ZA Update: South Africa invests in anti-piracy measures as more floods disrupt Durban terminals

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

Fuel price spike will have an impact on South Africa’s road freight sector

Fuel price rises across South Africa have led to untenable conditions for many smaller transport operators in the country. With a fuel price increase of R3.20 expected in the first week of June, the road freight logistics sector is beginning to feel the strain, leaving operators facing unsustainable conditions due to the steep rise. 

It is not just fuel rises leading to concern for hauliers. The fuel taxation ‘relief’ offered by the government is also set to cease at the end of May, ahead of the next phase of price increases, which is likely to cause another “perfect storm” for the sector locally.

There is already very little leeway for smaller businesses in the market, thanks to a constant upwards trends in operating costs and the reluctance to pass too much cost onto customers making the absorption of costs unviable and prices uncompetitive.

Some potential solution to the ongoing fuel crisis have been stated:

• An agreement between African states producing oil (or refined products) to sell at a far lower rate to African countries in the spirit of the Africa Continental Free Trade Area (AfCFTA) to ensure African economies do not collapse
• Concentration by Sasol to produce far more fuel
• Development and growth of the synthetic fuels industry in South Africa - from all possible sources
• Development of electric transportation devices and supply
  
  

ZA Navy invests in new anti-piracy vessels to benefit ocean freight

Boosting the ocean freight industry, the South African Navy has invested in three state-of-the-art MMIPVs (Multi Mission Inshore Patrol Vessels) in an attempt to combat piracy and smuggling operations.

In a ceremony at the Simon’s Town Naval Base, the culmination of four years of work by Damen Shipyards Cape Town led to the delivery of the first of the three 62-metre long rapid response vessels.

Not only do the versatile vessels offer increased support and security to ships in South Africa’s waters, they also show an investment into the country’s sustainable development, with the patented design reducing emissions and fuel consumption.

Positive economic news for South Africa as the country’s credit rating is upgraded

South Africa’s sovereign rating has been upgraded from Stable to Positive in the latest positive news for the region’s economy.

The change in perception has become apparent following a combination of South Africa’s improved fiscal position and the expectation that the country’s accounts will remain in surplus for a third consecutive year. A sub-investment rating is still being held against South Africa’s debts, however, it is unlikely that any downgrades will occur.

Although seemingly good news, the credit upgrade comes at a time when South Africa’s industry is seeing increased load-shedding and increased damage to its infrastructure from recent flooding, whilst the Rand/Dollar exchange rate is deteriorating, leading experts to question whether the upgrade is a positive move for South African businesses.

Further flooding in Durban leads to port blockages

Heavy rain over the weekend has caused further flooding around Durban and parts of KwaZulu Natal, an area badly hit by floods during April of this year.

The latest flooding has caused technical teams at the port of Durban to work on clearing blockages to the logistics infrastructure, most notably at the port’s Bayhead Road area which is a crucial through road offering access to the port for road freight.

All blockages had been removed for access to six of the ten vessels at the port on Sunday, with the remaining four also close to completion. This allowed the port advisory to release a statement giving permission for transporters to dispatch trucks to the terminals for both import and export cargo.

The latest flooding has once again highlighted the need for investment into the ZA supply chain infrastructure, with businesses and the government being called upon by Durban Chamber of Commerce and Industry CEO, Palesa Phili, to work together to “co-create workable and sustainable solutions.” which can help businesses better recover in such situations.

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