DAC Logistics Newsletter: October 2014
Vol. 35
PORTS & HARBOURS Draft Restrictions Introduced
LOGISTICS NEWSFLASH
On 23 September 2014, the Harbour Master met with shipping line companies to announce that engineers had identified issues of concern regarding the depth of certain berths in the port. As a result he subsequently announced that the minimum under keel clearance throughout the port was to be increased from 30cm to 60cm and that vessels with a draft of 12.2 meters or more would require prior approval before calling at or leaving the port and would be able to do so only during high tide. The impact of these changes not only placed shipping line with vessels on water in an invidious position but may result in capacity constraints both for import and export vessels servicing the port. Whether this is temporary or permanent, this has not yet been clarified.
Durban Container Terminal The low level of both full export and import containerised traffic continues, clearly indicating the poor state of the South African economy and that of the majority of export destination countries. Overall container volumes have remained fairly static since 2008 with no increase apparent so far in 2014.
Table 1: Twenty-foot Equivalent Unit (TEU) Statistics: August 2014
TEU'S
Actual JAN - AUG 2013
Actual JAN - AUG 2014
Dev %
684 484
637 911
-6.80%
73 159
101 022
38.09%
Deepsea Shipped Full
458 185
459 154
0.21%
Deepsea Shipped MT
282 947
258 671
-8.58%
Coastwise Landed Full
2 168
2 851
31.50%
Coastwise Landed MT
2 758
2 169
-21.36%
Coastwise Shipped Full
7 417
8 762
18.13%
Coastwise Shipped MT
7 617
12 411
62.94%
149 507
179 699
20.19%
41 686
53 709
28.84%
Deepsea Landed Full Deepsea Landed MT
Transhipments Full Transhipments MT TOTAL Number of Teus:
1 709 928
Source: Transnet National Port Authority
dac@bmanalysts.com Unit 3 St Helier Office Park, Valdean Road, Gillitts PostNet Suite 10139, Private Bag X7005, Hillcrest, 3650
1 716 359
0.38%
Figure 1: Total TEU Comparison 2008 to Date 1 200 000 1 100 000 1 000 000 900 000 800 000 700 000 600 000 500 000 400 000 300 000 200 000 100 000 0
2008
Landed
2009
992 899
Shipped
2011
2012
2013
2014YTD
901 898 1 011 738 1 116 211 1 129 058 1 164 809 743 953
1 059 008 881 594 1 007 985 1 076 244 1 093 518 1 156 940 738 998
Transhipped 590 651
LOGISTICS NEWSFLASH
2010
601 387
509 486
528 460
345 548
310 766
233 408
Source: Transnet National Port Authority
Navis Outages Navis, the operating system which controls all in-terminal activity at Transnet’s container terminals country wide has experienced some critical outages over recent months which, unless immediately identified and addressed, can result in complete terminal shutdowns. This occurred during June and August and most seriously on 6 and 8 September 2014 with resulting congestion and chaos in terminal on roads accessing DCT. Transnet Port Terminals IT management convened a stakeholder meeting on 12 September 2014 where the causes of the outages were tabled with recovery plans and corrective action both short and long term outlined. A copy of the technical update is available from the Clusters logistics team should members be interested.
Table 2: Fully Built Up Traffic Statistics: First Half 2014 Jan 2014
Feb 2014
Mar 2014
Apr 2014
May 2014
Jun 2014
Jul 2014
Aug 2014
Deepsea Imports
24 313
18 293
20 308
22 045
21 202
19 653
28 515
21 609
175 938
Deepsea Exports
15 370
15 145
16 118
15 158
11 867
15 013
13 628
11 167
113 466
12
96
-
-
-
2
1
1 464
1 478
593
2 554
3 327
1 461
1 796
1 591
41 159
35 012
37 019
39 757
36 396
36 129
43 940
34 367
Description
Coastwise
Transhipped
Total
Source: Transnet National Port Authority
dac@bmanalysts.com Unit 3 St Helier Office Park, Valdean Road, Gillitts PostNet Suite 10139, Private Bag X7005, Hillcrest, 3650
Sep 2014
Oct 2014
Nov 2014
Dec 2014
-
TOTAL 2014
111
14 264
-
-
-
-
303 779
LOCAL NEWS Durban Customs Fixed Scanner Operation There have been some delays in the official launch of the new fixed scanner facility based at the New Pier State Warehouse; however trial runs are ongoing with the final launch announcement expected any time soon.
LOGISTICS NEWSFLASH
Issues from the Customs Control Act, Draft Rules SARS Customs have released draft rules for 20 of the 41 chapters in the new Act. These include, inter alia, those concerning “Warehousing” and “The Processing for Home Use Procedure” formally known as “Industrial Rebate” under the 3rd Schedule. The requirements for communicating to Customs movements to and from both bonded storage warehouses and rebate facilities are onerous and will require direct electronic communication from the facilities to Customs if the timings specified are to be met. An example of this is that for controlled goods received in either of these facilities a “receipt notification” must be submitted to Customs within 3 hours of receipt. Similar demands are placed on carriers delivering bonded goods and other facilities, terminals, depots etc. releasing such goods. It is clear from all the draft rules so far released that apart from a variety of other changes compared with current procedures Customs require complete transparency throughout the import and export supply chain up to final release for “Home Use”. Though the reporting requirements appear onerous there are more positive elements in the Act and Rules which should assist bulk liquid tank farms that have both licensed bonded and free tanks. The Rules will allow, if finally confirmed, the storage of dutiable, duty free and goods in free circulation in the same facility simultaneously. There is of course a strict reporting and stock taking regime which will be capable of separating volumes of the different products accurately. Another benefit falls in Chapter 24 and the Rules thereto. In this case a provisional declaration in terms of Part 1 will, with certain conditions, allow importers or receivers of bulk products to submit a provisional clearance pending final declaration of accurate volumes and value once actual landed product is proved. Our understanding is that provisional clearances under this Chapter will be made without the inclusion of any applicable duty or VAT which will only be brought to account on final declaration, (this has yet to be confirmed). It is highly recommended that Cluster members who are importing, exporting or operating bonded storage warehouses or rebate facilities make themselves fully aware of the new requirements prior to the Act being operational which will most likely be in 2015. Organised industry including those representing freight forwarders, depots, warehousemen, bulk liquid storage facilities, shipping lines and lines agents have prepared submissions to Customs on all aspects of the draft rules so far released.
