Logistics News 29 July

Frontline Insights

US Tariff Deadline Sparks Global Trade Shifts

With days left before August 1, exporters worldwide are scrambling to avoid punitive tariffs under President Trump’s trade policy. The 90-day grace period is nearly over, yet South Africa’s status remains unknown. Analysts warn of a “whiplash effect” a sharp surge in shipments ahead of the deadline, followed by congestion, equipment shortages, and price volatility.

South Africa Looks East Amid Trade Tensions

As uncertainty deepens with the US, South Africa is reinforcing ties with China, already its largest trading partner. The trade gap has ballooned to nearly $9.7 billion, making Asia a critical buffer against the looming tariff risk.

Mexico and Canada Launch $120 Billion ‘Northern Corridor’

In a bold response to US protectionism, Mexico and Canada are building a trade corridor to bypass American ports. This $120 billion project combines rail and maritime routes with blockchain-enabled customs clearance. The move signals a global realignment of trade lanes to mitigate policy shocks.

Industry Braces for Disruption

Global forwarders and carriers report booking volatility, with some ocean lanes overbooked and others showing sharp dips. Carriers are cancelling sailings and adjusting capacity. Shippers should secure bookings early and maintain close visibility on rates through August.

Airfreight Under Pressure

US trade tensions are rippling across airfreight markets. According to Bertling, June marked the first year-on-year decline in global spot rates since April 2024, even as volumes rose briefly in late May.

Key figures:

• Chargeable weight dropped 10% week-on-week, and nearly 20% year-on-year.

• Spot rates fell 5% week-on-week and remain 17% below 2024 levels.

This dip followed a short-lived spike during the temporary tariff truce, as shippers rushed to move delayed cargo. The pause ended, and demand collapsed — a warning sign for markets dependent on just-in-time airfreight.

Top Story: Tariffs and Government Silence

President Trump has confirmed letters will go out to trading partners by 9 July outlining new tariff rates, effective 1 August. The baseline reciprocal tariff is 10%, but countries aligned with BRICS — including South Africa — could face rates as high as 50%.

Despite the looming deadline, the GNU has yet to provide clarity on South Africa’s position. Exporters remain in limbo, hoping for exemptions or reduced rates. Analysts warn of heavy congestion, equipment shortages, and volatile pricing in the weeks ahead if tariffs hit hard.

What should exporters do now?

• Monitor developments closely and adjust trade strategies quickly.

• Secure bookings early, especially for high-demand routes.

• Factor potential tariff impacts into landed cost calculations.

Did You Know?

Cape Town Container Terminal is among the most wind-affected ports in the world. Strong winter winds can halt crane operations for hours or even days, creating major delays, particularly during peak citrus season.

Global Freight Rates: Six Weeks of Decline

Drewry’s World Container Index fell 3.3% this week, marking its sixth consecutive drop since mid-June. The early May spike caused by tariff fears has faded, and with carriers cutting services, rates remain under pressure.

Key lanes:

• Shanghai → Los Angeles: down 5% to $2,675

• Shanghai → New York: down 7% to $4,210

Carriers are cancelling sailings across the Pacific as bookings cool. Analysts expect further softening through August, despite ongoing uncertainty around tariffs.

South African Port Report

Durban:

• Pier 1: 1–2 days

• Pier 2: 1–2 days

Cape Town:

• Weather-related delays: 3–6 days

Ngqura:

• 0–2 days

Port Elizabeth:

• 1 day

Knowledge Corner: What Is a Bill of Lading and Why Is It Important?

A Bill of Lading (B/L) is more than just paperwork it’s a critical shipping document that serves as:

• Receipt: Confirms goods were loaded on board.

• Contract of Carriage: Sets terms between shipper and carrier.

• Document of Title: Whoever holds it owns the goods.

There are different types (Original, Telex Release, Express), and errors can lead to costly delays. Always verify details before cargo sails to avoid re-issuing fees and clearance issues.

Key Notes

• Expect volatility in air and ocean freight markets as tariff uncertainty persists.

• Secure bookings early and maintain visibility on cost trends.

• Stay on top of tariff developments; planning is critical.

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