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Trade Winds weekly update volume 14

Chirundu 24/7, One of, if not, the most problematic borders on the important North-South Corridor into the copper belt area of Zambia and the DRC last night, told the Federation of East and Southern African Road Transport Associations (Fesarta) that it was open on a 24/7 basis. This comes after previous investigations earlier in the year showed that the border could and should operate at 24 hours seven days a week.

However, the investigations earlier in the year were not actually meant for the border to operate at this level but rather to identify challenges preventing the Zambezi crossing between Zimbabwe and Zambia from returning to previously established OSBP (One Stop Border Post) systems and services.

Mike Fitzmaurice, CEO of FESARTA said the following: “We looked at what it would take to make things work and spoke to officers and customs officials. We found that there’s enough will to make it work and received commitment from all parties concerned to solve Chirundu’s congestion issues.”

The 24/7 decision is effective immediately – and while 24/7 operations were still at a tentative stage, the remainder of the year would be used to fine-tune legal-technical aspects of the OSBP.

Fitzmaurice said it was reassuring that the recommendations made to Zimra and the ZRA following January’s fact-finding mission had been taken to heart, and that it was hoped Chirundu would in time be restored to the OSBP it used to be about 10 years ago.

Congestion strikes Beitbridge again, earlier in the week queues stretching around 8kms formed again south of Beitbridge as ZIMRA has ramped up their game on preventing groceries bought in South Africa being smuggled north across the border. The queue had reduced a bit as earlier in the week it was reported to be around 12Kms however frustrations are still mounting, according to reports ZIMRA officials are searching each and every truck.

There has also been reports of police taking this opportunity to exploit drivers of a reported R500 to jump the queue.

In addition to Zimra’s decision to tighten up on truck checking, staff working for the revenue authority also decided to embark on a go-slow for reasons unexplained.

Another growing concern is the safety of the drivers and in fact other road users, the drivers don’t get to sleep for around 2 days as the queue slowly crawls and once they have been released the drivers are extremely tired and exhausted from not having a good nights rest, thus putting potential dangers to themselves and other road users.

Federation of East and Southern African Road Transport Associations (Fesarta) has been in contact with ZIMRA officials in a bid to clear the congestion.

“There are better ways to deal with smuggling. Checking each and every truck causes massive delays and forces drivers to sit in their trucks for days waiting to get through the border. By the time they finally get through they’re unfit to drive.” Fitzmaurice said.

This is just adding further pressure to all parties involved, drivers are missing deadlines, hauliers are being charged demurrage and projects on the receiving end are being delayed.

JUST IN! following yesterday’s announcement of the 6pm-6am curfew, the slow chug of traffic through Zimra’s facility has been slowed even more, especially because the Documents Processing Centre (DPC) is only working 12 hours a day.

“In other words you have a 24-hour border with the DPC only running for half that,” said Mike Fitzmaurice, chief executive of the Federation of East and Southern African Road Transport Associations (Fesarta).

Earlier Fitzmaurice said Zimra was currently only managing about 30 trucks and hour, yet around 1000 trucks head to that border every day.

At the going rate it means only some 360 trucks are processed and cleared daily, while more and more trucks join the growing queue.

Zimra has just advised that the situation at the DPC centres was being addressed with government. But in view of the curfew introduced yesterday as an emergency restriction to curb the spread of the virus they had no choice but to comply.

They are appealing the ruling to allow DPC to continue working 24 hours but can give no time frame to the resolution of the situation.

Freight industry on its knees, As the industry continues to battle the full extent of Covid-19, the South African Association of Freight Forwarders (Saaff) has provided stats that reveal the extent of the damage.

Saaff estimates that local importers are facing around R1.4 billion in storage and demurrage costs accumulated during level-5 lockdown and more than 20 000 containers piling up in storage facilities whilst continued border congestions add to this burden.

“Road freight in this country is on its knees,” says Marcus Ellappan, director of road freight for Bidvest International Logistics (BIL). “There’s a regional imbalance of freight due to the decline in the economy, which means hauliers are battling to generate revenue, let alone operate profitably, especially on return loads. The protests by truck drivers against the hiring of foreign nationals are impacting utilisation of assets, which also impacts negatively on profitability. Some hauliers are now downsizing fleets as trucks stand idle, and with that jobs are being lost.”

