The ripple effect into 2020….
USA Freight saw a substantial increase of LCL, FCL and air volumes into SA from the USA. In addition, we are currently managing container consolidations for a large retailer from the USA to SA. They have multiple USA suppliers and by consolidating the shipments at either our New York or Chicago gateway. We then ship their cargo directly from our USA gateway to their distribution center in Durban. In some instances, we have as many as eight different suppliers in one of these designated containers.
Between August-November 2019, USA Freight shipped 3 x 40’ HC. An additional 6 x 40’ HC were shipped November-December 2019. When performing these consolidations there are number of factors that need to be considered, such as the different configuration of how the various suppliers pack their product, to ensuring that the timing of container packing, before storage is incurred, is carefully managed. Communication between our agents, the supplier, the importer and ourselves is crucial. Sometimes critical calls need to be made during the USA time zone, in order that the containers are optimally packed to ensure that costs are kept to a minimum.
2020 started off with the harsh reality of the USA/Iranian conflict rearing its head. This could well see fuel prices increase to the already hard-pressed consumer. The volatility of the economy – worldwide – could see cautious business operations, this year.
In a previous article, we mentioned the unpredictable USA trucking situation. Fortunately, the trucking industry has become more regulated, with truckers’ logbooks being constantly monitored, e.g. ensuring that drivers were taking the required breaks and not working overtime. The result was that a large number of truckers resigned and new drivers had to be trained. This training is still on-going.
Historically, Container Transportation in the USA is most adversely affected in their winter months for obvious reasons. Most of the manufacturing and receiving of imported cargo is done in the Mid-West/Chicago area which experiences the worst of the USA weather conditions. Heavy snowfall at this time causes roads to close, resulting in long queues at the Container Receiving Terminals causing congestion both at the rail-head and port.
Since 2017, we have noticed that importers are allowing themselves longer lee times for these eventualities. If there is a critical shipment the importer will inevitably move via air.
In SA, the poor port conditions are also exacerbating transit times. Durban port is being refurbished which is limiting the number of vessels that can load and discharge. Truckers can be stuck in the port for hours loading or unloading cargo. There is no quick solution to this, but the results are that vessels are omitting Durban and unloading in Coega, PE or alternatively being delayed at origin thus affecting the sailing schedule. This is applicable to all trade routes.
We are look forward to 2020 in a positive light despite the economic challenges SA are facing. The SA Rand has been stable over the last two months and we get the sense that President Ramaphosa wants to make our country more ‘business friendly’. We hope to see him attending business forums regularly and interacting with key players to strive for a good political and business balance.
Alistair Heald
January 2020