e i 5 w m b a b a F m i e w b TPT mobile app raises...

FREIGHT & TRADING WEEKLY

For import / export decision-makers FRIDAY 27 January 2017 NO. 2231

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Special feature –Bulk Cargo

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Special feature –Zimbabwe

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Transnet Port Terminals plans to expand its mobile app beyond its existing container and truck tracing features to include additional port operations systems that will improve its communications with port users.

But TPT has assured port users that its mobile application, SpotLight, has been developed to provide additional value to customers and not to replace traditional SMS and email notifications.

TPT ICT department IT portfolio manager, Adri Clayton, told transporters at a workshop briefing at the Port of Durban last week that

17300 users had downloaded the app over the past three months. However, she said the initial uptake had been slow as the parastatal had only marketed the app internally via email and call centre communcation with clients after its launch in July 2016.

“We understand that communications with our customers are not always as visible or as regular as

they want them to be so we have been working on an additional channel, besides SMS, email and the call centre,” she said.

Clayton added that port users could currently receive notifications on the app of congestion or operational issues in the ports of Richards Bay, Cape Town and Durban’s Pier 1 and 2 – and all other terminals would

be added in future. TPT would also later be able to send personalised messages, such as notifications to collect containers, directly to businesses. Transporters can view details about vessels currently working in terminals and track and trace containers and trucks within the port queuing system as the app pulls data directly from the Navis system.

Weather conditions, sourced from weather stations at the terminals, are also accessible via the app.

TPT regional manager for Pier 1 and 2, Thulani Dlamini, said the app would help to address congestion concerns in the port.

“The frustration with our clients, specifically the trucking industry, is

TPT mobile app raises the communication bar

To page 20

The 45th president of the United States, Donald Trump, made it clear in his inauguration speech on Friday that “every decision on trade, on taxes, on immigration, on foreign affairs will be made to benefit American workers and American families”.

“We will follow two simple rules: Buy American and hire American,” commented Trump, confirming speculation by analysts that imports into the US could be dramatically curbed.

Minister of Finance Pravin Gordhan noted during a

panel discussion at last week’s World Economic Forum in Davos, Switzerland: “The African continent’s position is: don’t damage trade. Don’t damage the growth potential in developing countries which is crucial to inclusivity. These are the expectations the new administration needs to hear.”

US Embassy in South Africa spokesperson, Cynthia Harvey, said the embassy was looking forward to strengthening the partnership between the South African and American people, governments and businesses in the years to come.

An end to globalisation?

US president Donald Trump flanked by first lady Melania and former presidential couple, Barack and Michelle Obama.

2 | FRIDAY January 27 2017

DUTY CALLS Riaan de Lange ([email protected])FREIGHT & TRADING WEEKLY

Publisher Anton Marsh

EditorialEditor Joy OrlekConsulting Editor Alan PeatAssistant Editor Liesl VenterDeputy Editor Adele MackenziePhotographer Shannon Van Zyl

CorrespondentsAfrica/ Port Elizabeth Ed Richardson Tel: (041) 582 3750Swaziland James Hall

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These statements have been edited because of space constraints. For the full versions go to ftwonline.co.za. Note: This is a non-comprehensive statement of the law. No liability can be accepted for errors and omissions.

Online

Audit Bureau of Circulationsof South Africa

transparency you can see

Preferential Rules of OriginThe World Customs Organisation (WCO) on January 16 announced the release of ANNEX III (Table HS 2012 – 2017) to the ‘WCO Guide for Technical Update of Preferential Rules of Origin – How to update the existing Preferential Rules of Origin’. The update reflects the recent changes in the Harmonised System (HS) 2012 - 2017 correlation tables.

Tax Administration Laws ActOn January 19 the Tax Administration Laws Amendment Act (No 16 of 2016) was promulgated. It amends the provisions of the Customs and Excise Act, 1964, by (i) narrowing the scope of provisions relating to Special Economic Zones (SEZ) and aligning the terminology with that in the SEZ Act, 2014; (ii) broadening the scope of provisions relating to marking, tracking and tracing of tobacco products

and makes certain changes relating to the maximum allowed weight of cigarettes for import or manufacturing; (iii) aligning the prescription period for refunds to the general prescription period of three years; and (iv) making changes to provisions relating to the payment and calculation of interest on outstanding amounts.

Tax Laws Amendment ActTwo amendments were promulgated in the Act (No 15 of 2016). The first, the insertion of Section 119A to the Act, 1964, “Arrangements for obtaining undue tax benefits” under Chapter XII “General”; and second that every tariff amendment during the period 01 September 2015, up to and including 30 September 2016, shall not lapse.

TFA – 3 to goOn January 20 Nigeria became the 107th World Trade Organisation (WTO) member

to ratify the Trade Facilitation Agreement (TFA), requiring only three more ratifications for the TFA to enter into force.

TF Online RepositoryThe United Nations Conference on Trade and Development (Unctad) on January 17, with the imminent entry into force of the WTO’s TFA, announced the launch of the new multilingual version of the UN Online Repository for National Trade Facilitation bodies.

Its release is very opportune with the International Forum for National Trade Facilitation Committees scheduled in Geneva, Switzerland, from January 23-27.

The 155th HS Contracting PartyBurundi, since October 20 1964 a WCO member, on January 18 became the 155th contracting party to the International Convention on the Harmonised Commodity Description and Coding System, also known as the HS.

5th Supply Chain Finance SummitThe International Chamber of Commerce (ICC) will hold its next Supply Chain Finance Summit in Singapore, from March 2-3. The summit serves as a global platform to exchange insights and ideas on the latest developments and challenges in the supply chain process.

Duty Calls Watch ListComment on (i) the application for the rebate provision for used clothing is due by January 27; and (ii) the draft Regulations on Mediation Rules in terms of the Protection of Investment Act, 2015 is due by January 29.

FRIDAY January 27 2017 | 3

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The R84-billion Modderfontein New City project plans – which include a trade and logistics park and light industry park – have made headway, with the Centenary access road completed and services installed.