COVID compliance is another nail in the coffin for the freight industry whilst the increase of PPE hijackings adds more pressure.

Light at the end of the tunnel, DRC announced that the state of emergency has been lifted, people in the Democratic Republic of Congo are slowly resuming normal activities in the wake of Covid-19 health emergency.

President Tshisekedi has ordered a three-stage reopening of business activities, schools, and borders.

In a televised address late on Tuesday, President Felix Tshisekedi announced an end to the Covid-19 health emergency enforced since 24 March.

This involved closing DRC’s borders with nine neighbouring countries, as well as shutting down schools, bars and restaurants.

Tshisekedi said that, from Wednesday 22 July, all shops, banks, restaurants, cafes, firms and bars would be allowed to reopen. Public transport can resume, and large gatherings will be permitted.

Back on Track, The Port of Cape Town is making headway in addressing its congestion challenges and is well on track clawing back lost ground.

Following staff shortages, lockdown congestions and backlogs, rough seas and stormy weather the port is back on track. 

Information shared earlier revealed that at the Cape Town Container Terminal (CTCT) five vessels were in roadstead and that there were six vessels waiting to be worked. That figure is at least half of what it once was, when up to 12 vessels could be seen at anchorage, waiting for much-delayed berthing slots.

There are still gangs serving the terminal and the target of 2500 moves per day was smashed yesterday when at least 3200 moves were recorded. This is great news for the port.

The Multi-Purpose Terminal (MPT) too is doing well, with two mobile cranes and six straddle carriers in full operation.

At the time of this morning’s stakeholder session, three vessels had been worked and delays are said to be only two days.

“A champion is defined not by their wins but by how they can recover when they fall.”

Trade Winds weekly update volume 13

Transport strike, following last weeks’ violent strikes and protests, things have calmed down this week, the All Truck Drivers’ Foundation (ATDF) has said it is suspending protest activities against foreign nationals working in South Africa’s road freight industry, there are rumours on the ground that a potential transport strike is still on the cards, however there is no confirmation from any reliable sources at this stage, following on this there has been bad weather on the N1 between Hanover and Richmond has been badly affected by a thick blanket of snow covering the upper Karoo.

Trucks who were forced to break suddenly jack knifed, there were reports of a few collisions too due to the ice on the roads.

Some industry representatives believe the weather has forced the ATDF’s hand in the matter, bringing welcome respite to transporters from the violent unrest seen on the country’s roads last week.

Cold Weather halts Cape Town Port’s streak, Efforts to claw back lost throughput at the Port of Cape Town following Covid-related essential staff shortages and subsequent cargo processing delays have been set back by the stormy weather that made landfall this past Monday.

The projected backlog clearance by end July is no longer feasible as bad weather continues to pummel the port. The latest projection is now early August.

The Multi-Purpose Terminal has been affected by swells and bad weather which only allowed one vessel to be worked so far. There has been swells recorded as high as 13 meters since the beginning of the week. There were 10 vessels awaiting berthing slots, nine had to lift anchors and retreat to safer waters.

The port itself was affected by seven-metre swells coming in, affecting quay-side vessels and necessitating immediate intervention from port personnel.

Five vessels had been unable to enter the port – and by noon Tuesday berthing was still on hold.

Transnet National Ports Authority (TNPA) said it would continue to test the swells and would allow vessels to enter the port once it was safe to do so.

Level 3.5?, this past Sunday, President Cyril Ramaphosa added new regulations to the already on going Level 3 of South Africa’s lockdown. Again, Alcohol has been prohibited which has been a major talking point, this not only affects the country’s already struggling economy but has also put a direct stop to South Africa’s wine exports. With the selling and distribution of alcohol being prohibited the transport has been banned too thus not allowing any of South Africa’s famous wines being shared around the world. Tobacco is still a no go; however, the export of tobacco has been allowed, this itself is a positive and hopefully can give the economy an extra life line.

ZMDC begins coal exploration, The Zimbabwe Mining Development Corporation has started coal and methane gas exploration in Lupane, Matabeleland North Province. Some years ago, the government allocated the parastatal two Special Grants to explore coal and methane gas.

“ZMDC found investors for the Special Grants and have since signed a joint venture agreement and now the investor is doing exploration.” Mines and Mining Development Deputy Minister Polite Kambamura said.

