REGISTRATION NUMBER: 2014/042417/08 PRESIDENT: Sipho M Pityana VICE PRESIDENT: Martin Kingston CEO: Cas Coovadia NEDLAC CONVENOR: Kaizer Moyane DIRECTORS: Busi Mavuso, Christopher Campbell, Deidre Penfold, Gwarega Mangozhe, Joe Mwase, John Purchase, Maurice Radebe, Roger Baxter, Stavros Nicolaou, Mthokozisi Xulu

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COVID-19: Cargo movement update Date: 7 August 2020

About this update

This update — the third of its kind and previously circulated via Business for South Africa — contains a

combined overview of the flow of air, sea and road freight to and from South Africa over the course of the

last week. The report provides a consolidated view of the different modalities published earlier by the

Business for South Africa supply chain team.

Weekly snapshot Table 1 - Port volumes and air cargo flows compared to last week

Flows Current1 Previous2

Growth Import Export Total Import Export Total

Port Volumes (TEUs) 28799 34671 63 470 24 438 32928 57 366 ↑11%

Air Cargo (tons) 2 070 1 227 3 297 1 805 1 191 2 996 ↓10%

Monthly snapshot Figure 1 - Monthly3 cargo flows compared to the same period in 2019

1 ‘Current’ means the last 7 days’ (a week’s) worth of available data. 2 ‘Previous’ means the preceding 8-14 days’ (a week’s) worth of available data. 3 ‘Monthly’ means the last full months’ worth of available data compared to the same month in 2019 (in this case June 2020 versus June 2019 for all metrics, except for domestic — and international air cargo, which has been updated to include the figures stated in this version of the report).

80%

97%

124%

62%

32%

42%

38%

0% 50% 100% 150%

Containers (TEUs)

Dry bulk (MT)

Liquid bulk (MT)

Breakbulk (MT)

Vehicles (Units)

International Air Cargo

Domestic Air Cargo

2

Key Notes

• An average of ~9 067 TEUs was handled per day over the course of the last week, ↑872 from last

week

• Air cargo volumes have continued to largely remain constant with international - and domestic air

cargo flows at approximately 63% (↓3% —) and 67% (↑2% from last week) compared to pre-

lockdown levels

• Regionally, the AfDB projects that in the worst-case scenario, growth in the Greater Southern African

region will fall to ↓6.6% in 2020 before recovering to ↑2.2% in 2021

• Global container throughput is ↓8%, with the COVID-19 pandemic triggering recessions in

economies around the world

Ports Update

This section provides an overview of the flow of cargo and overall port congestion.

Container flow overview

The following two tables indicate the container flows for the last 7 days, as well as the projected container

flows for the next 7 days.

Table 2 - Container Ports - 7-day flow forecasted for 30 July to 5 August 4

7-day flow forecast (30.07.2020 – 05.08.2020)

TERMINAL NO. OF CONTAINERS TO DISCHARGE (IMPORT)

NO. OF CONTAINERS TO LOAD (EXPORT)

DURBAN CONTAINER TERMINAL PIER 1: 4 388 4 800

DURBAN CONTAINER TERMINAL PIER 2: 9 586 11 133

CAPE TOWN CONTAINER TERMINAL: 4 475 6 850

NGQURA CONTAINER TERMINAL: 5 157 7 565

PORT ELIZABETH CONTAINER TERMINAL: 832 2 580

TOTAL: 24 438 32 928

Source: Transnet, 2020. Updated 06/08/2020

Table 3 - Container Ports - 7-day flow forecast for 6 August to 12 August5

7-day flow forecast (06.08.2020 – 12.08.2020)

TERMINAL NO. OF CONTAINERS TO DISCHARGE (IMPORT)

NO. OF CONTAINERS TO LOAD (EXPORT)

DURBAN CONTAINER TERMINAL PIER 1: 4 651 4 413

DURBAN CONTAINER TERMINAL PIER 2: 12 599 12 875

CAPE TOWN CONTAINER TERMINAL: 7 303 8 990

NGQURA CONTAINER TERMINAL: 3 903 6 943

PORT ELIZABETH CONTAINER TERMINAL: 343 1 450

TOTAL: 28 799 34 671

Source: Transnet, 2020. Updated 06/08/2020

4 It remains important to note that a fair percentage (approximately 28%) of containers are neither to be imported nor exported, but rather consist of empties and transhipments. Due to container imbalances, this proportion is fluctuating more than usual. 5 As noted in footnote 1.

