Logistics News Update – 21st May 2025

Welcome to another Logistics News Update.

We’re back and there’s plenty to report on since last week. What a week it’s been!

The positive news? On the USA and China agreeing to the 90-day truce, tariffs are reduced, so everyone is doing their best in the USA to get their stock in. Just to remind you, the US dropped it tariff from 145% to 30%, and China from 125% to 10%. This breakthrough, brokered in Geneva, has buoyed global markets – stock indices and the US dollar surged on the news. China calls U.S. trade talks ‘good’ but they remain quiet on next steps, Trump hints at calling Xi.

What does this mean for us in South Africa? In short, brace for tighter capacity and higher freight costs(you can see what the shipping lines are already doing below). Larger vessels are re-routed to the revived China–US lane; we’re likely to see reduced availability and increased rates elsewhere. Book now to lock in rates before they climb.

It didn’t take long for the shipping lines to make their move. MSC and Maersk have announced a General Rate Increase (GRI) effective 1 June 2025. MSC is first out of the gate with a $300 to $ 500 hike. As soon as the trade talks resumed between the US and China, it was clear rate increases were coming, and Maersk is even hinting at a “diamond tier” rate structure, and you will see below that MSC has announced their diamond tier rates.

Closer to home, the news is encouraging. Freight News reported last week that the “block exemption for ports, rail and key feeder corridors” has been gazetted, and industry leaders like SAAFF CEO Juanita Maree are calling it “excellent news.” Meanwhile, the agricultural sector is thriving – SA Wine projects an 11% improvement in grape yields this year, with similar gains across grain, soybean, and horticulture exports. With increased volumes and strong quality, the focus is firmly on expanding into new markets, especially China, even with tariff hurdles.

On The Ground

SHIPPING: Far East – Capacity Alert: MSC has introduced Diamond Tier rates effective 1 June 2025, in response to recent blank sailings and increased demand on the Trans-Pacific route. Space will be limited, and urgent cargo may need to be booked under these premium rates to secure space. Please place your orders well in advance.

Far East to South Africa – Tightening Capacity: Following the 90-day tariff truce between the US and China, there has been a sharp rise in US-bound bookings. Shipping lines are now shifting capacity to the US route, which is already affecting availability from China to South Africa. Expect growing pressure on space in the weeks ahead. Source: JAS

Ramaphosa’s Trump meeting a crucial moment for SA-US relations: All eyes are on South African President Cyril Ramaphosa this week as he meets with US President Donald Trump in the United States, accompanied by a delegation of senior ministers. Source: FreightNews

Let’s Learn: What Is a Certificate of Origin and When Do You Need One?

Following last week’s topic on rules of origin, let’s focus on a critical document that proves your goods qualify for preferential trade the Certificate of Origin.

What is it?
A Certificate of Origin (CO) is an official document that certifies the country in which your goods were manufactured. It’s issued by authorised bodies such as your local chamber of commerce and is essential when exporting under trade agreements like AGOA, SADC, or the EU–SA Trade Agreement.

Why is it important?
• It’s often a mandatory requirement for duty-free or reduced-tariff entry.
• Customs authorities in the destination country use it to verify eligibility under a trade agreement.
• Without it, your shipment could face delays, extra charges, or even rejection.

Types of Certificates of Origin

1. Preferential CO – Used when trading under a trade agreement (e.g. AGOA, SADC, EPA).
2. Non-preferential CO – Used when no agreement applies, but proof of origin is still required.

Tip for South African Exporters
Make sure your paperwork is accurate and complete. Even small mistakes can lead to rejections or penalties at customs.

💡 Tip: Create a checklist for every export that includes origin declarations, supporting invoices, and compliance documentation and ensure your clearing agent signs off before dispatch. A properly issued Certificate of Origin is your passport to smoother, more cost-effective international trade.