The project is a massive investment that would significantly transform Zimbabwe’s economy in sync with Vision 2030 where the government aims to achieve an upper-middle-income economy status.

The development of the Lupane coal-bed methane gas project has the potential to boost the country’s energy generation capacity. Zimbabwe requires an additional 9000MW of electricity to achieve an upper-middle-income by 2030 and currently, the country’s demand for power is around 2000MW.

“The bad news is time flies. The good news is you’re the pilot.”

Trade Winds weekly update volume 12

Transport violence, following growing concerns over the past week of a possible strike, violence has rocked the transport industry, mainly the focus is on local hauliers that a sporting foreign drivers. On Monday the National Bargaining Council for the Road Freight and Logistics Industry (NBCRFLI) managed to win a court interdict preventing the All Truck Drivers’ Foundation (ATDF) and the SA National Cargo Transport Association (Sancatra) from fomenting xenophobic violence.

A statement issued by the bargaining council’s national secretary, Musa Ndlovu, said the court had granted the NBCRFLI an interdict against the ATDF and Sancatra, preventing them from “organising, encouraging and inciting any other person to participate in protest action or ‘national shutdown’ against the employment of foreign nationals in the road freight and logistics industry on 7 July 2020 or at any other time thereafter”.

However, this unfortunately did not deter some protesters as quite a number of vehicles have been attacked and torched in the process, there were a few “hotspots” in Johannesburg that resulted in freight companies closing their depots.  

Fesarta released the following message they had received: “Attention all SADC truck drivers – South Africa must fall now.

“Zambia, Mozambique, Zimbabwe, DRC, Nigeria, Tanzania, Swaziland – from Friday, 10 July, no South African-registered trucks are to cross any of these countries.”

The message calls for drivers from neighbouring countries to block borders into South Africa as well as requesting South African drivers working cross-border to leave.

“Go back to your country and join Sipho Zungu (ATDF leader) and all other South African hooligans.”

Beitbridge border closure, Beitbridge was closed as of noon yesterday due to a positive COVID case. Initially it was only on the SA side offices that had closed and were being fumigated, any truck that was on SA side or in queue to cross could not move further, today rumours were rife that the border post will be closed for up to 72hours so that a complete fumigation can take place.

Officials are demanding that they be tested prior to returning to work, SARS and management are in talks to come to an agreement. We can confirm that drivers are not being processed at the moment, and no trucks are moving.

Cape Town Port running hot, with the latest —– that took place over the past week at Cape Town Port, the port is now seeing great success from these implementations, so much that the Covid-related cargo build-up could soon be a thing of the past.

Speaking during a webinar, Terry Gale who chairs the Exporters’ Club of the Western Cape (ECWC) said industry reckoned that by the end of the month the backlog should be overcome.

“When the lockdown started we used to have 15-16 vessels at anchorage, with delays lasting for 14-15 days. Some of the delays were a TBA-situation (to be announced).”

Now, with Transnet and private sector freight representatives meeting twice weekly to deliver solutions for slow processing, the port could soon receive direct calls from the same shipping lines who only a few weeks ago started bypassing the port, electing instead to tranship cargo destined for Cape Town at Port Elizabeth.

“We have six gangs – the teams required to operate specialised assets – where we started off with one. Transnet is also training new teams to come on board.”

As for the berths, two were fully operational, meaning imports and exports could move a lot more quickly, and expectations were that a third could soon be back on line.” Said Gale.

More meetings with public-private stakeholders are still required to fully co-ordinate the way forward.

Metals and Engineering sector get the nod, The Steel and Engineering Industries Federation of Southern Africa (Seifsa) has voiced strong support for government’s decision to support the sector which has taken huge strain as an increased global demand and high price hikes affected both raw materials and finished products due to the COVID pandemic.

There is a global shortage of affordable, good-quality scrap metal amid a downturn in global manufacturing as the worldwide lockdowns continue.

“Trade and Industry Minister Ebrahim Patel’s directive to the International Trade Administration Commission of South Africa (Itac) to determine amendments to the Price Preference System guidelines to address the shortage was to be welcomed,” he said, adding that the interventions came at a time when the industry needed all the government support it could get to survive the Covid-19 pandemic and the resulting economic turmoil.

