipping lines continue to benefit from strong profits. However, weather disruptions and ongoing industry developments pose challenges for the sector.
BUSA-SAAFF Summary – Summary
Transnet’s Financial Results Highlight Challenges and Opportunities
Key Developments:
- Financial Performance: Transnet reported increased revenue and capital investment but faced declining EBITDA and a significant loss due to litigation and increased finance costs.
- Operational Challenges: Actual throughput fell short of budgeted targets in all sub-sectors.
- Financial Concerns: The restatements of prior financials and auditors’ concerns raise questions about Transnet’s financial sustainability.
Looking Ahead:
Despite these difficulties, collaboration between business, industry, and Transnet is crucial for ensuring its recovery. By working together, we can address challenges and leverage growth opportunities. Transnet’s strategic investments and recovery plan demonstrate the potential for a turnaround. Perseverance and collective action are essential to rebuilding and strengthening South Africa’s logistics infrastructure for the future. Source::BUSA
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This week’s news was brought to you by:
FNB First Trade 360 – a digital logistics platform and Exporters Western Cape
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