**South Africa**: The country has improved its position to 23rd in the Agility Emerging Markets Logistics Index, reflecting progress in logistics and digital transformation. However, significant infrastructure and regulatory challenges remain, impacting its role as a key trade hub in the region.
South Africa has gained a notable position in the Agility Emerging Markets Logistics Index, advancing to 23rd place, as detailed in the latest Cargo Movement Update by the South African Association of Freight Forwarders and Business Unity SA. This shift underscores the nation’s strides in logistics and digital transformation, yet it also highlights ongoing challenges that must be addressed for South Africa to enhance its role as a pivotal hub for regional trade.
The report delineates persistent issues within the country’s transhipment capabilities, indicating that despite recent improvements, significant work remains. Industry experts have pointed out that South Africa must focus on overcoming infrastructure limitations and regulatory barriers to bolster its logistics efficiency. These challenges have a direct impact on the country’s capacity to manage growing volumes of transhipment cargo, which is vital for enhancing port competitiveness across the region.
“The biggest concern remains the ability to improve regional transhipment,” the report states. “While there are ongoing upgrades, the sector must address infrastructure gaps to increase cargo volumes and support intra-African trade.” This concern is further compounded by a global shift in supply chain strategies, with a recent survey indicating that 54% of logistics professionals across various markets plan to lessen their reliance on China by 2030, sourcing from more stable networks and emerging markets like South Africa.
In a related development, Drewry’s Global Container Port Throughput Index reported a month-on-month decline in global container throughput but noted robust year-on-year growth, with African ports seeing a modest increase due to enhanced terminal operations and regional trade improvements. However, these advancements do not eliminate the competitive threats posed by international ports, making continuous investment in port infrastructure a key consideration for South Africa’s logistics sector.
At the same time, the United States is contemplating the imposition of higher tariffs on Chinese-built vessels, a move that, if executed, could disrupt established shipping routes and compel carriers to seek alternative options for fleet expansion. Experts caution that such policy changes might introduce volatility in the shipping industry and potentially raise costs for businesses.
In light of these conditions, container freight rates have been on a downward trend, prompting carriers to offer discounts on long-term agreements. While some capacity increases may stabilise prices, companies are approaching negotiations with caution to ensure financial equilibrium amidst ongoing market fluctuations. Notably, global port congestion remains relatively stable, with approximately 8% of the fleet experiencing delays as carriers adjust schedules and leverage digital tools to enhance operational efficiency.
On a local level, the eThekwini Municipality has proposed plans to rezone the residential suburb of Clairwood into a significant logistics park, as a means to accommodate the increasing need for land connected to the Port of Durban’s container traffic. This 524-page land development document, released in February, consists of multiple studies conducted by the city to ensure that new developments preserve historical and religious sites while also improving logistics capabilities.
The proposed “Special Zone 40: Clairwood Logistics Park” aims to enhance the area’s utility for transport and logistics, which currently constitutes a considerable portion of the land use in Clairwood. The municipality’s Back-of-Port Study advocates for reconfiguring Clairwood’s zoning to better align with the demand for port support services, a strategy that may significantly boost Durban’s capacity as a logistics hub, reinforcing South Africa’s competitiveness in the dynamic global trade landscape.
Source: Noah Wire Services
Subscribe to Industry Updates