Ayanda Khumalo, spokesperson for Zendai Development South Africa (ZDSA) – the Chinese-owned company developing the 1 600-hectare parcel of land in Johannesburg’s East Rand – told FTW that while the development plans had been re-submitted to the Ekurhuleni municipality for approval, following suggested amendments, certain infrastructural elements were currently being put in place.

“We want to ensure we are ready to begin construction once we get the green light,” she said, pointing out that

traffic impact assessments were also near completion.

While developers hope to complete construction of the project – which allows for commercial, industrial and residential development – within 20 years of its 2014 conception, Khumalo admitted that this might be too ambitious. “There are so many

aspects of the project, which are all subject to approval, that we haven’t set any hard and fast completion dates as yet.”

She confirmed that the Modderfontein development had also been identified as a base for the Zendai group to pursue future expansion in South Africa and other countries in Africa.

Modderfontein logistics park plans make headway

Pic credit: ZDSA

The Modderfontein New City master plan. Another tender scam

FTW received a request via email earlier this month inviting interested parties to submit a tender to Zendai Development South Africa (ZDSA) for consulting and contracting services for the Modderfontein New City project.

The email asks interested parties to buy bid documents for a non-refundable fee of R5 000 to be considered for evaluation. ZDSA has not sent out any such emails or request for proposals and has advised interested parties not to respond. “We also strongly advise recipients not to open the email as it may contain malware,” said ZDSA’s Ayanda Khumalo.

The World Customs Organisation (WCO) is achieving results in its fight against fake medicines on the African continent.

In conjunction with the International Institute for Research Against Counterfeit Medicines (IRACM), a record 113 million illicit and potentially dangerous pharmaceutical products were seized as part of Operation ACIM (Action against Counterfeit and Illicit Medicines) in September last year.

Over the past four years, four operations have been undertaken during which nearly 900 million pharmaceutical products have been seized.

Operation ACIM mobilised 16 African customs administrations over a ten-day period to inspect simultaneously in the main ports on the continent cargoes identified as likely to contain illicit products.

Customs crackdown on fake medicines

Logistics and trade park

Light industry park


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Exchange rate volatility has created some of the biggest challenges for the stone fruit industry which has seen highs and lows in market growth over the past year.

“Our weak exchange rate translates into huge increases in production costs while volatility creates a lot of uncertainty and makes future planning very challenging,” says Hortgro GM: trade & markets, Jacques du Preez.

The industry has produced good quality fruit in general, according to Du Preez who points out that the stone fruit industry largely escaped the impact of the severe drought with most of the production confined to the Western Cape. Certain production regions in the province are however heading towards challenging times in terms of irrigation water scarcity and management, he says.

“Apricot export volumes were up 11%

on the previous season – despite

a challenging environment in terms of marketing – while peach exports on the

other hand were down 1-2% on the back of low demand abroad and locally for dessert peaches, which put prices under pressure.

“But the nectarine season has been positive with demand almost outstripping supply,” he says. “We expect to export 4% more nectarines. And as we move towards the peak harvesting weeks for plums, cultivars are following a good timing pattern this year which means more even, stable supply. We expect plum exports to increase to 12.28m cartons (+11%).”

The EU and UK have been traditional markets for SA perishable exporters in the past, but diversification is key to future growth.

“There has been a trend

over the last couple of years to increase exports to the Middle East,” says Du Preez. “This however does not imply that we are selling less fruit to our traditional European markets, but rather that

the increased production and export has been directed towards this market.

“The East also holds medium- to long-term opportunities, but the logistical and cold treatment requirements in these

markets are a big challenge,” he adds.

And while the world awaits the next Brexit move, Du Preez does not foresee any drastic changes to the status quo in terms of SA exports. “We are however unsure exactly what the implications of Brexit will be.”– Joy Orlek

Stone fruit exporters continue to explore market diversification

Certain production regions are heading towards challenging times in terms of irrigation, water scarcity and management.– Jacques du Preez

“A government export incentive scheme earned 66 215 tobacco growers US$29 346 897 for the 2016 season, according to Zimbabwe Reserve Bank governor Dr JP Mangudya.

“In order to incentivise tobacco growers to increase production, as well as promote financial inclusion, the bank awarded a 5% export incentive to tobacco growers payable through normal banking channels,” he said in a January statement.

The farmers sold green leaf tobacco valued at US$588 185 486, according to the governor.

Total tobacco exports of 164.5 million kilograms in 2016 were worth around US$933 million, with exports going to 65 countries at an average price of US$5.67 a kilogram, according to the Tobacco Industry Marketing Board (TIMB).

The incentives are having the desired effect, with a 15% increase in the number of registered tobacco growers for the 2017 season, according to the TIMB.

Incentives light up tobacco exports

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Despite the socio-economic challenges facing Zimbabwe, freight

keeps flowing across the borders.

The country is served by four trade corridors – which, in turn, connect neighbouring countries to each other and the world.

Transporters and logistics companies will be carefully monitoring opportunities and threats as shippers take advantage of improvements in the Beira and Walvis Bay routes in particular.

At present some 71% of Zimbabwean exports go to or through South Africa, with 38% of imports by value coming from South Africa, according to the International Trade Centre.

Durban remains the port of choice, with just 15% of exports bound for or transiting through Mozambique, and 2.8% of imports coming from or through the neighbour.

This despite the fact that the distance between Harare and Beira is only 562 kilometres, while that between Harare and Durban it is 1 683km.

Efforts to promote the port of Beira received a boost in 2016 with the launch in Zimbabwe of the SADC-PIDA

Acceleration Programme.The Programme for

Infrastructure Development in Africa (Pida) has identified the Beira corridor as a vital access link between the port of Beira in Mozambique, and Mozambique’s interior, as well as the neighbouring landlocked countries of the Democratic Republic of Congo, Zimbabwe, Zambia and Malawi.

SADC ministers have approved a preliminary priority list of projects on both the Beira Development Corridor and North-South Corridor through the Kazungula border post, which will bypass Zimbabwe on the western transport routes from the DRC and Zambia through Botswana.

The projects include the upgrading of key border crossings to One-Stop Border Posts (OSBPs).