3

Throughout the last few iterations of this report, export container volumes have continued to outstrip

import container volumes, once again by substantial numbers this week and next week. Durban continues

to handle the majority of the container loads with a 53% share across both piers, with the Port of Cape Town

next in line at 23%. Volumes at the port of Cape Town have shown a pleasing upward trend over this most

recent 2-week period, rising from 11 275 TEU to 16 293 TEU. As port performance there improves, the trend

of vessels avoiding Cape Town has been reversed with no vessels on berth and no vessels at anchor on the

afternoon of 6 August, which is a first in recent memory. This has led to the SAECS southbound service

reinstating Cape Town into its rotation. Vessels are now berthing on arrival, with two vessels expected later

on 6 August and in the early hours of Friday morning (7 August). CTCT is reviewing the re-introduction of the

CTOC system. Private/public sector collaboration in bi-weekly port meetings has played an important role in

this improvement.

Current stack occupancy across the board is around 68% and 35% in Durban and Cape Town respectively. To

provide a more comprehensive flow of container cargo to and from our commercial ports, the following

figure indicates the 7-day rolling forecast for container flows from the onset of the lockdown period at the

end of March.

Figure 2 - 7-day flow forecast for total cargo movement (30 March to 30 July; week-on-week)

Source: Calculated using data from the Transnet Port Terminal updates. Updated 06/08/2020

Due to the delayed effects of the pandemic and normal lead times in ocean-going freight, overall container

volumes are still only around ~80% compared to the same time last year.

The figures below indicate the weekly forecasted container flows for both the last 7 days, as well as the next

7 days.

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7-day flow period

DURBAN CONTAINER TERMINAL PIER 1 DURBAN CONTAINER TERMINAL PIER 2

CAPE TOWN CONTAINER TERMINAL NGQURA CONTAINER TERMINAL

PORT ELIZABETH CONTAINER TERMINAL Linear (DURBAN CONTAINER TERMINAL PIER 2)

4

Figure 3 - 7-day flow forecast for total cargo movement (30 July to 5 August; day-on-day)

Source: Calculated using data from the Transnet Port Terminal updates. Updated 06/08/2020.

Figure 4 - 7-day flow forecast for total cargo movement (6 August to 12 August; day-on-day)

Source: Calculated using data from the Transnet Port Terminal updates. Updated 06/08/2020.

Summary of port statistics

An average of around ~8 195 TEUs were handled per day over the course of the last week (30 July to 5 Aug

- Table 2), with an increased average of around ~9 067 TEUs expected to be handled per day over the course

of the next week (6 - 12 Aug - Table 3). These figures can be compared to an average of around ~8 650 TEUs

handled per day in the previous report (23 July), which largely showcases the stagnation in containerised

cargo flows, which can in turn be used as a proxy for the state of the overall maritime economy.

-2

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6

8

30-Jul 31-Jul 01-Aug 02-Aug 03-Aug 04-Aug 05-Aug

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7 day flow - 30 July to 5 August

DURBAN CONTAINER TERMINAL PIER 1 DURBAN CONTAINER TERMINAL PIER 2

CAPE TOWN CONTAINER TERMINAL NGQURA CONTAINER TERMINAL

PORT ELIZABETH CONTAINER TERMINAL

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4

6

8

10

06-Aug 07-Aug 08-Aug 09-Aug 10-Aug 11-Aug 12-Aug

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7-day flow - 6 August to 12 August

DURBAN CONTAINER TERMINAL PIER 1 DURBAN CONTAINER TERMINAL PIER 2

CAPE TOWN CONTAINER TERMINAL NGQURA CONTAINER TERMINAL

PORT ELIZABETH CONTAINER TERMINAL

5

Nonetheless, operations seem to be running smoothly, although perhaps the reduced volumes have assisted

in this regard, with intermittent equipment breakdowns the only challenges being reported over the course

of the last 7 days. To date, no further COVID-19 cases have been reported at the port of Cape Town, with

extensive screening still being done.