“As Seifsa, we have previously stated our support for the principle of the non-export of scrap metal and are heartened by the government’s decision to support the industry during this difficult time of the pandemic, even as we await a longer-term solution to protect the industry through possible taxes on scrap metal exports,” Nyatsumba said.

Seifsa, which represents 22 employer associations in the broad metals and engineering sector, has in the past supported an export tax on scrap metal due to challenges in the metal industry.

“Keep your face to the sunshine and you cannot see a shadow”.

Trade Winds weekly update volume 11

ZSE suspends operations, The Zimbabwe Stock Exchange advised that all operations have been suspended until further notice.

“Whilst we await the guidance from our regulators on the operational modalities going forward, we notify our stakeholders that trading has been suspended until further notice.” – statement issued by the Secretary for Information.

Brokers have been scrambling to find reasons to inform investors as to why their money has disappeared.

On a positive note, experts have advised that Zimbabwe can significantly narrow its debt if the country manages its vast natural resources in a sustainable manner although the COVID-19 pandemic has worsened Zimbabwe’s debt deficit.

Studies have shown that Zimbabwe holds 13million tonnes of Gold, 2.8 Billion tonnes of Platinum and 16.5million carats of Diamonds just to name a few precious resources.

Dr Moyo said, “with this natural wealth, the country could harness it for development without overly relying on erratic external flows”.   

Kopfontein delays continue, Freight flow at the Skilpadshek border is still taking a knock from COVID related issues, the border which is a vital access point connecting South Africa to Botswana and Namibia is facing continued delays as the Botswana health authorities continue with their inflexible coronavirus testing measures for all truck drivers entering the country which requires the drivers to wait up to 72hours for their results.

 Mike Fitzmaurice, chief executive of the Federation of East and Southern African Road Transport Associations (Fesarta) said that it doesn’t look like the situation is going to change anytime soon.

“Restrictive testing is a real problem at the border, using Kopfontein for alternative access into Botswana because it’s not as busy as Skilpadshek is also still inconvenient because a lot of trucks have to head back south towards the TAC once they have passed through the border.” Fitzmaurice said.

Further South, ATDF (The All Truck Driver’s Foundation) has denied that its organisation disrupted transport on South African roads and intimidated truck drivers, footage has emerged of two cars sporting ATDF banners, parked on the yellow chevron section of the Key Ridge compulsory truck stop between Marianhill Toll Plaza and Pietermaritzburg.

Sifiso Nyathi the national secretary of ATDF said they were just asking for donations from drivers to boost the struggling organisation’s coffers.

The Federation of East and Southern African Transport Associations (Fesarta) said: “There is a car with an ATDF banner stopping and checking trucks looking for foreign drivers, please be alert”

Nyathi rubbished these reports by saying “We weren’t stopping the truck. There is no stop street on the highway. We were only asking for money.”

It’s not the first time that the ATDF has been accused of intimidating truck drivers, especially on the N3 where scenes of violent arson attacks over the past few years, apparently in opposition to foreign nationals working in South Africa’s road transport sector, have sparked wide-scale xenophobic unrest, claiming lives, destroying property and making headlines the world over.

Assistance for Cape Town Port, twenty specialised employees from Durban Container Terminal have volunteered to assist with delays at Cape Town Port, the teams consists of driver articulated vehicles, rubber tyre gantry cranes and ship-to-shore crane drivers boasting over 100 years of collective work experience.

“Both the container and multi-purpose terminals at the Port of Cape Town have been operating at reduced capacity since the introduction of the lockdown regulations.

“However, with the easing of the lockdown, port activities have increased. The container terminal is currently operating at 60% and the multi-purpose terminal at 75% capacity.

“The portside, which is responsible for marine operations, is only operating at 60% human resource capacity, but is able to offer full marine services. Transnet added.

The team will assist in improving cargo movement and extra staff availability.

Acting chief operations officer at Transnet Port Terminals, Velile Dube, said: “Despite all the challenges, we have been able to reduce the number of vessels waiting at anchorage from 11 to five vessels today.

“We have managed to increase the number of gangs from four to five and are now receiving additional staff to help with shifts.”

Cape Town Port seems to be the only port battling with cargo movement, as the City continues to feel the effects of COVID mainly due to it being the epicentre of South Africa’s outbreak.