Border posts identified are Beitbridge, Kasumbalesa, Forbes/Machipanda, Plumtree/Ramakwebama, Zobue/Mwanza,

Nyamapanda/Cuchamano, and Martins Drift/Groblers Bridge.

Zimbabwean exporters are being urged to make use of alternatives to Durban.

Economics journalist Clemence Machadu wrote in the United Arab Emirates-based The National that exports to the UAE had been declining since 2011 due to inefficiencies in the

Zimbabwean logistics chains.“Zimbabwe has to

rethink its trade routes. As a landlocked country, the transport network that it is currently using is an obstacle to exports.

“While Zimbabwe’s main export to the UAE is diamonds, which tend to be transported by air, a cost-effective land route is critical for bulky goods such as livestock animals, raw hides, iron and steel, pipes and ferrochromium,” he wrote.

Problems include delays at Beitbridge and inland transport costs.

Walvis Bay is actively wooing Zimbabwean importers and exporters by the establishment of a US$3.4 million dry port within Walvis Bay harbour.

Construction of the 19 000-sqm dry port is reported to be 80% complete, and it is expected to be functional in the first half of 2017.

The project is headed up by Road Motor Services, a unit of the National Railways of Zimbabwe, in partnership with the Namibian Ports Authority.

It is estimated that importers and exporters could save 10 days in transit time to and from markets in Europe and the Americas compared to Beira and Durban, which are on the eastern seaboard.

Botswana and Zambia also have dry ports within Walvis Bay.

Dar es Salaam is also being promoted as an alternative, with Air Zimbabwe having recently resumed flights to the Tanzanian port city.

Beira and Walvis vie for a share of the pie

Port Distance Estimated driving time @ 45 km/hr

Border posts

Beira 562 km 13 hours 1

Maputo 1 288 km via SA 28 hours 2

Durban 1 683 km 37 hours 1

Walvis Bay 2 305 km via B8 (Plumtree) 2 306 via FrancisTown

51 hours 51 hours

2 2

Dar es Salaam 2 430 km 54 hours 2

Distances from Harare

Currently Durban is the port of choice but transporters and logistics companies will be carefully monitoring opportunities and threats as shippers take advantage of improvements in the Beira and Walvis Bay routes in particular.


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Fresh produce from Zimbabwe could soon be moving through South African and other ports in the region rather than by air, according to ZimTrade.

Zimbabwean farmers have been urged to adapt to changes in the market, where concerns about the carbon footprint of fresh produce that is flown to destinations in Europe is seeing a shift to sea freight, horticulture specialist Peter de Wit of the Dutch volunteer organisation PUM is quoted as saying in the organisation’s Zim Trading Post newsletter.

He said international businesses and consumers were placing more awareness on the environmental impact of freight forwarding services and were increasingly using greener services to transport the goods.

Seafreight is considered a

much greener transportation mode and has a higher carrying capacity.

“This paradigm shift started two years ago and presently 20-30% of global pea exports are being transported by sea. In the next two to three years, about 80% of horticultural export produce such as sugar snaps, mange tout, peaches and other stone fruits into Europe will be transported using seafreight,” he is quoted as saying.

The trend is creating opportunities for value-added logistics services.

Zimbabwean farmers have been urged to form cooperatives as most farms will not produce

enough to fill a container on their own.

“I urge exporters to form alliances to fill up containers as well to optimise routings and decrease delays at the harbour,” he added.

However, there is a risk of losing a whole container if the consignment exceeds Maximum Residue Limits (MRL).

The limits are based on the highest level of pesticide residues.

It was therefore important for Zimbabwe to invest in a laboratory that could conduct MRL checks as well as in infrastructure to handle sea-bound containers, he said.

Zim farmers go ‘green’ and opt for seafreight Foreign investors are being

wooed by the Zimbabwean government in order to help the country out of the economic doldrums.

Macro Economic Planning and Investment Promotion minister Obert Mpofu has said in a media statement that he aims to repair ties with Western capitals and to attract investors.

“The target is to achieve an investment level of 25% of the GDP. In this regard, the ministry has lined up investment road shows to Zimbabwe’s major investment source markets as well as the BRICS countries,” Mpofu said.

In addition, Finance and Economic Development Minister Patrick Chinamasa has said that the government is considering extending fiscal incentives to the manufacturing sector.

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The Zimbabwe Revenue Authority (Zimra) missed its collection target for the year by 4% on the back of a “stalling” local economy and weak global commodity prices.

Chairman of Zimra, Willia Bonyongwe, said that the agency had collected US$3.46 billion in taxes between January 1 and December 31, 2016 – compared to a target of $3.61 billion.

Bonyongwe said mining companies had paid only US$63 million in mineral royalties, well below the target of US$110 million. Mining – mainly gold, platinum and nickel – generates more than half of Zimbabwe’s export revenue.

While not disclosing the 2017 revenue target, Bonyongwe said the agency would automate its revenue collection operations and deploy “other measures” to improve revenue.

Zimra misses target

Land-locked Zimbabwe now has its own port – or a portion of a port in the form of a customs zone or dry port within the Walvis Bay harbour precinct.

Construction of the facility is now 80% complete.

It is the result of a Memorandum of Agreement signed between the governments of Zimbabwe and Namibia in June 2008.

A 50-year lease agreement for the 18 332sqm parcel of land was signed with Road Motor Services (RMS) in December 2009.

RMS is a subsidiary of the National Railways of Zimbabwe that runs haulage trucks.

The current monthly rent is the equivalent of R172 959, according to the Namibian Ports Authority (Namport).

The premises may be used for the purposes of establishing and operating a dry port, which is defined as “an inland intermodal terminal to operate as a centre for transhipment of sea cargo to inland destinations”.

Namport is promoting

Walvis Bay as a “natural gateway for regional trade, as it offers most landlocked countries in southern Africa direct trade links with the rest of the world, which makes the dry port excellently positioned.

“Dry ports are designed to improve trade from

those countries and also offer those sovereign nations a dedicated access to their market in the Port of Walvis Bay,” says Namport.

According to official figures Zimbabwe is moving around 2 500 tons of cargo a month through Walvis Bay.

These volumes are expected to increase when the dry port is completed.

