Logistics News Update -16th Jan 2025

We look forward to providing you with the best news and service in 2025. As we dive into the new year, we are excited to be back and committed....

Welcome to another Logistics News Update.

We look forward to providing you with the best news and service in 2025.

As we dive into the new year, we are excited to be back and committed to bringing you the most relevant logistics updates to help you navigate your operations with confidence throughout 2025.

One important date to keep in mind is the Chinese New Year, which begins early this year, running from the evening of January 28th to February 4th. Many of our Chinese partners have already reported that vessels are fully booked for this period. Rates will reflect the last available pricing, so plan accordingly. Additionally, please ensure that all required documentation is secured before the break, as most Chinese companies will close as early as January 24th, with some already shutting operations by the 27th. Preparation is key to avoiding disruptions during this time.

In Africa, Mozambique made headlines over the festive season due to unrest in certain areas. While there have been conflicting reports, we are pleased to share that operations and cargo flows currently appear to be moving smoothly. Rest assured, we are closely monitoring the situation and will keep you informed of any developments, see our story from the Sunday paper below, where experts are asking South Africa to jump in and help.

Here’s to a productive and successful year ahead!


NEWS

Shippers frontload ahead of predicted Trump tariffs

13th January 2025 – Staff Reporter

Source: Baltric Exchange

In early 2025, the global air cargo market experienced a seasonal decline in rates following the peak season. The Baltic Air Freight Index (BAI) reported a 3.7% week-on-week decrease as of January 6, though it remained 25.9% higher year-over-year. Despite this typical post-holiday slowdown, the market remained unusually active for January.

This heightened activity was largely due to shippers expediting inventory movements to circumvent anticipated U.S. tariffs on Chinese imports, expected to be implemented later in the month by the incoming Trump administration. Additionally, ongoing disruptions in the Red Sea shipping routes have led to supply chain challenges, further increasing airfreight demand, particularly for high-value goods transported from Asia to Europe.

The surge in pre-tariff shipments has caused temporary bottlenecks in specific airfreight corridors, notably for electronics, textiles, and machinery moving from China to the U.S. In response to tariff pressures, there is an accelerated shift of manufacturing operations from China to Southeast Asia and Mexico, reflected in the growing air cargo demand on intra-Asia and Asia-Latin America routes.

Looking ahead, industry analysts anticipate that global air cargo traffic will grow between 4% and 5% in 2025, following an estimated 12% expansion in 2024. Shippers are advised to prepare for continued volatility in the first quarter of 2025. To navigate these uncertainties, stakeholders are encouraged to adopt flexible strategies, diversify sourcing options, and implement robust risk mitigation plans.

– Adapted from Source: Freight News

Pretoria’s ‘duty’ to help end Mozambique’s crisis

12th January 2025 – CHRIS BARRON

Durban There’s always that narrative of sovereignty and each country must sort out its own problems, but what people underestimate is the regional impact. If we want economic growth in South Africa, in Mozambique, in the region, then that must be our central driver. We cannot have a hands-off approach. (Picture: File Image)


South Africa is stepping up diplomatic efforts to address Mozambique’s escalating crisis following disputed elections in October 2024. Minister of International Relations and Co-operation Ronald Lamola emphasized South Africa’s commitment to regional stability, urging dialogue among Mozambican stakeholders to restore peace. The unrest has disrupted trade at the Lebombo border post, a key link for goods between the countries, with protests partially closing the route and causing significant economic losses.To mitigate the crisis, South Africa has deployed the National Joint Operational and Intelligence Structure (Natjoints) to secure the border and prevent opportunistic crimes. President Cyril Ramaphosa appointed Prof. Sydney Mufamadi as a special envoy to engage with Mozambican stakeholders. The government has also advised freight forwarders to explore alternative routes while working to stabilize the situation.The crisis threatens not only regional security but also vital trade, food, and energy supplies. South African and Mozambican officials are collaborating on measures to ease trade disruptions and protect infrastructure. They are exploring alternative trade routes and deploying additional resources to safeguard economic activity, highlighting the urgency of restoring stability for the well-being of the region… 

– Adapted from Source: The Sunday Times Business  


On The Ground Report

Port of Durban:
Operational challenges persist at the Port of Durban, primarily due to a severe shortage of straddle carriers. This has significantly impacted Pier 2 operations, causing increased delays and congestion. Transnet Port Terminals has acknowledged these challenges and is actively working on addressing the equipment shortages. However, stakeholders should anticipate continued disruptions until substantial improvements are implemented.

