Freight & Logistics Update 15 November 2023

Dear Clients and Partners,

Below find this week’s Freight & Logistics Update. Please don’t hesitate to get in touch with any queries or questions you may have.

SOUTH AFRICA

Port Congestion Surcharge: Many shipping lines have or will be introducing congestion surcharges as a result of the heavy congestion all South Africa’s commercial sea ports face.

DURBAN

Port berthing delays continues to be experienced due to high levels of congestion. The port has reported strong winds during the week.

Pier 1 : 10 days – Poor STS and RTG reliability and availability. Recovery expected in 3-4 weeks.
Pier 2 : upto 18 days – STS Breakdown and straddle carriers reliability and availability remain the key challenge to productivity. Recovery estimated in 8-12 weeks.
Durban Point : 3 days

CAPE TOWN

Port berthing delays continues to be experienced. The port has reported strong winds during the week. High volumes of cargo and traffic experienced at Cape Town terminals.

CTCT : 7-14 days – Productivity remains below the expected rates. TNPA dredging has been completed and 3 berth operations have resumed. Recovery expected in 2-3 weeks.
MPT : 0-2 days

PORT ELIZABETH

Port berthing delays continues to be experienced and has increased from week 42. The port has reported strong winds during the week.

PECT : 2 days – STS Crane maintenance continues. Recovery expected in 2 weeks.
NCT : 7 days – 3 berth operation implement. Recovery expected in 3 weeks.

AFRICA & INDIAN OCEAN ISLANDS

MAURITIUS

Berthing delays of 2 days experienced at Port Louis.

ANGOLA

Berthing delay of 8 days experienced at Luanda port.

GHANA

Berthing delays of 2 days experienced at Tema port. Congestion experienced at the port.

NIGERIA

Berthing delays of 4 days experienced at Apapa port.

TANZANIA

Berthing delays of 9 days experienced at Dar es Salaam port. Slight reduced draft at berths 8-11 (10m)

KENYA

Berthing delay of 1 day experienced at Mombasa port.

MOZAMBIQUE

Berthing delays of 8 days experienced at Maputo port.

NAMIBIA

Berthing delays of 5 days experienced at Walvis Bay port.

NORTH AMERICA

USA

USA ports are still facing huge challenges which are causing delays of 3-4 weeks.

Terminals Updates:

New York/New Jersey – Vessel waiting time is up to 1 day. The maintenance for Crane 6, originally scheduled to begin on October 1, 2023, has been deferred until further notice to minimize congestion.
Norfolk – Vessel waiting time is up to 2 days.
Savannah – Vessel waiting time is up to 6 days. Two new cranes are currently being commissioned on berth 2, while four of the oldest cranes on the same berth are being demolished. As a result, berth 2’s capacity to handle vessels will be limited for several months.
Charleston – Vessel waiting time is up to 1 day.
Miami/Port Everglades – Vessel waiting time is up to 3 days.
Houston – Vessel waiting time is up to 2 days. Due to vessel bunching the yard is facing congestion impacting the discharge productivity and extending port stays
Los Angeles/ Long Beach – Vessel waiting time is up to 4 days.
Seattle – Vessel waiting time is up to 4 days. Terminal 18 will be closed on November 10 ,13 and 23, 2023, Husky Terminal will be closed on November 13, 2023.
Oakland – Vessel waiting time is up to 3 days.

Rail Updates:

BNSF – Rail ramp is currently experiencing congestion in Chicago, Columbus, and Los Angeles. There are delays in picking-up and delivering containers at these locations.
UP/LAX/LGB – Rail ramp is currently experiencing congestion in Los Angeles. There are delays in picking-up and delivering containers at this location.

Equipment Availability:

Due to persistent congestion nationwide, chassis shortages continue to be observed resulting in potential delays for pick-up and delivery.

CANADA

Montreal

Berthing delays of 2 days experienced at this port. Bad weather on the North Atlantic is impacting vessel schedules. Ships are now arriving in Montreal with minimal delays however, it is expected to continue as fall and winter intensify.

Toronto

Berthing delays of 4 days experienced at this port.

Vancouver

Berthing delays of 4 days experienced at this port.

LATIN AMERICA

BRAZIL

Still facing huge challenges with delays of 3-4 weeks, due to allocated space out of Santos, the main port, as well as limited sailings, (bi-weekly).
Berthing delays of 2 days experienced at Santos port.

PANAMA

Nationwide strikes lasting four days, resulting in blockades, vandalism, and unsafe conditions affecting terminal operations.

NORTH WEST CONTINENT, UNITED KINGDOM, MEDITERRANEAN

BELGIUM

Berthing delays of 2 days experienced at Antwerp port. AGW: Antwerp Gateways Terminal received 3 additional Gantries which are fully operational.