The two main trucking routes are via Kazungula to the north and Plumtree in the centre of Zimbabwe.

The Plumtree route passes through Botswana, while there is a short Zambian stretch at the Kazungula crossing.

This route will become more efficient by the end of 2018 when a bridge and one-stop border post replace the current Kazungula ferries.

Walvis Bay provides gateway for Zimbabwean trade

Zimbabwe dry port in Walvis Bay.

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The logistics costs of exporting bulk and bagged minerals from Zimbabwe through Beira have been reduced by the pooling of resources within the J&J Africa group.

Independent Beira Logistics Terminals (IBLT) is working with the J&J trucking arms in Zimbabwe and Mozambique to provide cost-competitive and reliable transport, storage and shipping services from the mine to the quayside in Beira, says Aleksandrs Kucerovs, general manager of IBLT.

The result has been an increase in the volume of

bulk exports and imports handled by the dry port, which has all the equipment required to stuff or strip containers with bulk bags on site.

IBLT also handles the movement of bulk bags

to and from the port, as well the loading and offloading of trucks in a secure, bonded area.

Beira dry port helps reduce costs

Construction of the Kazungula Bridge, which will bypass a sliver of Zimbabwe and link Zambia and Botswana directly across the Zambezi River, is reported to be progressing on schedule.

Kazungula is where Zambia, Zimbabwe, Botswana and Namibia nominally meet.

Traffic is expected to start flowing on the US$163-million Kazungula Bridge by December 2018.

It is a joint project of the

governments of Zambia and Zimbabwe, with construction being carried out by Daewoo

of South Korea. Transit

times will be significantly reduced as hauliers will no longer have to queue for ferries or pass through Zimbabwean customs.

Zimbabwe has been accused of trying to “sabotage” the

project because it will lose out on the revenue it generates through tollgates at the border post.

There is also the likelihood

that traffic between the Democratic Republic of Congo and western Zambia to South Africa will be rerouted through Botswana from Zimbabwe.

“There is no boundary between Botswana and Zambia. If they want to build a bridge on that piece of land, Zimbabwe has to be involved,” Zimbabwean transport minister Obert Mpofu told parliament in 2014.

However, work started on the bridge a few months later.

It will be served by a one-stop border post which is being built by Anhui Foreign Economic Construction Group Company Limited of China (AFECC).

The post will be on the Zambian side of the border.

Kazungula bridge will bypass Zimbabwe

Zimbabwe has been accused of trying to “sabotage” the project because it will lose out on the revenue it generates through tollgates.

“Aleksandrs Kucerovs, general manager of IBLT.

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Export high – Dec 1996 US$2 496m

Export low – may 2015 US$137.5m

Top export destinations 2015

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Source: CIA World Factbook

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Some 48.1% of Zimbabwean imports come from South Africa,

according to the CIA World Factbook.

Zambia is the second-biggest African exporter to Zimbabwe, with a 4.2% market share.

In 2015 the African share of exports to Zimbabwe was worth around US$3 billion.

Asian trade partners accounted for 41.5% of imports, with 5.8% of goods in value originating from European Union countries.

China is the dominant supplier, with a 12.1% market share, followed by India at 5.2%.

A smaller percentage came from North American exporters. Zimbabwean imports of US$6 billion in 2015 represent a drop of 30.2%

since 2011 and 5.9% between 2014 and 2015.

The CIA World Factbook estimates that imports dropped from US$6.016bn in 2015 to US$5.738bn in 2016.

Zimbabwe’s top 10 imports accounted for almost three-fifths (71.3%) of the overall value of its product purchases from other countries.

Top imports 2015Oil: US$1.6 billion (26.4%

of total Zimbabwean imports).

Machines, engines, pumps: $559.4 million (9.3%).

Vehicles: $459.7 million (7.7%).

Cereals: $409.9 million (6.8%).

Electronic equipment: $403 million (6.7%).

Pharmaceuticals: $231.4 million (3.9%).

Plastics: $203.4 million (3.4%).

Fertilisers: $169 million (2.8%).

Animal/vegetable fats and oils: $137 million (2.3%).

Iron and steel: $122.8 million (2%).Zimbabwean exports

have also been declining, although estimates again differ.

Exports from Zimbabwe amounted to US$2.7 billion in 2015, down by 23% since 2011 and down by 11.7% from 2014 (US$3 billion), according to the Reserve Bank of Zimbabwe.

The World Factbook estimates that exports dropped from US$3.551 billion in 2015 to US$3.357 billion in 2016.

Trading Economics figures show that exports from Zimbabwe averaged US$561.33 million a month from 1993 until 2016, reaching an all-time high of US$2 496 million in December 1996 and a

record low of US$137.5m in May 2015.

In 2015 the country’s top export destinations were China 27.8%, Democratic Republic of the Congo 14%, Botswana 12.5%, and South Africa 7.6%, according to the CIA World Factbook.

The main exports were platinum, cotton, tobacco,

gold, ferroalloys, and textiles/clothing.

Reserve Bank figures show that there was a 70% growth in exports by the clothing sector between 2014 and 2015.

Zimbabwe’s top 10 exports accounted for 90.5% of the overall value of its global shipments.

Trade stats tell the sorry taleTop exports – 2015

1. Tobacco US$893.7 million 33.1%

2. Gems, precious metals: $846 million 31.3%

3. Ores, slag, ash: $228 million 8.4%

4. Iron and steel: $165 million 6.1%

5. Sugar: $101.8 million 3.8%

6. Cotton: $59.1 million 2.2%

7. Salt, sulphur, stone, cement: $58.3 million 2.2%

8. Oil: $41.5 million 1.5%

9. Wood: $31 million 1.1%

10. Coffee, tea and spices: $23.2 million 0.9%

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Ed Richardson

A nalysts are divided about the prospects for the

Zimbabwean economy.The Economist

Intelligence Unit predicts it will grow by an average of 3% between 2017 and 2021 – with room for more.

In its report on the country, the Economist says the “well below potential” 3% forecast “ref lects infrastructure and agricultural constraints and a poor business climate”.

It warns that the risk of sporadic unrest is also rising, in part because of the lack of political change (with the 92-year-old Robert Mugabe due to stand again in 2018).