In terms of the overall state of operations at the port of Cape Town, TNPA handled 7 dockings and 10 sailings

over the last 2 days with 2 tugs and 2 berthing gangs with a total of 3 vessels at anchor, no container vessels

and no delays, which bodes well for the foreseeable future. Furthermore, given the tragic events in Beirut,

TNPA Port control will report vessels not reporting dangerous goods on IPMS and the Navis system, with

SAASOA proposing penalties for non-compliance therewith. These events once again highlight the need for

transparency and watertight compliance, which serves as a reminder to all parties to be vigilant at all times.

In other operations initiatives in Durban, TPT has launched an automated Truck Booking System (TBS) to

tackle congestion in the South Durban area. The system went online from last week Monday at Durban’s

Container Terminal’s Pier 16.

Air Update

i. International air cargo

The following table depicts the inbound and outbound air cargo flows to and from ORTIA in the last week.

For comparative purposes, the average air freight cargo (inbound and outbound) for ORTIA handled in the

two months before the lockdown period (January and February) was approximately 743 879 kg per day7.

The volumes depicted in the table are also in kilograms.

Table 4 - International inbound and outbound cargo from OR Tambo

Flows 29-Jul 30-Jul 31-Jul 01-Aug 02-Aug 03-Aug 04-Aug

Volume inbound 334 975 208 412 292 236 319 180 452 963 368 812 92 929

Volume outbound 134 861 187 216 151 675 181 306 299 941 161 046 111 081

Total handled per day 469 835 395 628 443 911 500 485 752 904 529 858 204 009

Updated: 06/08/2020

The average volume of air cargo handled at ORTIA over the 7 days starting 29 July amounted to 295 644 kg

inbound and 175 304 kg outbound, resulting in an average of 470 947 kg per day, which is approximately

63% compared to the two months before the lockdown period. These figures reported are - on average -

slightly lower than those reported in the previous edition of this report (23 July), but fortunately not

alarmingly so.

The following figure is a visual representation derived from Table 4, illustrating how the volumes of air cargo

have fluctuated over the course of the last 7 days.

6 Chris Ndaliso, 27/07/20. https://www.iol.co.za/dailynews/news/transnet-launches-automated-system-in-durban-in-hopes-of-easing-truck-congestion-6cc5c58d-92df-4d80-a842-518105037f71?s=09 7 Note, when including statistics from South Africa’s other two international airports, Cape Town International and King Shaka (Durban) International airports, the total figure rises to 916 175 kg per day.

6

Figure 5 - 7-day cargo flow for OR Tambo

Updated: 06/08/2020

The following figure shows the long-term average of international air cargo flows to and from ORTIA since

the 30th of March. After the initial spike in volumes in late April and early May, caused largely by bulk imports

of PPE, weekly flows, although fluctuating from day to day, have settled into a fairly consistent average.

Figure 6 - Daily cargo flow for OR Tambo

Updated: 04/08/2020

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29-Jul 30-Jul 31-Jul 01-Aug 02-Aug 03-Aug 04-Aug

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Inbound and outbound air cargo, 29 July to 4 August

Volume inbound Volume outbound

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Inbound and outbound air cargo, 30 March to 4 August

Inbound Outbound Linear (Inbound)

7

The following table depicts the origin and destination of air cargo moved to and from ORTIA. Note that the

origin shown is the flight origin, not necessarily the origin of the cargo. The cargo originates around the world

and then moves here via the hubs of the major airlines i.e. Doha (Qatar), Dubai (Emirates), Istanbul (Turkish),

and London (British), etc. Indications are that the bulk of the arriving cargo originates in the Far East, since

there are virtually no passenger flights, and only chartered flights and scheduled cargo flights are arriving.

Consistently high volumes between ORTIA and Nairobi are noteworthy, and can be explained by the

opportunities arising out of the fresh flower export trade from Kenya to Europe.