Port of Cape Town:
In contrast, the Port of Cape Town is demonstrating progress in enhancing its operational capacity. The Cape Town Container Terminal (CTCT) recently added 10 new haulers to its fleet, bringing the total to 56. This expansion is part of a broader initiative aimed at streamlining operations, reducing delays, and boosting efficiency. Initial feedback from stakeholders indicates improvements in turnaround times and service levels.

Advisory:
Stakeholders are encouraged to remain updated on the evolving situations at both ports. Strategic planning and proactive communication with logistics partners are essential to navigate current challenges and leverage improvements effectively.

Weekly Snapshot

  • Port Volumes: Container throughput has increased by 5%, with a total of 59,403 containers handled—28,988 imports and 30,415 exports.
  • Air Cargo: Volumes have risen by 11%, totalling 6,081 tons handled.
  • Rail Cargo: Rail operations out of Durban have declined by 14%, with 2,429 containers handled.
  • Cross-border Delays: Average border crossing times at South African borders have increased by 9% to approximately 14.2 hours, while in the SADC region, times have decreased by 12% to around 6.8 hours.

These figures highlight ongoing challenges and improvements within South Africa’s logistics and supply chain sectors.

Key Observations

  • Container Rates: As of December 5, 2024, global container shipping rates have increased by 142% year-over-year, with the average price for shipping a 40-foot container at $3,553.
  • Air Cargo Growth: In November 2024, global air cargo demand rose by 8.2% compared to November 2023, marking the sixteenth consecutive month of growth.

Port Operations Summary: – Port Update: Week of Jan 8th – 13th, 2025

As of January 13, 2025, South African ports continue to face operational challenges:

  1. Durban Port:
    • Pier 1: Delays have increased significantly, now averaging 10–12 days due to equipment shortages and high vessel traffic.
    • Pier 2: Delays remain at 15 weeks for some vessels. The implementation of a recovery plan, including new equipment procurement, is expected to provide gradual improvements.
    • Durban Point (MPT): Severe congestion persists, with delays averaging 8–10 days.
  2. Cape Town Port:
    • CTCT: Operations are severely impacted by adverse weather conditions and equipment shortages, with vessels waiting between 7–13 days.
    • MPT: Minimal delays reported; operations are running smoothly despite broader challenges.
  3. Port Elizabeth/Ngqura:
    • PECT: Operations are stable, with average delays of 1–2 days.
    • NCT: Efforts to deploy additional hydraulic shore tension units have reduced delays to less than 1 day.

Additional Developments:

  • Beira Port (Mozambique): Congestion continues, with shipping lines reporting delays of up to 12 days and surcharges in effect.
  • Cape of Good Hope: Increased maritime traffic due to regional tensions has led to extended transit times and higher shipment costs.

While some measures, such as Transnet’s procurement of new equipment and funding initiatives, are underway, stakeholders are advised to prepare for prolonged disruptions. Continuous monitoring is recommended for the latest updates.

Global Shipping Industry Impact

US East Coast Labor Negotiations:

  • A potential strike by dockworkers on the U.S. East and Gulf Coasts has been averted following a tentative six-year agreement between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX).
  • This agreement prevents disruptions at major economic gateways, allowing port modernization and the integration of new technologies.
  • The resolution follows a previous three-day strike in October 2024 that caused vessel backlogs and up to 40% capacity loss on Asia-US East Coast routes.

Container Market:

  • The global container ship orderbook reached a new high of 8.3 million TEUs (twenty-foot equivalent units) by the end of 2024, exceeding the previous peak of 7.8 million TEUs.
  • The majority of new orders, representing 92% of the total, consist of vessels with capacities of 8,000 TEUs or more. Deliveries are expected between 2025 and 2029.
  • Analysts have raised concerns about potential overcapacity in the market as the influx of larger vessels could outpace global demand.

Industry Implications:

  • The resolution of labour disputes on the U.S. East and Gulf Coasts ensures stability in critical trade routes.
  • However, the rapid growth of the container ship fleet could result in imbalances, impacting shipping rates and operational efficiency across the global supply chain.
  • Stakeholders are advised to monitor these developments and adapt strategies to mitigate potential disruptions.

Air Cargo Performance

  • Demand Growth: In November 2024, global air cargo demand increased by 8.2% year-over-year, marking the sixteenth consecutive month of growth.
  • Capacity and Rates: At the start of 2025, global air cargo capacity has shifted towards Asia, with elevated spot rates expected through January due to strong demand and market volatility.

Road Freight and Regional Updates

  • Cross-Border Delays: Border times increased slightly in South Africa and the SADC region, with delays primarily due to the introduction of a new biometric identification system at several border posts.