GERMANY

Berthing delays of 2 days experienced at Hamburg port and 1 day at Bremerhaven port.
Container Terminal Altenwerder (CTA): Terminal with ongoing rail maintenance reducing the berth capacity from 3 to 2 however, terminal still with strong operations.
Container Terminal Burchardkai (CTB): Berth 1+2 still closed for operations due to construction site for AGV operations berth only usable as layby. Construction will continue until December.

UNITED KINGDOM

Berthing delays of 2 days experienced at London Gateway port.

SPAIN

Berthing delays of 2 days experienced at Barcelona port.

ITALY

Berthing delays of 3 days experienced at La Spezia port and 4 days at Genova port. November 17th, 2023 (Full Day) Several main Union Associations have announced a national strike scheduled to last the entire day. It is essential to be aware that this industrial action could potentially affect gate and yard activities across all Italian ports.

NETHERLANDS

Berthing delays of 3 days experienced at Rotterdam port.

FRANCE

Berthing delays of 2 days experienced at Le Havre and 3 days Fos-sur-Mer port. Last week’s storm Ciaran led to operational downtime in all terminals in Le Havre.
A 24 hour strike has been announced for the 23^rd November at Le Havre, Rouen & Fos sur Mer.

TURKEY

Berthing delay of 1 day experienced at Istanbul port.

INDIAN SUB-CONTINENT & MIDDLE EAST

INDIA

Berthing delay of 1 day experienced at Nhava Sheva, Mundra and Chennai ports.

SRI LANKA

Berthing delay of 1 day experienced at Colombo port.

UNITED ARAB EMIRATES

Berthing delay of 1 day experienced at Jebel Ali port.

ASIA PACIFIC (Including Oceania)

Most ports in the Far East are expected to be affected by severe weather conditions due to typhoon season.
Due to peak season all main ports are affected by equipment shortages, please consider multiple options when shipping.
LCL Hazardous commodity acceptance out of China remains a challenge as approval for loading remains subject to carriers’ stringent acceptance protocol. Other options are available on request, contact your Inter-Sped Representative for further assistance.

HONG KONG

Berthing delays of 1 day experienced at this port.

TAIWAN

No berthing delay experienced at Kaohsiung port.

NANSHA

Berthing delay of 1 day experienced at this port.

SHANGHAI / NINGBO

Berthing delay of 1 day experienced at Shanghai and Ningbo ports.

QINGDAO

Berthing delays of 2 days experienced at this port.

XIAMEN

Berthing delays of 2 days experienced at this port.

SHEKOU / YANTIAN

Berthing delay of 1 day experienced at Shekou and Yantian ports.

XINGANG

Berthing delay of 1 day experienced at this port.

KOREA

Berthing delay of 1 day experienced at Busan port.

VIETNAM

Berthing delay of 1 day experienced at Ho Chi Minh and Hai Phong ports.

MALAYSIA

Berthing delay of 1 day experienced at Port Kelang.

THAILAND

Berthing delay of 1 day experienced at Bangkok port.

SINGAPORE

Berthing delay of 1 day being experienced.
3-4 weeks delays due to blank sailings

NEWS ARTICLES

Bad weather, breakdowns, and cable theft impact SA’s ports

Date: 7 th November 2023

South Africa’s commercial ports handled an average of 6 710 containers per day last week compared to the previous week’s 7 836, representing a significant decrease of 14.36% in the daily average, a Cargo Movement Update has found.

An executive summary of the update compiled by Business Unity SA and the South African

Association of Freight Forwarders, said: “Port operations in the last week were characterised primarily by adverse weather conditions, equipment breakdowns and shortages, and internal congestion.”

In Cape Town more than 24 operating hours were lost due to strong wind. At the Port of Durban, where congestion and nagging equipment failure have led to severe congestion, more than 60 000 TEUs were stuck at outer anchorage on October 31. As has been indicated by various stakeholders in the recent past, the speed of equipment repair and parts availability remains a serious concern in Durban. As a result, vessels waiting for weeks to offload at the port has become the norm.

Cargo processing was also exacerbated by intermittent cable theft on the rail network over the previous weekend, causing some delays, the update said.

Busa and Saaff remarked that pressure is mounting on the state-owned logistics utility, Transnet, to improve performance, especially given comments made by finance minister Enoch Godongwana in last week’s Medium-Term Budget Policy Statement. “The Minister highlighted that the underperformance of rail in South Africa is estimated to have cost up to 5% of GDP and caused significant losses in the minerals sector alone.”

Referring to the Freight Logistics Roadmap, a presidency initiative to place the country on a trajectory towards improved multi-modal cargo movement, Busa and Saaff said: “The Treasury is working with Transnet to ensure it meets its debt obligations but has stated that Transnet won’t receive bailouts until the government is satisfied that the Roadmap is being adhered to.