Table 5 - Total international cargo movement to and from OR Tambo

Partner 29-Jul 30-Jul 31-Jul 01-Aug 02-Aug 03-Aug 04-Aug

Amsterdam 50 350 47 895 53 269 39 021 31 419 77 791 21 940

Doha 14 776 55 476 66 627 18 691 16 964 110 731 32 325

Dubai 43 755 84 509 158 774 55 462 55 462 52 459 -

Istanbul 33 125 53 518 - 107 112 107 112 - -

Johannesburg 43 997 50 939 18 803 158 678 28 866 44 777 53 740

London 44 266 56 891 46 854 65 105 49 141 56 538 17 893

Luanda - 28 - - - - 1 682

Luxembourg 101 991 - - - - - -

Nairobi 101 537 32 234 99 584 24 311 95 025 133 188 32 325

Paris 14 343 14 138 - 32 105 29 213 38 252 29 668

Singapore 21695 - - - 339 702 16 122 14 436

Total handled: 469 835 395 628 443 911 500 485 752 904 529 858 204 009

Updated: 06/08/2020

When comparing the origin and destination of air cargo moved to and from ORTIA over the course of the

last couple of months, it is evident that our trading partners have remained largely the same. The significant

recent omission is Addis Ababa and Ethiopian Airways, which accounted for a large portion of the air cargo

during the early days of lockdown when bulk imports of PPE from China were in full swing, and even

passenger aircraft were being used on a charter basis.

As the figure above indicates, there has been a continuous (albeit incrementally small) increase in outbound

volumes to and from ORTIA since the start of lockdown at the end of March, with inbound volumes on

average remaining relatively stable, especially with very few bulk consignments arriving as was the case with

Ethiopian Airlines in April to which we have already referred.

The following figure, a graphic representation of Table 5, shows the diversity of South Africa’s trading

partners in terms of cargo handled per country of origin. Once again, note the commentary on origin as

mentioned above. The share of cargo origin is much more evenly spread, with the noticeable omission of

Addis Ababa and Ethiopian Airlines. Overall, international cargo has decreased by approximately 10%

compared to last week.

8

Figure 7 - Total cargo movement between OR Tambo and trading partners

Updated: 04/08/2020

The following figure illustrates the cargo moved per ground handling agent since the start of the lockdown

period, with Swissport handling the bulk of the international cargo to and from ORTIA.

Figure 8 - Cargo movement during lockdown, per handler

Updated: 04/08/2020

The following figure illustrates the cargo moved per airline since the start of the lockdown period, with Qatar,

Martinair, Emirates, and Ethiopian accounting for the vast majority of the international cargo to and from

ORTIA.

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Amsterdam Doha Dubai Istanbul Johannesburg London Luanda Luxembourg Nairobi Paris

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SWISSPORT WORLDWIDE FLIGHTSERVICES

AERO-LINK MENZIES CARGO BIDAIR CARGO

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Inbound and outbound cargo per handler: 30 March to 4 August

Sum of Inbound Sum of Outbound

9

Figure 9 - Cargo movement during lockdown, per airline

Updated: 04/08/2020

It should be noted that international air cargo has been channelled to ORTIA during the lockdown period,

with very little cargo consigned to or from Durban and Cape Town.

Despite the operational constraints, the ground staff at OR Tambo are doing their utmost to handle the cargo

and ensure that the cargo is sanitised and handed over to receivers as directed. The following figure

illustrates the percentages of cargo sanitised, as well as the percentage of cargo checked by Port Health.

Figure 10 - Air cargo sanitation process

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Inbound and outbound cargo per airline: 30 March to 4 August

Sum of Inbound Sum of Outbound

88%

12%

Cargo sanitasation percentage

Cargo sanitised Cargo not sanitised

36%

59%

6%

Percentage cargo checked by Port Health

Checked Not checked Unknown

10

Updated: 04/08/2020

Domestic air cargo

The following table shows the domestic inbound and outbound air cargo flows during the lockdown period,

as captured by industry. The table — capturing the main domestic hubs — is a summarized version in terms

of domestic air cargo flows for the duration of the lockdown period. For comparative purposes, the average

domestic air freight cargo (inbound and outbound) for ORTIA handled before the lockdown period was

approximately 75 000 - 90 000 kg per day (calculated from industry feedback). The volumes depicted in the

table are also in kilograms.