Summary

The logistics network showed improvement, with port volumes rising despite ongoing operational challenges. However, weather and equipment issues at key South African ports, along with global disruptions like the US port strike, continue to strain logistics flows.. – Source: BUSA

Weekly Roundup: Key Developments and Insights from the Industry Local & International

  • Airfreight Demand in Africa: In November, total cargo demand, measured in cargo tonne-kilometres, grew by 8.2%.
  • European Acquisition Boosts Prospects for South African Avocados: Westfalia’s recent acquisition in Europe is expected to enhance exports of frozen avocados from southern Africa.
  • Trade Access Concerns Ahead of Trump Inauguration: Uncertainty looms over trade relations, with potential investigations into whether South Africa poses a risk to the U.S.
  • Tenuous Peace in Mozambique: Political tensions ease slightly as Podemos leader arrives, greeted by thousands of supporters, amid recent unrest.
  • Neasa Urges Removal of Steel Duties: The National Employers’ Association of South Africa calls on the International Trade Administration Commission to eliminate steel duties, while the Department of Trade, Industry and Competition seeks a lasting solution with ArcelorMittal.
  • Freight Forwarding Industry Outlook for 2025: Executives highlight growth and transformation, emphasizing the role of cutting-edge technologies in optimizing supply chain operations.
  • Maputo Corridor Trade Update: Trade specialists address concerns, countering alarmist views about the corridor’s stability and efficiency.

Summary of Global Shipping Industry

Labour Negotiations and Port Operations

In early January 2025, the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) reached a tentative six-year agreement, averting a potential strike that could have disrupted operations at major East and Gulf Coast ports. The agreement aims to protect existing jobs while allowing for port modernization and the integration of new technologies. Specific details of the deal remain undisclosed, pending member review and ratification. Source: MarketWatch

Despite the resolution, residual congestion persists, with vessels queuing at several ports. Analysts caution that even short-term disruptions can lead to significant capacity losses. For instance, a three-day backlog could result in a 17% capacity reduction on Asia–US East Coast routes, while a week-long delay may cause up to a 40% loss. Exporters, particularly in Asia, North Europe, and the Mediterranean, should remain vigilant and prepare for potential short-term capacity constraints. Source: Portnews

ii. Container Market Summary and Current Orderbook

The global container ship orderbook has reached unprecedented levels. By the end of 2024, it stood at 8.3 million TEUs (twenty-foot equivalent units), surpassing the previous peak of 7.8 million TEUs in early 2023. This surge is driven by substantial orders placed during 2024, totalling 4.4 million TEUs, with deliveries scheduled predominantly between 2025 and 2029. Notably, 92% of the orderbook consists of vessels with capacities of 8,000 TEUs or larger, reflecting a trend towards larger ships in the industry. Source: Marine Insight

Analysts highlight that nearly half of these new builds are necessary for replacing aging fleets, with approximately 683 vessels (totalling 2.6 million TEUs) over 20 years old still in service. The influx of new, larger vessels is expected to enhance efficiency and reduce CO₂ emissions. However, there are concerns about potential overcapacity in the market, which could impact shipping rates and operational efficiency across the global supply chain. Stakeholders are advised to monitor these developments closely and adapt strategies to mitigate potential disruptions. Source: Container News

Global Container Freight Rates

As of January 9, 2025, Drewry’s World Container Index (WCI) has shown an upward trend. The composite index increased by 2% to $3,986 per 40-foot container, marking a 62% decrease from the peak of $10,377 observed in September 2021, yet remaining 181% above the pre-pandemic average of $1,420 in 2019. Source Hellenic Shipping News

In parallel, the Harper Petersen Charter Rates Index (Harpex), which reflects worldwide container ship charter market pricing, has exhibited resilience. Although specific figures for January 2025 are not detailed in the available sources, the index has historically demonstrated stability, with six-to-twelve-month charter rates for container vessels and feeders in the 4,500-8,500 TEU range trading significantly higher than pre-pandemic levels.  Source: Ing

These indices suggest a complex landscape in global container freight rates, with spot rates experiencing fluctuations while charter rates maintain relative stability. Stakeholders should continue to monitor these trends closely to navigate the evolving market conditions effectively.

Disclaimer: The information provided in this newsletter is based on reliable sources and has been carefully verified. This Logistics News is distributed free of charge. If you wish to unsubscribe from our mailing list, please reply to this email with “unsubscribe” in the subject line. Please note that all content is adapted or directly quoted from its original sources.

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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