Settling the debt, one of Zambia’s major copper mines has committed to pay K8 million out of the K58 million it owes the Kitwe City Council.

On Wednesday afternoon, bailiffs paid the Mine a visit in trying to recover debt owed to the local authority, Copperbelt security rushed to the mine in a-bid to intercept the bailiffs but later all 3 parties entered a closed-door meeting.

Journalists were later addressed and were advised that an agreement had been reached on how the debt will be settled.

“The status is that the amount is K58 million. We have negotiated to pay in instalments and today (Wednesday), the mine will pay K8 million and the rest will be paid in instalments. That is the position,” Nundwe said.

“We must be willing to let go of the life we planned so as to have the life that is waiting for us”

Trade Winds weekly update volume 8

Huge costs, the result of level 5 lockdown has given importers a massive headache as the costs of storage and demurrage of containers sits at a staggering R1.4-billion. CEO of South African Association of Freight Forwarders (SAAF) David Logan is concerned at the amounts being invoiced by shipping lines to importers for storage especially that its for cargo that could not move during the early stages of lockdown.

“Saaff represents 294 South African companies in the international freight forwarding and customs broking arena, managing approximately 70% of the containerised and breakbulk freight moving in and out of South Africa’s sea ports, airports and land borders,” he says.

“The level of charges levied by ocean carriers has been a source of concern for many years, but in normal times there was some justification for this, as it was generally speaking relatively easy to clear and deliver containers within the free time allowed. Under these circumstances it was reasonable for the carriers to expect that their containers should be returned and put back into service without delay,” Logan said.

On the back of this, the delays at Cape Town port is now jeopardising South Africa’s exports, mainly to the United States. The situation which has lasted for two weeks now is due to Transnet being incapable of handling these delays, several freight liners have been caught on film queueing at anchorage waiting to enter the port. Last week it was reported that employees were asked to stay at home because of Cape Town being the epicentre of South Africa’s COVID outbreak, it seems that Transnet is hiding behind the COVID pandemic and not informing Importer, Exporters and transporters of what is going on.   

Bottlenecking at Beitbridge, since the delays from last week, it was decided to convert a container into a manual testing station that sits on the bridge over the Limpopo River however this has resulted in further delays at a bottleneck effect.

Mike Fitzmaurice, chief executive of the Federation of East and Southern African Road Transport Associations (Fesarta) said the following:

“The completion of forms, the fact that it takes around 15 minutes to test each driver – it all adds to delays.”

Last week he questioned why drivers weren’t encouraged to fill in the forms online.

Adding to this, there are other factors contributing to the delays now coming from ZIMRA’s Documented Processing Centres (DPC), all commercial bill of entries are being processed electronically and these are being processed at Harare, Masvingo and Bulawayo DPCs however Bulawayo’s DPC was recently closed as there was a confirmed COVID cases. Once these bills of entries are processed the trucks are then given the go-ahead to the port of entry/exit where authorities there only check for conformity.

Under normal circumstances, 600 haulage trucks use Beitbridge Border Post with 300 going either side but the average has increased to nearly 1 000 daily. The increase comes after other routes in Botswana and Mozambique have been closed off.

Power struggle, Copperbelt Energy Corporation (CEC) has accused the Zambian Government of trying to expropriate its assets. This comes after a feud involving CEC supplying Konkola Copper Mines with power, the government placed KCM under liquidation a year ago, and which has a $144 million unpaid electricity bill to state owned ZESCO. The state last week declared Copperbelt Energy Corp.’s electricity lines as a “common carrier,” which by law other companies are allowed to use them by paying a fee.

The energy regulator set a fee for using the infrastructure that’s about 30% of what CEC normally charges, the company said.

The decision has negatively impacted CEC and they are now on the brink of defaulting on all loans borrowed.

Tackling undervaluation, Zambian mining authorities have speculation that major mining companies within the country are submitting below par samples of the minerals they are mining in order to pay a less mining tax.

“The loss of revenue could amount to hundreds of thousands, or even millions of dollars per export, depending on the discrepancy in mineral grade between the sample and the consignment being exported,” Barnaby Mulenga, permanent secretary at the ministry of mines, said in a statement.

From 1 July mines ministry officials will start collecting samples from the various mines.

“Life is 10% what happens to you and 90% how you react to it.”