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 South Africa’s Endangered Ports

Posted January 19, 2024

Matt Insley

By Matt Insley

South Africa’s Endangered Ports

Today, we return to events taking place in the Middle East and the ripple effects on global trade. 

Since the Houthi faction in Yemen started targeting merchant ships late last year, ships traveling between Asia and Europe have been detoured around the southern tip of Africa, adding substantial transit time compared to the typical route through the Suez Canal.

As our colleague Dave Gonigam put it at Paradigm Pressroom’s 5 Bullets: “A major part of the global supply chain has been set back to the 19th century.”

Adding insult to injury, ships making this longer journey must stop in South African ports for refueling and restocking. Ranked among the world's least efficient, “the ports are understaffed and use outdated equipment,” says The Maritime Executive. 

In fact, Transnet, the state-owned company responsible for South Africa’s ports, railways and pipelines, appealed to international companies in December to help improve subpar performance at the nation's ports.

Likewise, earlier this month, Transnet tapped Dutch-based company Vopak to implement and operate South Africa’s very first LNG port terminal. 

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Your Rundown for Friday, January 19, 2024...

Taking the Long Way Around 

With regard to liquefied natural gas (LNG), Qatar — the world's second-largest LNG provider to Europe — redirected three full tankers away from the Red Sea this week. 

Transporting the fuel, used to generate power and heat, takes about 27 days from Qatar to the UK using the route around Africa, for instance, compared to 18 days via the Suez Canal. 

“While the longer LNG journeys will tie up tankers and boost freight costs, they’re not expected to lead to shortages in Europe, given high stockpiles,” Bloomberg insists. 

Yeah, we’re not buying it. 

The same outlet, Bloomberg, featured this headline about two weeks ago: 

Screenshot 2024-01-18 at 11.55.33 AM

Because global shipping has been knocked back to the 1800s, a deep freeze in Europe will make natural gas more expensive and, given time, more scarce. 

There’s yet another variable that’s been largely ignored by the mainstream media: South Africa’s national power grid is distressingly unreliable and inadequate. 

Security-management publication, Crisis24, notes: “South Africa will likely remain susceptible to regular load shedding” — scheduled blackouts — “through mid-2024 and [beyond] since any additional short-term solutions are unlikely to materialize.” 

Blackouts that can last up to 12 hours raise security threats as alarm systems, electric fences and other safety measures are rendered useless. “Opportunistic criminal activity increases during electricity outages,” Crisis24 affirms. (Berthed cargo ships? Lucrative targets, I’d say.)

For Asia-Europe shipping traffic then, taking the long way around — with stops in South Africa’s chancy ports — tacks on significant risk, time and costs. Costs which consumers will pay. 

Beyond that, if delayed cargo happens to be the fuel essential for heating European homes this deep-freeze winter, that just adds another dire dimension to the “slowbalization” of shipping. 

Market Rundown for Friday, Jan. 19, 2024

The S&P 500 is up 0.20% to 4,790.

Crude is up 0.70% to $74.60 for a barrel of WTI.

The price of gold is up 0.35% to $2,029.60 per ounce. 

And Bitcoin’s up 0.25% to $41,000. 

Send your comments and questions to, feedback@newsyoucanacton.com

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