After moving into negative territory in 2015,

inf lation is expected to average 5% a year in 2017-21, ref lecting commodity price trends and ongoing domestic wage demands.

The World Bank is more optimistic – predicting economic growth of 3.5% in 2017, followed by two years of 3.4% growth.

However, the International Monetary Fund (IMF) is predicting the economy will decline by 2.5% in 2017.

The forecast, made in the October 2016 IMF World Economic Outlook, would see Zimbabwe recording its first gross domestic product contraction since 2008, when the economy

shrank by 16.5% at the height of a hyperinf lation crisis.

Zimbabwe’s economy grew by an average 10.35% between 2009 and 2012

after dollarisation and under a power-sharing government between president Robert Mugabe and the opposition.

Growth started

tapering off with the collapse of the national unity government after Mugabe and his ZANU-PF party were re-elected in 2013 with a larger majority in a vote disputed by the opposition.

With most foreign

investors seeing the country as a major risk due to political uncertainty and the collapse of the infrastructure in large parts, there are no sustainable drivers for economic growth.

Urbanisation, which is contributing to growth and rising living standards elsewhere on the continent is minimal.

With formal sector unemployment widely believed to be running at over 80%, people are staying on the land in order to feed themselves.

As a result Zimbabwe is one of four African countries that are experiencing urban growth of less than 2%, according to the African Development Bank’s African Economic Outlook 2016.

The others are Djibouti, Mauritius and Swaziland.

Mixed messages over economic growth

Economist Intelligence Unit

3% 2017 - 2021

3.5%- 2017

3.4%2018-2019

World Bank

-2.5%2017

IMF

Despite the economic challenges facing the country, airfreight continues to move, says Gerd von Mansberg, country manager of ATC Aviation.

Air Zimbabwe provides regular links between Gauteng and Harare, Bulawayo and Victoria Falls for time- and temperature-sensitive cargo.

The company has

been the cargo general sales agent (GSA) for Air Zimbabwe for the past 13 years.

For the first 10 years it traded as The Cargo Connection.

“Currently there are 10 flights between OR Tambo and Harare International Airport a week, and four flights weekly each to Joshua Mqabuko Nkomo International Airport in Bulawayo and Victoria Falls

Airport,” he says.ATC and

Air Zimbabwe continually focus

on service delivery in order to help exporters and importers to continue operating.

A combination of B767 and A320 aircraft is used on the routes from South Africa. “Air Zimbabwe also has regional services and domestic services out of Harare which have cargo capacity.

Aifreight keeps moving despite challenges

Zimbabwe is one of four African countries that are experiencing urban growth of less than 2%.“

Gerd von Mansberg, country manager, ATC Aviation.

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Ed Richardson

Zimbabwe’s repayment of arrears owing to the International Monetary Fund’s

Poverty Reduction and Growth Trust (PRGT) is a first step towards the unfreezing of aid and loans to the country – but there is still a long way to go before import volumes start growing.

IMF “remedial measures” designed to encourage Zimbabwe to settle its arrears were lifted in December 2016,

after the country paid around US$107.9 million in October in what was in effect a paper transaction.

According to the IMF the Zimbabwean authorities cleared the arrears using the country’s SDR holdings.

“In doing this, Zimbabwe has simply transferred its SDR (Special Drawing Right) holdings in order to settle its obligations with the IMF. The arrears are not being paid with loans contracted by the Zimbabwean authorities.

“Notwithstanding the settlement of overdue financial obligations to the PRGT and the removal of remedial measures, consideration of

any future request for IMF financing would also require

Zimbabwe to comply with other applicable IMF policies,” says the IMF in a statement.

One of the conditions is that Zimbabwe resolve its arrears to other creditors.

The country still owes some US$1 156.7 million for loans from the International Bank for Reconstruction and Development (IBRD) and International Development Association (IDA), as well as US$632.5 million to the African Development Bank.

The biggest outstanding loan is US$1.16 billion from the World Bank.

Zimbabwe needs aids or loans to help revive the economy, which has been hit by a combination of insufficient policy adjustment, and exogenous shocks (a drought, lower commodity prices, and the appreciation of the US dollar), according to an IMF report.

“The resulting cash shortages have led the authorities to delay wage payments, restrict imports, require export surrenders, and announce the issuance of bond notes backed by an external credit facility.

“The extremely difficult situation has been exacerbated by political uncertainty, social unrest, and loss of confidence,” the report adds.

IMF arrears payment opens way for new support

Pictured on the Zimbabwe leg of the ‘Great Fruit Adventure’ is Max MacGillivray, who along with fellow explorer Gareth Jones undertook a three-month motorbike trip across Europe and Africa to help promote awareness around the consumption of fresh fruit and vegetables, especially amongst children.

Fruit South Africa

partnered with the two explorers whose epic journey began last November at New Spitalfields Market in London and reached southern Africa this month. Having visited various fruit and vegetable growers in Zimbabwe – amongst others – they are currently in South Africa and will end their journey in the Western Cape in early February.

Epic fruit adventure comes to Zim

Parliament has called on Treasury and the Ministry of Industry and Commerce to expedite the revival of the state-owned Zimbabwe Iron and Steel Company (Zisco).

Speaker of parliament Jacob Mudenda said last

week: “It is my fervent belief that the steel industry is the hub of accelerated industrial development in our country.”

ZiscoSteel became defunct eight years ago after a string of operational challenges forced it to close down.

Steel industry revival?

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While Zimbabwe’s June 2016 implementation of Statutory Instrument (SI) 64 – which saw the ban of a large number of imported goods – has seen a “small revival” in local production, the lack of “adequate foreign currency” is hampering growth.

“This is the worst time that we could have a liquidity crisis as we are unable to import raw material,” commented the president of the Confederation of Zimbabwe Industries (CZI), Busisa Moyo.

Addressing the media ahead of the CZI annual symposium this week, Moyo said Zimbabwe was

in a crisis. “It can’t be business as usual. Businesses are closing, applying for short time and laying off workers.”