Table 6 - Total domestic cargo movement

DATE / AIRPORT CPT

DUR ELS JNB PLZ OTHERS TOTAL

March Average 8 581 823 1 728 4 020 2 912 1 555 19 619

April Average 14 664 900 2 152 13 911 3 814 1 760 35 956

May Average 28 421 1 639 4 677 25 282 7 333 1 099 58 064

June Average 24 256 2 137 5 105 23 935 8 601 3 324 63 236

01-Jul-20 33 489 5 408 6 281 57 506 9 275 4 716 116 675

02-Jul-20 31 428 3 962 5 794 40 587 9 386 5 029 96 186

03-Jul-20 12 129 1 580 2 941 26 464 4 626 3 622 51 362

04-Jul-20 299 295 1 389 - 40 673

05-Jul-20 1 015 138 - 47 - - 1 200

06-Jul-20 44 246 3 896 5 124 24 130 10 102 4 708 92 207

07-Jul-20 38 517 6 050 7 390 38 511 9 781 5 465 105 714

08-Jul-20 35 642 4 599 5 156 56 400 9 224 4 771 115 791

09-Jul-20 36 756 4 597 5 168 31 883 11 187 4 892 94 483

10-Jul-20 53 121 - 926 157 28 1 285

11-Jul-20 33 489 - 6 281 57 506 9 275 10 124 116 675

12-Jul-20 761 92 - 480 121 92 1 454

13-Jul-20 43 718 4 340 11 087 31 961 9 397 9 562 105 725

14-Jul-20 40 600 3 742 5 328 28 593 9 121 8 646 92 288

15-Jul-20 31 112 5 375 5 209 51 628 8 029 11 181 107 159

16-Jul-20 35 289 3 888 4 663 25 420 9 087 7 859 82 318

17-Jul-20 15 118 1 205 2 567 18 334 3 842 4 554 44 415

18-Jul-20 383 78 - 756 188 - 1 404

19-Jul-20 1 259 32 - 1 642 18 12 2 962

20-Jul-20 47 356 3 740 6 457 35 315 7 985 6 887 107 740

21-Jul-20 35 519 3 627 6 264 28 939 9 252 5 382 88 983

22-Jul-20 34 386 4 284 5 504 59 635 8 046 3 667 115 522

23-Jul-20 37 645 3 290 5 247 22 602 8 829 3 412 81 025

24-Jul-20 12 769 2 028 2 919 25 162 4 165 2 690 49 732

25-Jul-20 299 234 7 36 - - 575

26-Jul-20 2 286 123 53 229 98 10 2 798

11

27-Jul-20 45 115 5 423 7 252 26 280 10 009 6 289 100 368

28-Jul-20 34 677 4 808 5 315 26 962 8 653 6 263 86 679

29-Jul-20 35 908 4 208 5 390 57 418 8 493 4 141 115 557

TOTAL 2 552

340 231 155 395 243

2 466

667 655 276 342 187 6 642 868

Updated: 30/07/2020

The following figure is an illustration of the total air cargo moved per day as per the table above:

Figure 11 - Total domestic air cargo since lockdown commenced

Updated: 30/07/2020

The average domestic air cargo moved during the lockdown period has amounted to ~60 380 kg per day,

which constitutes approximately 67% of the volume moved pre-lockdown, and this reflects the current

situation as experienced by the industry. On a more positive note, however, has been the fact that the daily

flow of goods has continued to increase steadily as the trend line in the figure above illustrates.

Global air cargo traffic

The following air traffic image displays the current pattern of air traffic globally, providing a snapshot around

mid-afternoon of the 6th of August.

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Figure 12 - Global air traffic: 6 August 2020

Source: FlightRadar24, 06/08/2020, 15:30

The image continues to provide a graphic illustration of the lack of activity in African airspace, although the

traffic has greatly increased compared to the early days of lockdown. The volume of aircraft currently moving

across African airspace has increased, however, as can be seen in the statistics provided in the previous

section, the volumes are not yet up to normal ranges, as the following image will show.

South African air traffic

The following air traffic image displays the current pattern of air traffic in Southern Africa, providing a

snapshot around mid-afternoon on the 6th of August. The number of aircraft has increased somewhat in

recent days, largely due to the recent increase in passenger flights between South African airports, but with

no international passenger traffic, volumes are insignificant compared with what was the case pre-lockdown.

