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Executive Summary

This update – the 38th of its kind – contains a consolidated overview of the South African supply chain and the current state of international trade. There has been a noticeable increase in newly reported COVID-19 infections in South Africa, averaging approximately 2 126 infections per day this week (changing by ↑37% from last week’s average of 1 548). The increase predicts that the widely anticipated third wave is now upon us. The total number of cases recorded now stands at more than 1,7 million[5], with a death toll of 55 012 (up by 392). South Africa slipped to 21st place globally, as more than 161 million cases have now been recorded worldwide.

A total of 1,41 billion vaccines have now been administered on the vaccination front as global rollouts continue to accelerate. Consequently, approximately ~18,1%[6] of the world’s population has now been given at least one vaccine shot. According to the same source, South Africa now stands at ~910 000 vaccine jabs. Despite a significant increase last week (more than half a million), it is clear that our over-optimistic vaccination goals will not be reached. For South Africa to vaccinate two-thirds of our population by the end of February next year, we need to vaccinate almost 200 000 people per day. This unlikely target is more than twice as fast as the fastest country to date, Israel, achieved thus far. With our widely dispersed population and poor infrastructure, our chances of getting anywhere near even the Israeli rate must be assessed as zero.

Our local maritime industry experienced a strong increase in the number of containers handled this week despite some ongoing hindrances in the supply chain. The industry has welcomed the increased volume. Indeed, the positive news is further extended by two significant events for our fruit exports. Firstly, the record number of empty containers delivered to NCT for upcoming citrus exports. Secondly, the news that the citrus industry welcomed the world’s largest reefer vessel – the “Cool Eagle” – to our shores this week. Despite these small victories, it is evident that South Africa lags far behind the rest of the world in terms of port performance. Together with external contributors from the IHS Markit, the World Bank released the “Container Port Performance Index 2020” last week, with South African ports ranking at the very foot of the standings. Lastly, for the maritime industry, the much-needed easing of freight rates is seemingly further in the future, as the “WCI” again shot through the roof, with the composite index increasing by 4,7% to $5 472 this week.

This week, both international (↑5%) and domestic airfreight (↑22%) had a stellar week, as we are starting to consistently see the industry handling pre-pandemic cargo volumes week-in, week-out. For the global industry, IATA showed that cargo is now around one-third of the typical airline business, whereas, in the past, air cargo was marginal at 10-15% revenues. For the international cargo market, both the yields (↑10%) and the load factor (↑50%) have increased significantly due to the extraordinary market conditions created by the imposition of stringent regulations caused by the pandemic. As borders remain closed and personal travel is heavily restricted, air cargo will continue to save airlines’ saving grace.

This week again saw some minor operational improvements from both a border and a corridor perspective in terms of regional overland trade. The week’s most significant change was reducing cross-border transit times that hampered trade on the Dar corridor. Nevertheless, the SADC Region COVID-19 testing protocols remain cumbersome and unwieldy, with the requirement of 72-hour validity on entry to a country creating a massive challenge for transporters. This challenge is particularly evident with Zambia and Malawi, where it is impossible to get tested in South Africa and arrive at a Zambian border within 72 hours.

In summary, as South Africa gears itself for the third wave of the virus, the extended industry hopes that the small gains made over the past few months on most accounts can be consolidated to ensure the economic effects of the pandemic will be minimised as far as possible. As is evident in several international publications this week, South Africa is still far from its desired global position in supply chain performance.

[5] Johns Hopkins, Coronavirus Resource Centre. Coronavirus JJHU.

[6] Our World in Data, Coronavirus (Covid-19) Vaccinations. Our World in Data

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