dac@bmanalysts.com Unit 3 St Helier Office Park, Valdean Road, Gillitts PostNet Suite 10139, Private Bag X7005, Hillcrest, 3650
The Ports Regulator Release NPA Tariff Application for 2015/16 The Ports Regulator has released the Transnet National Port Authority’s (TNPA) application for an overall tariff increase of 9.47% for 2015 and a suggested increase of 15.91% in 2016 and 6.49% in the following year a total of 35.11% overall during the three years! The three year application is in line with the Regulators approved tariff methodology process. TNPA’s volume forecasts year on year average 2.4% for the three years. As a result of the “revenue requirement” budgeting system which the Regulator has approved lower volumes of cargo handled and therefore revenue result in higher tariffs.
LOGISTICS NEWSFLASH
It should be noted that since the introduction of the Port Regulator, the TNPA’s application has, on every occasion, been approved at lower levels than requested. With capital expenditure growing and volumes not increasing he may have some difficulty in keeping tariff increases in the next few years below inflation.
INTERNATIONAL NEWS India’s Automotive Industry on a Path to Growth By 2020, India is likely to overtake Thailand in global auto-export market share, according. Currently, auto exports from Thailand at US$24 billion are double that of India's US$12 billion but India's domestic market and its growth potential have been a big attraction for many global automakers. Now, several auto manufacturers are moving operations to India with an export focus as well. According to a report by Standard Chartered Bank, Hyundai plans to source engines for its global operations from India, Ford plans to make India its manufacturing hub for engines for the AsiaPacific region and Africa, and Volkswagen plans to increase sourcing from India to 70% of total global sourcing. Toyota and Suzuki are also increasingly using India as a sourcing hub for global requirements. Source: India export news via ftwoneesletters@nowmedia.co.za
Global Automotive Logistics Sector Facing Changes US demand has seen steady growth, assisted by an apparent recovery of the ‘Big Three’ manufacturers- Ford, GM and Chrysler- as well as expansion of production within the US by vehicle manufacturers from Japan, South Korea and Germany and the growing popularity of production in neighbouring Mexico. Emerging economies are also seeing rapid growth in domestic demand most keenly observed in China where demand has raced ahead of the capability of the existing logistics infrastructure. Growing adoption of digital technology in the supply chain will have a profound effect on existing logistics service providers who will find themselves dealing increasingly with more sophisticated and globalised demand from suppliers and vehicle manufacturers yet these headlines obscure longerterm trends. Whilst the most obvious of these is the vast expansion of China, other emerging
dac@bmanalysts.com Unit 3 St Helier Office Park, Valdean Road, Gillitts PostNet Suite 10139, Private Bag X7005, Hillcrest, 3650
markets are growing too. These developments present opportunities for logistics service providers but also major threats for incumbents who might find it hard to adapt. Vehicle manufacturers have to wrestle with production locations spread across the globe. These aim to satisfy as much local demand as they can but usually the vehicle manufacturers find they must augment this with substantial imports from elsewhere. This world of more movement and more complexity sounds ideal for logistics companies but whilst many of the largest have been positioning themselves to manage globalised supply chains the intensity and coverage required in the near future may well be more demanding. Many emerging markets from Russia and China to Brazil are difficult to do business in. Overcoming such hurdles will be the key to success for any global logistics service supplier if they are not to be displaced by local companies better connected in their domestic markets.
LOGISTICS NEWSFLASH
Source: logisticsbriefing@transportintelligence.com
Nigeria Automotive VS South Africa With foreign investment and favourable legislation, Nigeria could spring from automotive stagnation to overtake South Africa as the continent’s lead car manufacturing country, but the supply chain will be a major challenge. Nigeria’s once thriving domestic car assembly industry may soon be reborn after years of stagnation nearly brought it to the point of extinction. If the Nigerian government gets its way, vehicles stamped ‘Built-in-Nigeria’ may become the preferred choice for motorists once again, with new legislation intended to favour local assembly over mass imports. OEMs are already starting to invest in what is Africa’s biggest and fastest growing economy. Importers and distributors are looking to partner with carmakers to manufacture and sell vehicles locally. However, such a transition will be far from easy. The current market is dominated by used car sales and there may be resistance to the price rises that follow policies encouraging local production. Likewise, the industry in its present form has been protesting the changes, including maritime and port workers who currently handle the bulk of imports coming into the country. Should the policy take off, it seems likely that Nigeria will see a big drop in the roughly 200,000 (mainly used) cars that it imports every year. It could, however, see a rise in the import of knockdown kits and, eventually, a bump in exports. Source: Automotive Logistics Magazine
If Durban Automotive Cluster (DAC) member firms have additional queries, please do not hesitate to contact the DAC on 031 764 6100 or dac@bmanalysts.com.
Durban Automotive Cluster Logistics Team dac@bmanalysts.com Unit 3 St Helier Office Park, Valdean Road, Gillitts PostNet Suite 10139, Private Bag X7005, Hillcrest, 3650