“However, as often mentioned, Transnet – although a critical player – is not solely accountable for the smooth functioning of the extended logistics industry. This responsibility lies on all users, operators, and logistics providers in the country.

In conclusion, the update said: “South Africa must get its trade, transport, and logistics network in order, as it is directly involved in 60% of the country’s economy.” [1]

US commits to strengthening Africa trade ties

Date: 6th November 2023

“United States Trade Representative, Katherine Tai, reiterated her country’s commitment to

strengthening the US-Africa trade and investment relationship to deliver real opportunities across the continent. Tai was delivering remarks during the closing ceremony of the 20th African Growth and Opportunity Act (Agoa) Forum held in Johannesburg.

She told delegates that she would summarise the interactions that had been held over the last three days with the word “commitment”. “Commitment to strengthen the US-African trade and investment relationship. Commitment to craft a more resilient, sustainable, and inclusive tomorrow across the continent. Commitment to partner with one another to make Agoa stronger and more effective,” she said.

The three-day forum explored the intersection of trade and competition policy and what that means for a fairer economy in Africa and elsewhere. It focused on how small businesses and women-owned enterprises could be equipped and empowered to succeed and thrive.

Agoa is a unilateral trade preference scheme that provides qualifying sub-Saharan African countries with duty-free, quota-free access to the United States market. It remains the cornerstone of the US’s commercial relations with sub-Saharan Africa.

Tai also said Agoa was the cornerstone of the US’s economic partnership with Africa. “Let us not forget the real impact Agoa has had on real lives, real people: the woman entrepreneur seeking to expand her macadamia nut processing business; the small business owner making apparel and handicrafts, and the countless students and youth, waiting to make their mark …“So, when we say that Agoa is the cornerstone of our economic partnership, we do not mean it in the abstract. It has been a bedrock to improve the livelihoods of so many people across Africa and it has the potential to do so much more. But we can make it even better,” she said.

“As we discussed during the session on ‘What’s Next in our US-Africa Trade Relations’, we must also explore additional areas of cooperation and other trade tools to complement our Agoa relationship. “This includes collaborating on AfCFTA (African Continental Free Trade Area) implementation and better using the multilateral trading system to benefit more people” she said. [2]

Arab-African Summit postponed because of Middle East conflict

Date: 9th November 2023

The war between Israel and Hamas in Gaza has necessitated the rescheduling of the fifth ArabAfrican Summit originally scheduled for Saturday, November 11, as confirmed by Saudi Arabia’s Ministry of Foreign Affairs.

The ministry explained that this decision was reached after consultations between the League of Arab States and the African Union. It was made to ensure that the political developments in the region would not impact the Arab-African partnership.

The Organization of Islamic Cooperation has also announced that an extraordinary summit will be convened on November 12 in Riyadh to address the crisis in Gaza. [3]

The EU ETS And Shipping: A Bumpy Ride Ahead?

Date: 8th November 2023

The EU emissions trading scheme (the EU ETS) is expanding to include the shipping industry, with 2024, the first year in which vessel emissions will be included with in the scope of the EU ETS, just around the corner, shipowners and operators need to assess how the scheme will impact their business.

Shipping companies whose vessels call at EU ports will be liable for their vessel emissions from 1 January 2024 and surrender of the requisite number of emissions will be due in September 2025. Consequently, decisions on this issue cannot wait – contractual arrangements, the setting up of maritime operators’ accounts with Member State registries and development of a strategy for acquiring allowances to cover periods of off hire and down time, perhaps through a separate trading account, must be put in place urgently. However, this is challenging as such decisions have to be made against a background of regulatory uncertainty at both an EU and Member State level.

There are no ‘one size fits all’ solutions to these complex issues: owners, charterers and operators will need to consider their own position on these matters and how best to deal with them. The value of the allowances required to be surrendered will increase

year on year from 40% of recorded emissions for the year 2024 rising to 100% for the year 2026. These will be significant sums. Crucially, operators and charterers cannot delay their decision making.

For full consideration and explanation of the challenges visit the link [4]

US commits $553m to develop Sri Lankan terminal

Date: 8th November 2023

On the island of Sri Lanka, strategically located along one of the most important global trade arteries, the world’s top two economies are vying for influence.

After years of China spending hundreds of millions of dollars to develop port infrastructure in the South Asian nation, the US has entered the fray with the US International Development Finance Corporation (DFC) today announcing it has committed $553m to support the development of a deepwater shipping container terminal in the Port of Colombo in partnership with John Keells Holdings and Adani Ports & Special Economic Zones Limited (APSEZ).

The Chinese already have an extensive footprint across the island, including terminals in Colombo and Hambantota. US ambassador to Sri Lanka Julie Chung said, “This financing is symbolic of the United States’ long-standing commitment to the development and well-being of the people of Sri Lanka.

