Tennis shoes, iPads and tyres have one thing in common ...

● Struggling to find your favourite pair of tennis shoes, an iPad, or even new car tyres? You will need to be patient because some business bodies expect consumer goods shortages due to Covid-related global supply chain disruptions to continue for at least another year.

Disruptions to global supply chains were initially caused by the first global hard lockdowns and border closures during the pandemic, and now trade is skewed to larger, more profitable markets that have substantial pent-up demand, such as the US, meaning countries like SA have to wait in line for goods.

Port stoppages in China to contain Covid19 outbreaks are exacerbating the problem.

In a January update, Jacob van Rensburg, business analyst at the South African Association of Freight Forwarders (SAAFF) said: “Unfortunately, the global pandemicinduced supply chain woes are set to continue for much of the year as the prolonged issues of elevated demand, equipment and staff shortages and global port congestion continue.”

Van Rensburg said that “moderation or a return to normal, albeit a new, adjusted ‘normal’, will only occur around the Chinese new year in 2023”.

He said the constraints, which began with “roaring demand for consumer goods in developing countries”, have resulted in “stratospheric container freight rates, which all role players in the extended supply chain have unfortunately had to grow accustomed to”.

In China, the port of Tianjin is the latest to be affected by stoppages. And when stoppages occur in a country that is “the major trading partner to many countries worldwide ... there is a ripple effect throughout the rest of the world”, said Van Rensburg.

He said smaller importers and exporters in SA and elsewhere in the world have seen their “cargo getting ‘rolled ’— bumped like passengers on an oversold flight — and sometimes cancelled outright despite contractual obligations with carriers”.

Van Rensburg told Business Times that SAAFF’s members are experiencing shortages of high-end audio sound-system imports, car tyres, coffee and new vehicles.

SA is also contributing to global supply chain shortages, said Alan Mukoki, CEO of the South African Chamber of Commerce and Industry, as creaking rail and port infrastructure, further weakened by copper theft and vandalism, has meant less coal, iron ore and manganese being exported from the country. These raw materials are key inputs for the powering of big industry and are compounding the shortage of finished products desired by SA’s consumers.

“I think in my estimation global supply chain shortages are going to be a problem for 12 months as a rough estimate,” said Mukoki. He said SA has to be “serious about rebuilding its rail and port infrastructure” to be able to keep up with the demand for raw materials around the world.

Transnet said Transnet Freight Rail continues to work closely with customers to “improve efficiencies across all its corridors”.

Transnet said that, for ports, the pandemic’s effect on the global supply chain has “created a unique immediate challenge to the supply of container vessels and containers”.

It said order books of new vessels are about two years “behind the demand curve”, with “no additional ships to cover the demand”.

Transnet is implementing “efforts to reduce congestion” at ports. On the operations side, this includes “increasing equipment availability so that productivity can be improved to reduce delays”.

In Durban, the Transnet National Ports Authority (TNPA) has applied to the eThekwini municipality for the transfer of roads traversing or approaching a section of the port known as Maydon Wharf to TNPA, to “enable better management of traffic movements” on Maydon Wharf.

“In order to deal with congestion in the ports, TNPA will be replicating the decongestion committees that started in Durban in the other ports. These are multidisciplinary stakeholder platforms to jointly improve efficiencies through the entire port value chain,” said Transnet.

JD Group, which is owned by Pepkor and whose brands include HiFi Corp and Incredible Connection, said the supply chain challenges are affecting electronics and other segments, but things are improving.

Pepkor said JD Group has “seen exponential growth in demand for computing and related products, driven by work-fromhome and online schooling since the onset of the Covid-19 pandemic”. This is against “the backdrop of a pre-existing chip shortage due to under-forecasted global demand in the 12-18 months pre-Covid”.

“In addition to these shortages of key components, the supply chain challenges impacting electronics and many other segments can be attributed to lack of logistical capacity, especially on shipping lines out of Asia, as well as rampant inflation driven by high demand and component shortages or lack of capacity,” said Pepkor.

Incredible Connection took a “bold approach” from the beginning of the first lockdown and “aggressively placed” long-term forecasts and orders with all factories.

“This has enabled us to secure a reasonable amount of stock to service the local demand,” it said.

Azar Jammine, chief economist and director at Econometrix, said the supply chain constraints will have a “dampening effect on the global economy”, potentially increasing international price inflation, which is already at its highest levels in 30 years.

Jammine said a “massive surge in shipping costs” also contributed to inflationary pressures. In SA, supply chain disruptions will also have been affected by last year’s July riots and the cyberattack on Transnet, he said.

Sasfin Securities chief global equities strategist David Shapiro, however, is hopeful that global supply chain constraints will be “short-lived”.

Shapiro said shortages were nonetheless affecting South African retailers, who will show lower numbers because they are unable to source certain goods.

He said that “on the technology side, such as with iPads”, there are “clearly shortages”— but a consumer who may not be able to find a specific athletic shoe or sneaker they want because of shortages will have others to choose from.

SA is contributing to global supply chain shortages as creaking rail and port infrastructure has meant less coal, iron ore exported Alan Mukoki

CEO of the South African Chamber of Commerce and Industry