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Covid-19: Cargo Movement Update – 02 September 2022

PUBLISHER: BUSA

This update – the 103rd 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 again dominated by adverse weather conditions (especially in the form of strong winds), equipment breakdowns, congestion, and system downtime. Consequently, throughput was very low. The port of Durban suffered the most from the poor weather, and extensive hours were lost due to strong winds, which added to the backlogs and congestion already experienced. In Cape Town, NAVIS system downtime was reported on two separate occasions during the week for an approximate period exceeding one hour, while inaccurate vessel size calculations delayed the MOL Proficiency for approximately 16 hours. Furthermore, TPT continued to implement the four-hour review period for slot allocations this week while the incidence of cancelled and wasted slots remained high.

Key Notes:

  • An average of ~6 183 containers was handled per day, with ~9 626 containers projected for next week.
  • Rail cargo handled out of Durban amounted to 2 587 containers, ↑36% compared to last week.
  • This week, cross-border queue times ↑0,6 hours, with transit times ↓0,6 hours, SA borders ~17 hours.
  • The “WCI” decreased for the 27th consecutive week, with spot rates down by ↑5% to $5 662 per 40-ft.
  • Global container trade growth will ↓2% (2022) and ↓3% (2023) before recovering by ↑2,5% in 2024.
  • The non-cellular fleet grew ↑21,6% (y/y) but only accounted for ~1,1% of the container market.
  • Air cargo freight rates in August shows rates are up ↑0,5% (m/m), ↑11,2% (y/y), and ↑128% vs. 2019.

Port operations – General:

  • Port operations this past week were again dominated by adverse weather conditions (especially in the form of strong winds), equipment breakdowns, congestion, and system downtime. Consequently, throughput was very low.
  • The port of Durban suffered the most from the poor weather, and extensive hours were lost due to strong winds, which added to the backlogs and congestion already experienced.
  • In Cape Town, NAVIS system downtime was reported on two separate occasions during the week for an approximate period exceeding one hour, while inaccurate vessel size calculations delayed the MOL Proficiency for approximately 16 hours.
  • Furthermore, TPT continued to implement the four-hour review period for slot allocations this week while the incidence of cancelled and wasted slots remained high.

Port operations – Performance metrics:

  • CTCT stack occupancy for GP containers was 33%, reefers 47%, and empties 48%.
  • CTCT handled ~1 038 containers per day, with an increased average of ~1 785 projected this week.
  • DCT Pier 1: Stack occupancy was 58% for GP containers and 78% for reefers with 1 596 imports on hand, 765 reefers and 100 unassigned units.
  • DCT Pier 2: Stack occupancy was 67% for GP containers and 100% for reefers highlighting the backlogs created by the weather conditions.
  • DCT Pier 1 handled ~1 231 containers per day, with an increased average of ~1 599 this week.
  • DCT Pier 2 handled ~2 476 containers per day, with an increased average of ~4 231 this week.
  • Average TTT for DCT this week: 78 minutes, with a staging time of 80 minutes.
  • In the last week (27 August to 2 September), rail cargo handled out of Durban was reported at 2 587 containers, up by ↑36% from the previous week’s 1 904 containers.

Local and cross-border road:

  • In the road freight sector, cross-border transit times for our borders averaged 19 hours (↑12% w/w) this week, as delays continued at several SADC border posts, notably Dedza, Kopfontein, Kasumbalesa, Lebombo, and Trans Kalahari.
  • Apart from regional cross-border delays, additional developments of note included (1) protests en route to Skilpadshek, (2) delays at Beitbridge and Asycuda downtime, and (3) new ZIMRA Commissioner General.
  • For the SADC region, cross-border transit times hovered around ~18,2 hours (down by ~0,5 hours from the ~18,7 hours recorded in the previous report).
  • This week, Heavy Goods Vehicles (HGV) per day at the following borders averaged:
    • Beitbridge: 845
    • Groblersbrug/Martins Drift: 362
    • Kopfontein: 100
    • Lebombo: 1 623

SARS Merchandise stats – July:

  • Monthly exports decreased from June (↓4,1%, m/m), as did imports (↓5,0%, m/m).
  • For the YTD figures, the preliminary trade balance of R156,71 billion is a deterioration from the R285,13 billion positive trade balance for the comparable period in 2021.
  • This change is primarily attributed to a substantial increase in YTD imports, growing at ↑41,6% (y/y). Exports, in turn, also rose, coming in at ↑24,3% (y/y).
  • Regionally, trade with BELN countries for July resulted in a trade surplus of R10,55 billion.
  • Exports to our neighbouring countries increased by ↑1,7% (m/m) between June and July, with imports decreasing – by ↓7,9% (m/m) – over the same period.
  • Trade balance with BELN countries – from R56,92 billion in 2021 to R67,65 billion trade balance surplus for 2022.

Global shipping industry:

  • The latest RWI/ISL figures showed that global port throughput remained stable at 126,2 points in July (no change, with the same number recorded in June).
  • Analysis from HSBC predicts that capacity will increase by ↑6,2% in 2022, ↑6,5% in 2023 and ↑8% in 2024.
  • Freight rates are plunging (now ↓43% lower than this time last year when rates were trading at their peak) further as carriers’ outlook appears less optimistic due to a mismatch between container growth and the supply of new vessels.
  • Further developments of note included (1) North European port congestion eases, (2) COVID lockdowns return to key Chinese port cities, and (3) Maersk is selling its Russian business.

Local air industry:

  • South Africa’s international air cargo volume increased somewhat this week (↑6%) but remains below trend lines due to a drop in import demand. Domestic cargo also increased – by ↑4% – compared with the previous week.
  • Domestic cargo increased by ↑18% compared with the previous week but remains down compared to last August (~93%). The average domestic air cargo moved last week was ~57 847 kg per day.
    • The daily average volume of air cargo handled at ORTIA the previous week amounted to 488 184 kg inbound and 253 959 kg outbound, resulting in an average of 724 143 kg per day or ~89% compared with August 2021. Also, the level is currently at ~161% compared with the same period in 2020.
    • The average domestic air cargo moved last week was ~60 123 kg per day, which is ↑4% compared with the previous week and ~97% compared to August 2021.

International air industry:

  • Internationally, weakening air cargo demand amid continued record inventory levels seemingly drives rates further down, albeit gradually. Further developments of note included (1) pilot strikes in Germany, (2) ITA Airways take-over by Delta and AF-KLM, and (3) more ventures by ocean carriers into the air space.

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