13

Figure 13 - Southern African air traffic: 6 August 2020

Source: FlightRadar24, 06/08/2020, 15:30

1. Regional update

• African Development Bank (AfDB): African Economic Outlook 2020

After experiencing the delayed effects of the COVID-19 pandemic compared to the rest of the world, a higher

level of preparedness is urgently required to prevent and mitigate further spread (and subsequent effects)

of the COVID-19 pandemic throughout Southern Africa. This includes increasing resources for testing and

other areas of public health; as well as concerted efforts to reduce the impact on households and the

economy in general. Especially for the poorest citizens in the region.

Compared to the rest of Africa, the projected economic impact of COVID-19 is even worse for the greater

Southern Africa region. The AfDB projects that in the worst-case scenario, growth will fall to -6.6% in 2020

before recovering to +2.2% in 2021. Furthermore, the impact of COVID-19 in South Africa — the region’s

largest economy, as well as an important gateway — is projected to trickle through to the rest of the

Southern African economies. For SACU specifically, Botswana, eSwatini, Lesotho, and Namibia are seen as

being very vulnerable to South Africa’s impending economic contraction, while Mozambique’s sales of gas

and electricity could also be adversely affected due to its reliance on South Africa as a consumer thereof.

On the other side of the region, economic impacts will also be noteworthy in East Africa. This is due to several

macroeconomic factors, most notably: lower demand among trading partners, disruptions in supply chains,

lower domestic production, and reduced tourism and hospitality activities8. Fortunately, East Africa is

projected to have the most resilient performance throughout Africa amid the pandemic. This can largely be

attributed to the fact that entering the crisis, economic growth was particularly strong at around 5.2% in

2019. The AfDB reports that, in the baseline scenario, growth is projected to be 1.2% in 2020, and in the

worst-case scenario, projected growth at least remains positive for the year, at around 0.2%. Overall, the

region is better safeguarded against the effects of COVID-19 due to wider economic diversification and lower

reliance on primary goods.

8 AfDB, 07/07/20. African Economic Outlook 2020 Supplement. https://www.afdb.org/en/knowledge/publications/african-economic-outlook

14

Noting these potential adverse economic effects, what the crisis has emphasized is that improving business

environment competitiveness in the region is crucial, especially in terms of regional integration. Here, the

conversation once again turns towards intra-African trade with the African Continental Free Trade Area

(AfCFTA). The AfCFTA is projected to provide medium- and long-term opportunities for markets to spur

economic growth. “The intra-African market is expected to mitigate some of the negative effects of Covid-

19.”9

Border closures

Some of South Africa’s borders have been affected by temporary closures over the course of the last week

as COVID-19 infections spread across the country. The following notes summarise these closures, and this

pattern can be expected to continue for some time:

a. 7 August: Ficksburg border post (Lesotho) has been reopened.

b. 6 August: The Maseru Bridge border post (Lesotho) has been reopened.

c. 6 August: Groblers Bridge border post (Botswana) will be closed from 12:00 to 15:00 today.

d. 6 August: The Maseru Bridge border post (Lesotho) is closed until further notice.

e. 5 August: Ficksburg border post (Lesotho) will be closed from 10:00 tomorrow until Friday

7 August.

f. 3 August: Beitbridge border post (Zimbabwe) will be closed from 14:00 to 20:00 today.

g. 2 August: Richards Bay office closed until further notice.

h. 1 August: Jeppes Reef border post (eSwatini) has been reopened.

2. International update

The following section provides some context as to the overall health of the global economy, as well as the

impact of COVID-19 on the global economy.

a. WTO

On 31 July, The World Trade Organisation (WTO) published the latest edition of its annual publication on

international trade statistics, the “World Trade Statistical Review”10. The volume of world merchandise trade

declined in 2019 for the first time since the financial crisis of 2008-09, weighed down by rising trade tensions

and weakening economic growth.

These were the most important matters concerning global trade in 2019:

• Merchandise trade volume declined by 0.1% in 2019, compared with 2.9% growth in 2018. World

GDP growth slowed to 2.3%, down from 2.9% the previous year.

• The US$ value of merchandise trade fell year-on-year, dropping 3% to US$ 18.89 trillion in 2019.

