PUBLISHER: BUSA
This update – the 104th of its kind – contains a consolidated overview of the South African supply chain and
the current state of international trade. Port operations this past week were characterised by strong winds,
vessel ranging, equipment breakdowns, and congestion. For example, in Durban, external truck breakdowns
and system downtime caused congestion at the port exit gate, while the port helicopter went out of
commission once more due to a service bulletin that needed to be carried out. In addition, TFR advised that
the return to service of the second line on the Durban-Cato Ridge railway had been pushed back and was
now only expected to return to service on 1 October 2022. Furthermore, Transnet reported that the Eastern
Cape port engineers are expected to provide an update on the Moormaster at Ngqura next week, while an
update on the second set of shore tensioners in Cape Town is also expected.
Key Notes:
- An average of ~8 807 containers was handled per day, with ~8 952 containers projected for next week.
- Rail cargo handled out of Durban amounted to 1 708 containers, ↓34% compared to last week.
- This week, cross-border queue times were the same, with transit times ↑0,9 hours, SA borders ~16 hours.
- CTS container throughput (imports & export) is down by ↓2,1% (m/m), but up by ↑0,6% (y/y) for July.
- Liner schedule reliability improved by ↑0,5% (m/m) to 40,5%, with average late arrivals at 6,15 days.
- The “WCI” dropped for the 28th week, with spot rates down by ↓5% ($283) to $5 379 per 40ft.
- Air cargo is ↓9,7% (y/y) but stable versus pre-pandemic times as passenger recovery continues.
Port operations – General:
- Port operations this past week were characterised by strong winds, vessel ranging, equipment breakdowns, and congestion.
- For example, in Durban, external truck breakdowns and system downtime caused congestion at the port exit gate, while the port helicopter went out of commission once more due to a service bulletin that needed to be carried out.
- In addition, TFR advised that the return to service of the second line on the Durban-Cato Ridge railway had been pushed back and was now only expected to return to service on 1 October 2022.
- Furthermore, Transnet reported that the Eastern Cape port engineers are expected to provide an update on the Moormaster at Ngqura next week, while an update on the second set of shore tensioners in Cape Town is also expected.
Port operations – Performance metrics:
- CTCT stack occupancy for GP containers was 34%, reefers 62%, and empties 32%.
- CTCT handled ~1 529 containers per day, with an increased average of ~2 038 projected this week.
- DCT Pier 1: Stack occupancy was 68% for GP containers and 89% for reefers with 1 791 imports on hand, 877 reefers and 257 unassigned units.
- DCT Pier 2: Stack occupancy was 67% for GP containers and 75% for reefers, highlighting an improvement at the terminal after the backlogs experienced last week.
- The terminal had between 79 and 86 straddles in operation throughout the week, operated by twelve gangs.
- DCT Pier 1 handled ~1 430 containers per day, with an increased average of ~1 850 this week.
- DCT Pier 2 handled ~3 761 containers per day, with an increased average of ~4 068 this week.
- Average TTT for DCT this week: 101 minutes (↑23%), with a staging time of 169 minutes (↑110%).
- In the last week (3 to 9 September), rail cargo handled out of Durban was reported at 1 708 containers,
down by ↓34% from the previous week’s 2 587 containers.
Local and cross-border road:
- In the road freight sector, cross-border transit times for our borders averaged ~16 hours(↓16% w/w), with several border posts, including Cassacatiza, Chirundu, Dedza, Lebombo, Kasumbalesa, Kazungula, and Kopfontein experiencing significant delays.
- Apart from regional cross-border delays, most additional developments of note concern Zimbabwe and includes (1) the DHA has extended the exemption granted to Zimbabwean Nationals by six months, (2) Fines from ZIMRA for changing vehicle registration details, (3) State visits at borders cause traffic havoc, and (4) TIP updates.
- For the SADC region, cross-border transit times hovered around ~19,1 hours (up by ~0,9 hours from the ~18,2 hours recorded in the previous report).