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NEWS

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WEEKLY NEWS SNAPSHOT

• SA avocado growers ship first fruit of season to China: South Africa’s avocado industry is continuing to grow its market share and has shipped its first produce for the season to Shanghai for a second year in a row after signing an agreement with China.
• Durban Port Enhances Capacity with New Cranes: Durban’s container terminal has invested approximately R1.5 billion over the past 18 months in new equipment, including the recent acquisition of ship-to-shore cranes. This investment is part of efforts to modernise port operations and improve cargo handling efficiency.
• Sugar Tariff Reduction Announced: The South African Revenue Service (SARS) has announced a reduction in the variable tariff formula rate of customs duty on sugar, effective May 9, 2025. This adjustment aims to balance domestic industry protection with consumer price considerations.
• Price Preference System Discount on Ferrous Scrap: The International Trade Administration Commission of South Africa (ITAC) has published a “Price Preference System” discount on ferrous scrap, effective May 8, 2025. This measure is intended to support local steel producers by ensuring access to affordable raw materials.
• OR Tambo Airfreight Volumes Increase Amid Challenges: Airfreight volumes at OR Tambo International Airport have risen 13% year-on-year, with imports and exports showing significant growth. However, the aviation sector faces challenges, including skills shortages and outdated air traffic procedures, leading to delays and cancellations. Transport Minister Barbara Creecy has initiated an urgent action plan to address these issues.
• Foot-and-Mouth Disease Reappears in Mpumalanga and Gauteng: New cases of foot-and-mouth disease have been reported in Mpumalanga and Gauteng, prompting China to suspend imports of cloven-hoofed animals and related products from South Africa. This development poses challenges for the livestock industry and export markets.
• PwC Forecasts Tightrope for 2025 Budget: PwC reports that Finance Minister Enoch Godongwana faces a challenging balance between stimulating economic growth and managing fiscal constraints in the upcoming 2025 budget. State-owned entities like Transnet and Eskom require significant investment, with Transnet needing R90 billion to modernise its infrastructure. Despite these challenges, 83% of CEOs in South Africa expect economic growth to improve in 2025.  Source: – FreightNews

Key Highlights from Last Week’s Discussions: Source: BUSA

1. Port Volumes Drop as Operational Challenges Persist

• Total port throughput fell 16% week-on-week, with daily averages down to 9,813 TEUs.
• Main disruptions stemmed from equipment breakdowns in Durban, adverse weather in Cape Town, and vacant berths across Eastern Cape ports.
• Richards Bay handled 177,900 tons daily, up 45%, while Durban’s Pier 2 rail volumes rose 58% to 3,041 containers.

2. Rail & Road Networks Under Pressure

• Cable theft on the Durban–Pietermaritzburg lines caused 6-hour delays on two separate days.
• The Mafikeng line was closed for scheduled maintenance and will reopen after 12 May.
• Cross-border queue times dropped to 3.9 hours, and transit times fell to 3.8 hours, saving ~R 53 million in indirect costs.
• Truck volumes on the N4 corridor rose 10%, nearing capacity, while Lebombo saw convoy formations for fuel tankers amid smuggling concerns.

3. Air Cargo Sees Modest Rebound

• Air cargo volumes rose 5%, led by inbound shipments to Johannesburg and Durban.
• Year-on-year, Cape Town saw 34% growth, while Durban was up 50%.
• Despite this, total international air cargo remains 1% below 2024 and 18% below 2019 levels.

Global Trade & Freight Trends

1. US–China Tariff Truce Boosts Market Confidence

• A 90-day reduction in tariffs (from 145% to 30% for US and 125% to 10% for China) is expected to trigger a spike in Trans-Pacific volumes.
• Carriers have announced peak season surcharges of $1 000–$2 000 per FEU, with rates to the US West Coast possibly exceeding $3 500/FEU.

2. Freight Rates Stabilise (For Now)

• Drewry’s World Container Index dropped marginally by 0.7% to $2 076, but a rate rebound is expected.
• Charter rates, especially for vessels >5 000 TEU, are falling due to capacity uncertainty.
• Over 56% of new vessel capacity is now LNG-powered, with methanol gaining traction, signalling a structural fuel transition.

3. SADC Trade Corridors Steady but Delays Persist

• Median SA border crossing times dropped 32% to ~7.9 hours, while the wider SADC region remained stable at 4.7 hours.
• Beitbridge and Groblersbrug remain the most congested, while Lebombo saw notable improvement.

Port Operations Summary: – Port Update:

SOUTH AFRICAN PORTS

Durban
Pier 1: 0–2 days delay
Pier 2: No delays
Durban Point: 0–2 days delay

Cape Town
CTCT: 0–8 days delay
MPT: No delays

Port Elizabeth
PECT: No delays
NCT: No delays

Source: GoComet

Global Freight Rates

World Container Index –15th May 2025

Drewry’s World Container Index rose by 8% this week, reaching $2,233 per 40-foot container. This marks a notable shift after previous declines, driven largely by renewed demand on transpacific routes and easing U.S.–China trade tensions. While still 78% below the COVID-peak of $10,377, current rates remain 57% higher than pre-pandemic levels. Analysts warn of continued volatility, especially as carriers manage capacity and peak season approaches. Companies using index-linked contracts are encouraged to monitor rate movements closely or consult freight benchmarking teams for deeper regional insights. 

– Source: Drewrey

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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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