Trade declined more steeply in value terms than in volume terms due to falling export and import

prices.

• Commercial services trade grew by 2% in 2019, down from 9% in 2018, as growth slowed and trade

tensions escalated.

• The decline of 0.1% for merchandise trade volume in 2019 was well below the average annual

growth rate of 2.3% since the financial crisis of 2008-09. GDP growth of 2.3% last year was in line

with its average rate over the past ten years.

• Although the first cases of COVID-19 were recorded in late 2019, the crisis did not contribute to the

slowdown for the year. The pandemic is expected to lead to sharp declines in trade and GDP in 2020.

9 As above. 10 WTO, 31/07/20. World Trade Statistical Review. https://www.wto.org/english/news_e/news20_e/publ_31jul20_e.htm

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The following figure illustrates global trade over the last 7 years.

Figure 14 - World merchandise trade volume and real GDP growth. 2012-2019 (Annual % change)

Source: WTO Secretariat for trade

Forecasting the impact of COVID-19 for global trade, the WTO noted that “volume of world merchandise

trade has fallen precipitously in the first half of 2020 as the COVID-19 pandemic has disrupted the global

economy. Leading indicators provide clues about the extent of the slowdown and how it compares with

earlier crises.”

Global container throughput has decreased by 8% globally, with the COVID-19 pandemic triggering

recessions in economies around the world. The following figure showcases this downturn in container flows

up to end-May of this year.

Figure 15 - Global container throughput, January 2007 to May 2020 (seasonally adjusted index, 2015 = 100)

Source: Institute for Shipping Economics and Logistics

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The following section notes the container industry index, highlighting the above.

Container industry at a glance

International freight rates have continued to surge, according to the “World Container Index” (WCI) as

published by Drewry, the UK-based Maritime research and consulting firm. The following figure showcases

this current surge.

Figure 16 - World container index

Source: Drewry Supply Chain Advisors

The current global average freight rate for a 40’ container is hovering at $2,000 for the end of July, which is

up by 42% since the start of the year. The average composite index of the WCI for year-to-date is $1,689 per

40ft container, which is $284 higher than the five-year average of $1,406 per 40ft container.

The following table showcases the latest freight rates assessments on the eight major East-West trade

routes.

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Table 7 - Spot freight rates by route (July 2020)

Source: Drewry Supply Chain Advisors

International Air Transport Association

In the recently published ‘IATA Air Cargo Market Analysis’11 IATA notes that air cargo continued to recover

in June, however at a slow pace. The following keynotes can be taken from the publication:

• Industry-wide cargo tonne-kilometres (CTKs) declined by 17.6% year-on-year in June, after falling

20.1% in May. Seasonally adjusted global CTKs also lifted moderately for the second consecutive

month.

• Cargo demand in June was softer than would normally be suggested by manufacturing output and

new export orders, which were stabilizing in most parts of the world in June. That relative

underperformance was driven by air freight losing market share of total world trade in recent

months, as buyers are turning to cheaper but slower means of transport.

• Available cargo tonne-kilometres (ACTKs) fell 34.1% year-on-year in June, resulting in the cargo load

factor rising 11.5ppts year-on-year. As for April and May, the industry-wide load factor is close to

record high levels.

• North America led the recovery this month, with international CTKs down 8.8% annually, versus

13.2% in May. Europe and the Middle East also posted improvements, but the decline in CTKs

accelerated in the other regions. The region’s aviation industry has continued to struggle amidst

strict travel restrictions and very low traffic demand as the main downside risks, with some recovery

being experienced through stabilizing manufacturing output and cargo volumes being driven by the

Africa-Asia trade route.

The following figure shows how air transport is losing global trade market share to ocean and rail transport,

with buyers turning to slower, but cheaper means of transport. No doubt sharp increases in airfreight rates

in the early stages of the pandemic have played a role in this.

11 IATA Air Cargo Market Analysis, published on 28 July 2020.

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Figure 17 - Market share of air transport in world trade

Source: IATA Economics

Many of the constraints of air travel (cargo and passengers) can be attributed to the fact that many countries

still have very restrictive border policies in place. The following figure attests to that, showing the current

level of border restrictions in place.