- For August, the average daily cross-border road freight volume moved through some key South African border posts is summarised below:
- Table 1 – Total domestic inbound and outbound cargo
SA GDP – Q2 2022:
- South Africa’s real gross domestic product (measured by production) decreased by ↓0,7% (q/q1).
- The movement comes on the back of a ↑1,7% increase in Q1, with seven of the eleven industries decreasing – the most significant being Manufacturing at ↓0,7% (q/q) – in the first quarter.
- For trade, imports accelerated in Q2, as exports cooled off – Imports of goods and services increased by ↑5,6% (q/q), primarily driven by increases in chemical and mineral products. Exports of goods and services, on the other hand, contributed negatively to growth in expenditure on GDP and increased by only ↑0,3% (q/q).
Global shipping industry:
- According to CTS’s latest container throughput volumes2 , global volumes are down by ↓2,1% (m/m), which confirms the exceedingly disrupted nature of the maritime and supply chain environment recently.
- Despite the monthly reduction in July, container volumes (import and export) have increased annually by ↑0,6% (y/y).
- Regionally, for Sub-Saharan Africa, container throughput volume increased in July, with both imports and exports growing. For July, import volumes are up by ↑4,9% (m/m), with exports increasing by ↑3,1% (m/m).
- Moreover, annual throughputs indicate even better returns, as imports are ↑5,5% (y/y), with exports increasing by a substantial ↑25,2% (m/m), which indicates how the region took longer to get the economy up and running again after the devastating effects of the pandemic.
- Incidentally, when comparing these figures from TNPA figures for July3 , South Africa accounts for slightly more than a quarter of the imports (27,3%) and 56% of the exports, showing our regional dominance.
- After achieving an average operating margin of ↓1,7% for the eleven years between 2009 (including) and 2019, global carrier profits have shot up to stratospheric levels since the pandemic.
- On average, the industry reported an operating margin of ↑56,3% for Q2, slightly down from the record ↑57,4% for the year’s first three months.
- For now, though, it appears as if the extraordinary financial boom is over, as global container freight spot rates continued to decline rapidly.
- According to Drewry’s “World Container Index”, the rate decreased by a substantial ↓5% (or $283) – to $5 379 per 40-ft container this week4 , which is a massive ↓47% lower than this time last year when rates reached their peak.
- Spot rates on the Southern African trades are also coming down – but not quite at the rapid pace as the global markets.
- Further developments of note included (1) typhoon “Hinnamor” disrupting service in China and South Korea, (2) multi-purpose charter sector decline, (3) LNG, Crude, and LPG shipping sectors continuing to be resilient, (4) UK labour strikes continue and might intensify, and (5) global reefer equipment shortages remain.
Local air industry:
- South Africa’s international air cargo volume increased this week (↑2%), as did the domestic cargo (↑10%) compared with the previous week.
- Operationally, the industry celebrated some success as, after months and months’ worth of deliberations, ACSA has finally accepted the push from the industry to integrate the IVS system with ACSA’s Gatebook system.
- The daily average volume of air cargo handled at ORTIA the previous week amounted to 457 510 kg inbound and 278 407 kg outbound, resulting in an average of 735 917 kg per day or ~97% compared with September 2021. Also, the level is currently at ~103% compared with the same period in 2020.
- The average domestic air cargo moved last week was ~66 249 kg per day, which is ↑10% compared
with the previous week and ~98% compared to August 2021.
International air industry:
- IATA shows that the headline seasonally adjusted cargo tonne-kilometres (CTKs) faltered in July with a ↓2,3% (m/m) contraction compared with June, which was flat from May. Compared with a year ago, July CTKs were ↓9,7% lower, a weakening from the ↓6,7% decline in June.
- Available cargo tonne-kilometres (ACTKs) increased by ↑3,6% (y/y), putting downward pressure on load factors in July.
- Although air cargo capacity increased in all regions, available space was down in Africa (↓3,6%, y/y), partly reflecting the change in belly capacity as the number of passenger flights continues to recover.
- With capacity outstripping demand, the industry-wide cargo load factor eased further below 50%. However, June and July cargo load factors have not been seen since early 2020. At 47.2% in July, the industry CLF was ↓6,9% lower than its level of a year ago.