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This update – the 101st 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 equipment breakdowns, congestion, and inclement weather conditions, causing delays. Internationally, the shipping industry continues to battle current conditions of elevated input costs, reduced efficiency, and ongoing capacity constraints. However, as we have witnessed over the last six months, these constraints and accompanying prices continue to ease, notwithstanding further shocks. As with dry containerised goods, the same is true for refrigerated goods, as reefer freight rates are expected to soften this year further, but at a more gradual pace than dry box pricing, as reefer rate trends continue to lag those of general cargo.

Port congestion remains an issue worldwide, as major hubs on both sides of the Atlantic remain overcrowded. Moreover, strikes and industrial action in Northern Europe are exacerbating the problems, as ripple effects are experienced throughout the globe, including in South Africa. Fortunately, the softening of rates seems set to continue, as average vessel utilisation on the major head-haul trades continues to be below the threshold, which fuelled the record rate peaks over the past 1½ years. Further developments of note included (1) a ‘two-tier’ market surfacing as the gap between mega and smaller box lines widens, and (2) tax contributions from shipping lines questioned.

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