Stormy Times For Shippers

Seaborne trade with Europe is facing rough seas due to a raft of factors, including the near collapse of SA ports, global vessel and container shortages, and wars.Wesley Palm, sales and marketing manager at Lumax Energy, writes that the global shipping container shortage and Red Sea geopolitical tensions pose major challenges for South African businesses.Higher freight rates make it more expensive to do business with the EU.Supply chain disruptions are causing significant delays for South African businesses, leading to production slowdowns and inventory shortages. Industries relying on just-in-time inventory systems are especially vulnerable, facing potential production halts and increased operational costs, he states.In its June Logistics News Update, Exporters Western Cape reports that there has been a 240 increase in freight rates over the past year, which adds 2 000 on top of existing costs, retrospective for containers already on their way to SA.Dylan Govender, head of supply chain at Investec Business Banking, urges importers from the EU and other destinations to prioritise planning and shipping now and move cargo earlier than normal, ahead of peak sales for the November and December period, to ensure supply chain continuity and adequate stock holdings.Capacity on South African routes has been reduced as shipping lines reallocate larger vessels to the EU-Asia routes to make up for the three-week delays caused by having to avoid the Suez Canal due to attacks on vessels in the Red Sea.