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South African Ports Saw a 30% Decline in Container Handling Capacity

Writer's picture: New Horizon Freight SolutionsNew Horizon Freight Solutions

South Africa's port sector is currently navigating significant challenges, as revealed by the latest Container Port Performance Index (CPPI). Ranked at the bottom among 405 ports worldwide, the nation's ports are grappling with various operational hurdles that are impacting importers and exporters.


Decline in container capacity in South Africa


Decline in Container Handling Capacity

Recent data from the Cargo Movement Update (CMU), compiled by Business Unity SA and the South African Association of Freight Forwarders, shows a sharp decline in container handling capacity at South African ports. Week-on-week, the capacity dropped from 8,244 to 5,737 containers daily—a 30.3% decrease. This reduction is primarily attributed to extreme weather conditions and equipment breakdowns that have severely disrupted port operations.


Impact of Adverse Weather

The Port of Durban experienced closures to incoming vessels earlier this week due to adverse weather. Similarly, strong winds and vessel ranging affected operations at the Eastern Cape ports, compounding the challenges faced by the country's maritime sector.


Global Sea Freight Capacity Issues

The CMU highlights that the issues are not isolated to South Africa. The global container shipping market is currently experiencing a heightened capacity shortage. Notably, Maersk terminated a trans-Pacific service merely eight weeks after its launch. Furthermore, nearly 50% of westbound Asia-Europe sailings have been delayed, exacerbated by ongoing port congestion in Southeast Asian hubs.


Rising Freight Rates

In the midst of these capacity challenges, global freight rates have been on an upward trajectory for nine consecutive weeks, with a 13% increase recorded last week. The Shanghai Containerized Freight Index has surged by 76% since the end of March, indicating no signs of immediate decline. Additionally, the containership charter market remains robust, with rates increasing by 10% last week.


Criticism of the CPPI Rankings

The World Bank's CPPI has faced criticism from various quarters, including South African logistics experts and the Port of Djibouti. Critics argue that the index fails to compare ports fairly, considering the diverse sizes and service dynamics. Questions have also been raised about the accuracy of the data metrics used by the World Bank, with some claiming that the findings do not reflect the tangible reality on the ground.


Local Perspectives

A logistics principal in South Africa, who requested anonymity, emphasized that the CPPI’s methodology does not provide a fair comparison of ports with different operational scales and services. This sentiment echoes the broader discontent within the industry regarding the portrayal of port performance.


Conclusion

South Africa's port sector, alongside global shipping industries, is contending with a myriad of challenges—from weather disruptions and equipment failures to global capacity shortages and rising freight rates. As the sector navigates these hurdles, importers and exporters must stay informed and adaptable to mitigate the impact on their operations. Our Services:

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