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ZA Update: Positive signs for South African business as trade links strengthen and volumes increase

Western Cape’s economic growth goes from strength to strength with the latest Turkish trade deal whilst volumes in East London see a boom. However, protests continue to disrupt South Africa’s N3 trade artery.

Following our most recent South Africa update, please see the latest news affecting ZA supply chains below:

Western Cape's economy grows as Türkiye partnership lands

Following the introduction of Turkish Airlines’ Boeing 787-9 Dreamliner flights to Cape Town, the significant growth opportunity for belly cargo air freight landed a high-profile visit from some of Türkiye's most influential heads of commerce and business people.

Being the first African city to receive the Dreamliner, an initial meeting between Boeing’s VP of Sales for Africa, influential businesses and figures from Cape Town, and the Izmir Chamber of Commerce was arranged to discuss both the future of tourism and potential investment opportunities both for and in the Western Cape.

Izmir is not far behind Istanbul in its port output, with textiles, automotive goods, machinery and metals all major export commodities for the region.

Turkish Airlines extends flights to Durban as King Shaka becomes 2nd fastest recovering African airport

Turkish Airlines has extended its Istanbul-Johannesburg flight routing to include Durban’s King Shaka International Airport, with the new route currently running on Thursdays and Saturdays. The airline also has plans to monitor passenger uptake and if successful will be increasing to 4 weekly flights.

The reintroduction of the route signals a recovery from the effects of COVID-19 and a prosperous business and touristic relationship between Istanbul and Durban, with the King Shaka airport reaching almost 72% of pre-COVID year to date passenger levels whilst seeing a 23% uplift in air cargo volumes over the last 12 months, a direct effect of the Johannesburg-Durban-Istanbul route and increased capacity of passenger flights.

Other airlines have also begun reopening routes into Durban, with Qatar Airways flying 4 (soon to be 5) direct weekly flights to Dubai and the Airlink flight between Durban and Harare, Zimbabwe also opening up exciting opportunities for the KwaZulu Natal region.

Automotive production booms as East London sees increased volume moving through its ports

A recent boom has seen East London’s trade increase vastly over recent months with a 67% rise seen at the end of May and the movement of 5,131 TEU, 2,073 TEU above predicted levels. As the port serves the automotive industry predominantly, the surge in traffic is a positive sign for the stuttering industry which has taken a hit during COVID with parts issues. 

A 17% rise in fully built units (completed cars) has also helped to boost the vessel volume calling at East London to 11 per month in May from 4 in January, 2022. Efficiency at the port is also high, with 100% equipment availability and good labour reliability, beating KPI targets and averaging 183 units per hour vs the original 160 target.

N3 Truck protests - ZA transport minister meets with logistics sector to solve blockades

Following the continued protests and attacks on South Africa’s main freight routes, including the N3 the Transport Minister, Fikile Mbalula, met with transport associations and government officials to search for a resolution to the current situation.

Over the past week, truck blockades have taken place and closed the N3 in the Free State and KawZulu Natal following a previous protest near Warden earlier in the week. The All Truck Drivers Forum of South Africa took responsibility for the earlier blockade in Warden however it distanced itself from the latter action which saw suspects arrested on various obstruction and interference charges.

At this time no amicable resolution has been reached.

Backlogs at Durban port following road closure

After effects of Durban’s floods are still being felt with infrastructure damage and repairs continuing to disrupt the area around the port. Heavy-haul cargo over 5.1m high is currently unable to pass the ‘B-Route’ bridge crossing the N2 after a large hole opened up as a result of April’s flooding. An alternative route at Durban’s old airport was deemed acceptable following a safety assessment however, on June 2nd an incident involving a transport clipping an airport building meant that the alternative route was no longer able to be used.

Many heavy-haul goods are now unable to leave the port as no viable alternative route is available, prompting some transporters to abandon goods at the terminal to avoid standing costs which for some are running into the thousands. Another issue is that the cargo cannot be rerouted to other ports in the area due to the poor road infrastructure.

In the latest meeting between transports and the Department of Transport, on June 20th, it was stated that abnormal load operators could “expect to see a resolution soon”.

 

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