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South Africa Ocean Logistics Outlook

A look at the key challenges facing importers and exporters in South Africa right now and DB Schenker’s top tips for working through these obstacles and planning for the future.

As the world continues to combat the COVID-19 pandemic and its related impacts, the ocean transportation sector in South Africa is facing many of the same challenges as other countries right now. From port labor shortages to a lack of capacity to port congestion, these and other obstacles are creating significant kinks in the supply chains that carry product to and from South African ports.

Based in Durban, Troye Summerford, Director Ocean Freight at DB Schenker in South Africa, says civil disorder in the region has exacerbated logistics problems in the country, where gaining access to ocean freighter capacity has become increasingly difficult. “The recent political unrest has created more bottlenecks at the major ports in South Africa, and particularly in Durban,” Summerford explains. While the situation is stable at present, the backlog has been slow to clear, adding to the exorbitant work load placed on all facets of the import and export process. However, DB Schenker’s agility – given its successful setup in the country for more than 59 years –  has been critical in reacting quickly to customers’ requirements in the current dynamic market.

With some larger vessels being repositioned to handle more prominent trade lanes like China-US and China-Europe, many importers have been relegated to using smaller vessels with capacities as low as 6,000 TEUs versus a more typical 10,000 TEUs and above. This directly impacted core routes like China-South Africa and Europe-South Africa, and limited South African shippers’ export capacities for minerals, chrome ores, and other products.

Anticipating and Managing Challenges
Knowing that shippers rely on ocean capacity to ship their products to and from South Africa, DB Schenker made some early pivots as soon as it recognized a potential import-export imbalance. It also informed its customers about the potential issues even before those problems were publicized, and began helping them secure capacity through its wide, global network of ocean carriers.

DB Schenker also urged shippers to think further ahead when planning their transportation, knowing that a shipment that once took a day or two to provision might now require up to eight weeks (or more) to secure capacity for. “We helped companies better address their inventory and demand planning,” says Summerford, “both of which have since become the norm.”

For importers, in particular, the global logistics providers helped them understand that anyone who was used to ordering goods on 60-day lead times had to prepare themselves to wait up to twice as long for those orders. “We urged our customers to review their forecasts and order lead times, and then plan accordingly,” says Summerford. When the Delta COVID wave was impacting India, for instance, these insights helped South African companies to continue operating while also planning ahead.

5 Tips for Success
With port congestion, capacity shortages, and labor issues continuing to impact the world’s ocean carriers, shippers need help navigating these complexities, managing current challenges, and planning for a successful future. Here are five tips that Mary-Anne Oldfield, DB Schenker’s Commercial Director, South Africa, advises companies to follow as they address these issues:

  1. Use solid forecasting. The days when you could “guess” at your company’s needs, estimate order quantities and/or place orders with short lead times are gone, at least for now. Through good forecasting and demand planning, companies can offset the longer lead times and supply chain shortages while ensuring a steady source of supply for themselves and/or their customers.
  2. Leverage analytics. The process of discovering, interpreting, and communicating significant patterns in data, analytics help companies improve their procurement, inventory management, order management, warehouse management and fulfillment, and transportation management (including shipping) processes in any business condition. During the current uncertainty, having these numbers at your fingertips and ready to use has become more critical than ever. “At DB Schenker, we continually use analytics to rethink lead times and adjust to the marketplace volatility,” says Oldfield.
  3. Stay informed and understand the knock-on effects. This isn’t the time to bury your head in the sand and hope the kinks in the supply chain and worldwide transportation issues work themselves out. By staying informed on current trends and understanding the trickle-down effect of events like the Ever Given’s blockage of the Suez Canal, companies can effectively prepare themselves for what’s ahead. “When the containers don't move into the right places at the right times, the problems just get compounded, and South African shippers may be impacted,” says Oldfield, “even when the disruption is taking place halfway around the world.”
  4. Visibility is key; know where your cargo is. Supply chain visibility has been necessary, but it’s now become table stakes in the current shipping environment. Customers want their orders quickly, and manufacturers need raw materials to get those orders made and fulfilled. Without good shipment visibility, meeting these demands is nearly impossible. DB Schenker leverages a full suite of visibility tools—including a portal, tracking devices, and eSchenker, to name just a few—that help accurately answer the “Where’s my stuff?” questions 24/7. Such visibility allows companies to pivot quickly when needed, make last-minute changes to their transportation plans and convert cargo over to other modes as needed.
  5. Think ahead and explore the unexplored. Throughout the pandemic, companies have had to reimagine their supply chains and come up with creative ways to manage volatility. Where they may have traditionally used a specific mode, carrier, or container type to ship their goods, shippers are thinking ahead and exploring the unexplored. Fast-moving products that are in short supply, for instance, may be best transported via less-than-containerload (LCL) in order to ensure a faster turnaround time. “Companies that aren’t exploring different options and staying open to doing things differently,” says Oldfield, “may find themselves dealing with stoppages within their supply chains.”

Success and Longevity of the Supply Chain
Throughout the pandemic, Summerford says not a single DB Schenker South Africa victory or success was achieved individually. It took a collaborative effort across carriers like MSC, Hapag-Lloyd, and CMA (as first-tier carriers) plus Evergreen, COSCO, and PIL (second and third-tier carriers) for everything to come together. Strong customer relationships and collaboration were equally as critical.

“None of this would have worked without the strong relationships we’ve developed and the way we can bring our problems to these providers and have them resolved on behalf of our customers,” says Summerford, whose team is now looking ahead to 2022 and working to further solidify those valued relationships.

“The relationship and partnership that exists between DB Schenker and its customers must be based on transparency, communication, and commitment,” Summerford concludes, “all of which are critical to the success and longevity of the supply chain.”