He pointed out that the measures introduced to protect local

industry had seen several manufacturers increase production. Furthermore, there had been an increase in new companies setting up factories but, Moyo highlighted, these new

developments would not be sustainable without easy access to foreign currency

Zimbabwe National Chamber of Commerce president, Davison Norupiri, agreed that the policy change had seen increased local manufacturing investment.

“Government also launched the command agriculture programme and if we do justice to it, we will manage to feed ourselves,” he said, adding that the Zimbabwean government had introduced export incentives in the form of bond notes.

South African traders were hardest hit by the import ban as Zimbabwe remains one of the country’s top export markets on the continent.

Currency crisis scuttles import ban plan

This is the worst time that we could have a liquidity crisis as we are unable to import raw material.– Busisa Moyo

“

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Previously bagged cargo is now being moved in bulk into and out of Zimbabwe following the introduction of a bulk cargo service by J&J Transport Zimbabwe.

“We started experimenting with bulk cargo movements towards the end of 2015.

“J&J came up with the idea of moving cargo in bulk instead of bagging it. This saves the cost of bagging plus the cost of the bags and gives the customer a competitive edge in the market,” says Vikram Singh of J&J Transport Zimbabwe.

“The concept has taken off and volumes have steadily increased,” he says.

The company upgraded its trailers to handle the bulk cargo.

J&J Africa is also making use of the group’s network in the region to lower costs to customers by improving efficiencies and reducing

empty legs.Customers

have become more demanding owing to the competitive market conditions, he says.

Thanks to the J&J group’s investment in

tracking technology and the faster transit times, it is able to provide on-time delivery at competitive rates, he adds.

There is also ongoing investment in people as well as equipment. – Ed Richardson

New bulk cargo service trims costs

The concept has taken off and volumes have steadily increased.– Vikram Singh

“Volumes of local trade within Zimbabwe have increased following the introduction of the bond note by the central bank, according to Martin Hogg of TransmartAfrica.

While obtaining foreign exchange is challenging, companies are still importing as “Zimbabwe has become reliant on exports to meet over 90% of its needs,” he says.

This means that there are still opportunities for suppliers and shippers from South Africa, particularly those who take a long-term view of opportunities in the market.

“While SA suppliers should be tight with credit to Zimbabwe customers,

the fact is that it is relationships which keep this economy alive,” he says.

TransmartAfrica provides a weekly, designated date of delivery from Johannesburg to depots in Bulawayo and Harare.

The service is designed for smaller shipments, which are then consolidated.

In response to demand the company recently introduced a guaranteed weekly priority service.

It has also opened offices near the airport in Harare.

TransmartAfrica has its own forklifts on site, as well as its own f leet of trucks for local deliveries.

Bond note improves local trade

Zimbabwe imports around 80% of its cannabis from neighbouring countries, according to Wikileaks.

It cites reports that show that the main suppliers are Mozambique, Malawi and Zambia.

However, it is likely that the country is serving more as a supplier than user of the neighbouring crops – one of the factors that leads to border delays due to customs searches.

Weed Wiki estimates that around 50% of the cannabis grown in Zimbabwe or imported is destined to be shipped further on to Europe or elsewhere.

Grass is greener...


The hot topic of fake drivers’ licences – which has come to the fore in the wake of the shocking road safety statistics over the festive season – thankfully appears to be much less of an issue in the heavy duty vehicle market.

“If you’ve got the money you can get anything – including a fake licence,” says Freightliner Transport MD Kevin Martin.

“And while there are some companies who’ll hire a driver by his face, not many sane truck-owners would give the keys for a rig – and a load to deliver – to a stranger clutching a licence from

somewhere in the far bundu and a weather-beaten pile of copies of copies of references from truckers whose company names leave even Google puzzled,” says Martin.

You’ve got to test them. It’s that simple.

Or take it a step further as Martin does, and have a permanent driver trainer looking after the driver skills and certification in his f leet of rigs, short-hauling containers to-and-from the port and place of collection/delivery. “And the driver trainer has got to indulge his canine sense of smell and sniff out the truth of everything

documentary, and be able to apply a rubber stamp of approval…..or an axe!”

Then it’s time to get the driver behind the wheel. “And most companies will give the guy some sort of test. Our procedure is to identify how familiar he is with the controls and support systems in the cab – and what, why, when, where and how they do it; then press the starter to test his basic vehicle-handling in the yard. Manoeuvres with which he should be familiar and comfortable.”

During this and what is to follow, he is observed and guided by the trainer or

an experienced driver.Next comes the road test

over a route(s) chosen to cover the range of skills and challenges a driver faces in his day-to-day schedule.

And once again the stamp or the axe.

A driver trainer plays a cohesive role in assessing driver performance throughout the year, but also should encourage community in the team.

“The training and assessment programme should be carefully pre-planned and function well in practice,” said Martin. “Things like refresher courses are vital. They add more driver knowledge,

and erase any bad habits adopted.

“If your drivers are happy, you will be happy. That’s true," he added.

It has been proved in practice. “Drivers who are comfortable and f luid behind the wheel, and have the skills needed to be competent, significantly reduce a company’s accident rate.

“And when million is quite a common word in big vehicle collisions, the ability to reduce or even erase these costs could mean the difference between survival and a healthy future.” – Alan Peat

South African citrus growers have voiced their concern over the European Commission’s (EC) pending legislation with regard to false codling moth (FCM) on citrus.

The European Parliament in December voted in favour of a resolution calling on the Commission to introduce stricter measures on citrus imports and it will, if accepted, affect South African citrus exports significantly.

The legislation will also see stricter measures imposed for Citrus Black Spot (CBS).

South Africa has in the past 10 years shown its commitment to meeting EC regulations and demands with regard to CBS even though scientific research has proven that CBS fruit from South Africa cannot infect European crops.

According to Deon Joubert, Citrus Growers' Association (CGA) special envoy: market access and European Union (EU) matters, there is much

concern over the new developments.

“The pending legislation – especially in terms of FCM – is seemingly discriminatory against citrus since citrus is not even one of the biggest sources of interceptions regarding FCM in Europe annually,” he told FTW.

He said in addition to the regulations already in place the EC wanted to delete the derogation for citrus fruit processing with regard to

CBS, and to introduce a regulation for the first time on FCM.