Sri Lanka regaining its economic footing will further our shared vision for a free and prosperous Indo-Pacific. [5]

Cyber Attack Hits Australian Ports

Date: 2 nd November 2023

The Australian government said on Saturday that it was coordinating a response to a cybersecurity incident that forced ports operator DP World Australia to suspend operations at ports in several states.

A DP World Australia spokesperson told Reuters on Saturday that operations at impacted ports were not yet restored. A statement said the company was “working around the clock to restore normal operations safely” after the breach was detected late on Friday.

Australia’s National Cyber Security Coordinator, appointed earlier this year in response to several major data breaches, was managing the official response to the incident.

DP World Australia, part of Dubai’s state-owned ports giant DP World, operates four container terminals in Australia in Melbourne, Sydney, Brisbane and Western Australia’s Fremantle. According to DP World, in the Asia Pacific region it employs more than 7,000 people and has ports and terminals in 18 locations. [6]

A wind of change as reliance on China eases, with G2G the next challenge

Date: 9th November 2023

A drive to diversify sourcing – and a booming worldwide e-commerce sector – is set to shake up globalisation and see new tradelanes develop.

“It has been ‘China to Global’ (C2G) – but the next challenge is Global to Global (G2G),” explained Yossi Shoukroun, CEO of Challenge Group. “E-commerce is facing changes; production/origin is moving to South-east Asia, South and North Africa, India and Bangladesh; and China is starting to consume as well, buying from overseas.

“This means we have to be ready not just for e-commerce out of China, but from the EU, from the US. And other continents too are starting – Africa and South America. We need to adapt. “I don’t know if this will mean more balanced trade, but there will be changes. We will see a global answer to markets opening, but we will still see Asia remain dominant in exports,” he said.

Soufiane Daher, an analyst for McKinsey’s air cargo division, told delegates at Tiaca’s event in Brussels this week that while ‘China+1’ was a definite trend, “it won’t happen overnight”. Mr Daher expects 15% to 20% of global trade to shift because of “China + 1” – companies looking to reinforce their supply chains by diversifying production locations. “There are shifts happening, but maybe not near-shoring… India will come at the top of the list, as well as Vietnam, the rest of Asia, Poland and Turkey,” he predicted.

This booming ex-China e-commerce market has cast doubt on whether companies are ready to decouple with the hub of what secretary general of ICAO Juan Carlos Salazar described as a “highly dynamic and extremely promising sector”.

Shifting production to other countries will also bring infrastructure challenges, as the “high-end industries that rely on airfreight are hard to move”, explained Mr Daher, but added: “It may not have a negative impact on airfreight, but moving production means a shift in trade flows of both outbound finished goods and the inbound semi-manufactured goods.

“China is a top three exporter for 80% of global airfreight,” he said, adding: “It has taken decades to get there, so we won’t see a shift overnight.”

Global strategist at Rabobank Michael Every added, on the podcast, that it was “far too early to think the bonds forged with China over many years are close to breaking, but the political winds are undoubtedly changing”. [7]

Why shippers pick air or ocean – and it’s not always on price

Date: 9th November 2023

Shippers have a particular set of criteria which determines whether to use sea or air; and price is not the key driver usually assumed.

According to Niall van de Wouw, head of airfreight for Xeneta, “Airfreight was around 10 times more expensive than sea freight in 2019, but it went to 21 times the price. That won’t impact the need shippers have for airfreight. It will impact budgets, but it won’t influence their decision.”

Instead, he argued, shippers had other considerations. He pointed to Apple’s drive to cut emissions by using ocean instead of air, explaining: “Apple feels the need to reduce the impact of transport. Shippers want to change and reduce the impact on the environment.”

Something else that might impact the reliability on the oceans is the ending of the Consortium Block Exemption Rule (CBER) by the European Commission, which will see shipping lines have to rethink alliances. “There is a lot of uncertainty about what the market will look like from April. Some niche markets could be under-served, which could spark some airfreight demand. This could impact airfreight in 2024,” he said.[8]

SOURCES & REFERENCES

SACO CFR

[[1] https://www.freightnews.co.za/article/bad-weather-breakdowns-and-cable-theft-impact-sas-ports

[2] https://www.freightnews.co.za/article/us-commits-strengthening-africa-trade-ties

[3] https://www.freightnews.co.za/article/arab-african-summit-postponed-because-middle-east-conflict

[4] https://www.hellenicshippingnews.com/the-eu-ets-and-shipping-a-bumpy-ride-ahead/

[5] https://splash247.com/us-commits-553m-to-develop-sri-lankan-terminal/

[6] https://gcaptain.com/cyber-attack-hits-australian-ports/

[7] https://theloadstar.com/a-wind-of-change-as-reliance-on-china-eases-with-g2g-the-next-challenge/

[8] https://theloadstar.com/why-shippers-pick-air-or-ocean-and-its-not-always-on-price/