Figure 18 - Current border restrictions in place

Source: IATA Timatic

In summary, the figure above contributes to the fact that the majority of air cargo metrics across the globe

remain in starkly negative territory compared to the same time last year. It is therefore likely that the

capacity crunch will persist until at least the second quarter of 2021.

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World Road Transport Organisation

In the recently published ‘IRU Intelligence Report’ the World Road Transport Organisation (IRU) notes how

the impact of COVID-19 has shaped the road transport industry. The following side-by-side figure illustrates

the turnover impact by region; as well as pointing out the top facilitative measures and main restrictive

measures imposed by several government institutions concerning the flow of cross-border road freight:

Figure 19 - Turnover impact by region on road transport (FY 2020)

Source: IRU Intelligence Report

Due to many legislative restrictions imposed on the cross-border flows of goods (as noted by Figure 18

above), the road transport industry is one of the sectors most impacted by COVID-19. Collectively, recent

figures indicate that:

• Goods transport losses globally are expected to exceed EUR 550 billion, with annual turnover ↓18%

• Passenger transport losses in Europe are expected to exceed EUR 80 billion, with annual revenue

↓57%

In summary, the IRU reports that the COVID-19 induced pandemic and ensuing restrictions on cross-border

cargo flows will result in as many as 3.5 million road transport operators globally fighting for financial

survival.

Conclusion

This update — the third of its kind — contains a consolidated overview of the flow of air, sea and road freight

to and from South Africa over the course of the last week, as well as an overview of the current situation

with trade regionally and internationally. South Africa remains in 5th position globally in terms of virus

infections with more than 545,000 active cases12 recorded at the time of writing. The continued health

consequences of COVID-19 for the country have unfortunately not aided attempts made by business to

resuscitate the economy.

For the ocean modality, container volumes are up by 11% compared to last week, with an average of

approximately 8 195 TEUs handled daily over the course of the last 7 days’ worth of available data, with an

increased average of around ~9 067 TEUs expected to be handled per day over the course of the next week.

12 John Hopkins, Coronavirus Resource Centre. https://coronavirus.jhu.edu/map.html

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As with previous reports, elevated volumes of exports have once again been registered. Throughout the

various levels of lockdown which started at the end of March, container flows have hovered around 80%

capacity compared to the same period in 2019.

Concerning international air cargo flowing to South Africa, the average daily volume of air cargo handled at

ORTIA over the 7 days decreased by 10%. The period beginning 29 July saw daily volumes of 295 644 kg

inbound and 175 304 kg outbound, resulting in an average of 470 947 kg, which is approximately 63%

compared to the two months before the lockdown period. In terms of domestic air cargo, volumes are up

by 2% with the average domestic air cargo moved during the lockdown period now at ~60 380 kg per day,

which constitutes around 67% of the volume moved pre-lockdown. These air cargo figures once again

highlight the sustained negative impact of the pandemic on the air cargo industry.

Regionally, the effects of COVID-19 on the Southern African economy appear to be severe, with the AfDB

projecting that in the worst-case scenario, growth will fall to -6.6% in 2020 before recovering to 2.2% in

2021. Furthermore, the impact of COVID-19 in South Africa — the region’s largest economy, as well as an

important gateway — is projected to flow through to the rest of the Southern African economies.

Internationally, global container throughput is down by 8%, with the current average freight rate for a 40’

container remaining substantially higher at around $2,000, up by 42% compared to 2019. In terms of air

cargo, industry-wide cargo tonne-kilometres (CTKs) declined by 17.6% year-on-year in June, after falling

20.1% in May. The COVID-19 pandemic has triggered recessions in several economies, with South Africa

being no exception.

Ultimately, global supply chains are currently in desperate need of revival, as is the case in South Africa. As

mentioned in previous reports, economic recovery will broadly depend on three matters: (1) trends in the

world economy, (2) the efficacy of the economic support measures taken by the country so far, and (3) the

resilience of the trading community in successfully returning to full operation when the lockdown is over

and volumes can be elevated to pre-lockdown levels. The South African supply chain is at a critical juncture

at this moment, and if this is not addressed as a matter of urgency, it can be expected to have devastating

implications for trade and industry over a much longer period of time. A well-co-ordinated collective

approach from all stakeholders is urgently needed to turn matters around.