“The measures suggested to combat FCM do not seem to be applicable to all the sources of FCM interceptions but are specifically geared

towards citrus,” said Joubert. “We have to ask when one looks at the suggested measures they want to impose – what is the real risk of FCM? We are not exporting propagation material which makes the regulation measurements seem excessive.”

He said the measure of

regulation needed to be consistent with the risk posed.

South African citrus in 2016 saw less than ten cases of FCM intercepted. Hardly comparable with the more than 77 to 87 cases intercepted from other countries in Africa on other products like capsicum and f lowers.

“One has to question why citrus is being targeted,” he said.

The new regulations will see compulsory cold treatment imposed on all citrus imported into the EU.

South African citrus exporters have said the call for compulsory cold treatment does not seem consistent with the small risk posed. They are hoping that the eventual EC vote on the new legislation – member states at the time of going to press remained in debate on the issue – will be balanced and reasonable while addressing the FCM risk evenly on all imported products.

“Cold-sterilisation has been around for 30 years and is considered old technology,” said Joubert. “There are far more effective measures to apply to give one the same level of protection or risk mitigation. Cold steri

treatments are applied after the fruit has been infected. The modern treatments available from the CRI’s impressive research programmes are environmentally friendly, highly effective prior to fruit infestation [proactive] and reduce FCM at source.”

As an example, South Africa in its attempts to mitigate CBS has seen the introduction of the latest and best proactive technologies. This saw only four cases of CBS intercepted in the country last year – considerably fewer than the more than 80 cases some ten years ago.

“Whether it’s CBS or FCM, as an industry we have proactive methods

in place that are green and highly effective. Our industry has worked extremely hard to comply with the EU regulations and in doing so we have introduced technologies and approaches that are working.”

He said it would be unreasonable for the commission to enforce draconian measures such as those being contemplated on one particular industry.

The measures are foreseen to come into force in 2018 if the EC accepts the new regulations shortly.

Joubert said it was still too early to say what South Africa’s course of action would be should the EC vote in favour of stricter measures.– Liesl Venter


The pending legislation ― especially in terms of false codling moth ― is seemingly discriminatory against citrus.– Deon Joubert

“

Pending new legislation raises concern for citrus exporters

Truck owners unlikely to be taken in by fake licences


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To what extent are political tensions in the Democratic Republic of Congo (DRC) affecting traders and logistics service providers?

That was the question that FTW put to the forwarding industry – and according to two executive contacts, they pulled out of business with the DRC years back. “It’s a hotbed of corruption,” said one, “and the infrastructure, both human and material, is almost invisible. Doing sound business with the DRC is near impossible. And it’s in such a poor state that business there is minimal.”

“It’s copper out and food in,” said the other. “That’s about it for DRC’s contribution to two-way trade. There’s just nothing there for us to get our teeth into. And I don’t think there are too many agencies doing any business there. So, political

tensions or not, I wouldn’t say there’s much impact on the forwarding industry.”

The latest trouble in DRC started in 2015, when major protests broke out across the country about the continued presidency of Joseph Kabila. They demanded that he step down.

He was constitutionally barred from participating in the planned 2016 elections, but these haven’t yet come off.

Last November, it was announced that no elections would be held in 2016, after president Kabila’s term of office ended on December 20. But he still hasn’t shifted, and public dissatisfaction has continued mounting – with dozens of protesters killed and hundreds arrested– Alan Peat

Traders shun ‘corrupt’ DRC – political tensions aside

Invest South Africa (InvestSA) – a division of the department of Trade and Industry (dti) – will launch a national One-Stop Shop (OSS) in Pretoria early this year and then roll it out to all provinces over the next three years

Head of InvestSA, Yunus Hoosen, said the OSS initiative had been

launched to attract and facilitate domestic and foreign direct investments by offering easier access to business processes.

Last year saw the launch of one multimillion-rand investment per month from January to December in the country.

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Alan Peat

Questions have been raised over whether Transnet’s “Youth Development Programme”, undertaken by its Maritime School of Excellence (MSoE), has delivered on its promises.

The school is headquartered in the port city of Durban, with satellite training centres in Port Elizabeth and Cape Town.

School entrants who were sold on the idea of becoming fully qualified seafarers are now suggesting that they may actually have been sold a pup.

The non-profit-making investigative journalist team amaBhungane recently reported that, while the students had been informed there were 40 positions available for training as general purpose ratings (GPRs), none had up to now obtained berths for sea-time. And this appeared to be not just confined to the GPR course. It was understood that cargo handling trainees had also had no proper practical training in the Durban port, with the current workforce said to be objecting because of their concerns about being replaced by these trainees.

AmaBhungane added that the class of 2016

was so dissatisfied that representatives had sent an e-mail message to Transnet CE Siyabonga Gama, laying out all the complaints about the programme, and claiming that Transnet “has misled us and has sold us false dreams”. But they received no response.

Detailed questions sent to Transnet late last year by AmaBhungane, and its claim that school students

were left twiddling their thumbs and effectively unemployable as qualified ratings, also went unaddressed by Transnet. All that it said was that an investigation into “concerns”

about the school was being conducted.

In a statement released to FTW, Transnet said it had “noted the concerns raised by some of the learners – these basically being: Access to practical training and the duration of the programme.”

And, it added: “The company views these in a serious light and has instituted an investigation into the allegations. The outcomes of the investigation will be used to enhance the school’s offering and will be shared with all relevant stakeholders once completed.”

It also said that it had “confirmed its commitment

to building and strengthening the country’s ocean economy” with a further intake of trainees for the school; that it had set aside what it said was “a record-breaking” R7.7bn for training over the next 10 years; and that it would continue with its skills development drive focusing on young South Africans.

Transnet also made it clear in its reply to FTW that the training provided did not automatically entitle a trainee to a job within the organisation. “The aim,” it said, “is to create capacity for Transnet and industry” – adding that it armed trainees “with both the theory and experience to participate in the oceans economy” like shipping lines, cargo owners and freight forwarders. However, it added, to date it had been able to absorb about 80% of the learners who had qualified.

But dissatisfied students in the starting class of 2014 seamanship courses have been quoted as claiming that, while they may have “graduated” from the school in 2016 as GPRs, this was only on the theoretical side. The vital sea time element, without which the certificate was worth nothing, had not yet transpired, they told amaBhungane.

A prominent maritime educational source in the private sector confirmed to FTW that most of the points made in the amaBhungane report had also independently circulated in the maritime training field.

Transnet and students at odds over ‘Youth Development Programme’

LAST WEEK’S TOP STORIES ON

Training provided does not automatically entitle a trainee to a job within the organisation.– Transnet

“

Only 50% of shippers outsource transportAround R270 billion is spent annually on outsourcing of transport and logistics services in South Africa. But chief business development and strategy officer at Imperial Logistics, Cobus Rossouw, believes this figure could be doubled.

New container line to take to the seasThe SM Line, formally launched last week by the South Korean construction company Samra Midas (SM) Group, intends to acquire 12 container ships in the first half of this year and start its liner business in March.

Line slaps on unexplained levyJapanese shipping line MOL has announced it will levy a general rate increase (GRI) on all cargo moving from Asia to Mexico and the West Coast South America.

Driving simulators to be introduced in next financial yearThe Road Traffic Infringement Agency (RTIA) is to implement a driving programme that will ensure learner drivers are given the opportunity to develop and enhance their driving skills.

Fuel prices to take another leap in February – AABased on the unaudited mid-month fuel price data released by the Central Energy Fund (CEF), the Automobile Association (AA) has predicted another hefty hike in fuel prices on the first Wednesday of next month (Feb 1).

Success of agri-sector impacts success of economyFormer finance minister Nhlanhla Nene has urged policy makers to focus on agriculture to boost the country’s ailing economy.

South Africa has signed a bilateral air services agreement (BASA) with Chad which includes one passenger and one all-cargo frequency per country.

The agreement was signed in Pretoria last Friday by the Minister of Transport, Dipuo Peters, and Minister of Civil Aviation and National Meteorology of Chad, Haoua Acyl Ahmat Aghabach.

Peters noted that although the agreement framework was initially restricted – not allowing for codeshare agreements – it would “bring opportunities that will grow

the aviation industry in both countries”.

“It is expected that Africa’s rapid population growth will continue, indicating a wide range of opportunities available to ensure the realisation of aviation industry growth,” she said.

Peters added that Africa needed to consolidate its own air transport market and industry in order to remain relevant. “Therefore, the individual African member states need to support the regional economic communities’ initiatives,” she said.

SA/Chad sign air cargo agreement


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TPT mobile app

when they come through to staging they really don’t have visibility of what stage the vehicle is at. Now this app says ‘your truck has been processed’ and you can actually see how long your truck has been there. When you engage with us we have a common platform so there is no confusion,” Dlamini said.

According to TPT statistics released to FTW the number of users of the track and trace feature checking on vessels, containers and trucks quadrupled in the last three months of 2016, with 18035 queries in October followed by 17691 in November and 17796 in December.

Dlamini said containers represented around 50% of the port’s business and the intention was to eventually extend the app to additional operations.

“We would like the app

to go as far as breakbulk; the intention is to extend it to the GCOS operating system,” he said.

Durban Harbour Carriers’ Association chairman Sue Moodley said she planned to promote the app to transporters.

“It is an excellent idea and there is also a lot that can be added. There is a lot that TNPA is doing in terms of the measurables of a truck from a point to a point,” Moodley said.

“It creates a lot of transparency for the transporter in that he is able to see exactly where his truck is on the app and turnaround times are visible to him. I would like to see smart port technology like Hops being integrated into it where the vessel and the trucks can speak to each other and that is exactly what they are working on at the moment,” she said.

From page 1

Alan Peat

The government’s technicolour-dream of a full-scale SA truck manufacturing industry is just not feasible in its current form, according to truck makers.

From information FTW obtained, based on industry deliberations, the conclusion amongst truck makers is that the government’s local content proposal for heavy trucks, aimed at value-addition and job-creation, is set to cause a massive and unsupportable increase in the cost of trucks; is financially unsound for manufacturers; and will not even achieve its objectives.

The manufacturers are convinced, and have research to prove it, that local content options are continually strained to the utmost to suck out as much as is financially and operationally feasible.

But the government’s latest proposals to increase local content are being conducted in a rather indiscriminate fashion, and do little but push up costs – ultimately seeing truck buyers paying considerably more.

And Craig Uren, MD of Isuzu Trucks SA, revealed to Business Day (BD) that that “considerably” added up to as much as 30%.

The bugbear facing the manufacturers is that the department of trade and industry (dti) has decided to add the medium and heavy

commercial vehicle manufacturing sectors to its post-2020 automotive industry development policy – the SA Automotive Masterplan 2021-2035.

What the department wants is for trucks to be like cars, with components sourced from local suppliers – in the hope that this local content will create new jobs.

But the numbers don’t add up, according to truck makers, and their mumbles ensured FTW that the whole scheme was unjustified.

This was proven in another part of the masterplan where the authorities insisted, despite reservations by the industry, that one step would be for cab trimming to join the list of local content, and that this would be a qualification for the Automotive Investment Scheme (AIS).

But the National Association of Automobile Manufacturers of SA (Naamsa) conducted research into the implications and costs

associated with cab trimming – finding no rational business case for domestic trimming of cabs for medium and heavy commercial vehicles (MCVs and HCVs respectively). Add to that, Naamsa’s executive manager Dr Norman Lamprecht told FTW, little incremental job creation or value addition.

Uren’s interview with BD also detailed what Isuzu had calculated for the interior trim of truck cabs to be produced and fitted in SA: Cost, R35 million; jobs created, 15. “It doesn’t make sense,” Uren added.

The truck makers put all this before the authorities. And, in this case, it seems as if the data provided by the truck manufacturers persuaded the authorities to take a decision. They postponed the introduction of the cab trimming requirement.

Next is tweaks to the rest of the masterplan programme. A negotiation that truck makers hope will be equally successful.

SA’s truck manufacturing dream ‘not feasible’

The transporter is able to see exactly where his truck is on the app.– Sue Moodley

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