Global supply chain backlogs are showing no signs of easing and are likely to worsen for the rest of 2022, leading to even higher prices of consumer and commercial goods in South Africa, says Sebastiano Iorio chief executive of logistics company Cargo Compass SA.
“At the start of this year we were hopeful that trade bottlenecks would ease this year, but they seem to be getting even more severe.”
“Prices of consumer goods like electronics and clothing, including imported basic food products, are certainly going to keep rising while commercial goods such as imported machinery, hydraulic pumps and computer chips, to name just a few, are not yet in short supply in South Africa, but could well be later this year.”
Iorio said that these shortages will have a significant impact on the country’s already fast-rising inflation rate. He added that it’s not only shortages that present a problem, but rapidly rising freight charges are adding to dramatic price rises in shipped goods. “So far, South Africa has been much luckier than other countries. We have good stock levels for now, but we note that importers are holding more stock, avoiding out of stock scenarios. The commodity cycle upswing has also created a strong rand which has dampened the price of imported goods, so we have yet to experience all the inflationary price spikes seen elsewhere in the world. But our luck won’t last forever.
“Two years ago, freight rates for a standard 12-meter container from China were $2,000 to transport via sea to South Africa. Today it costs $14,000, an increase of over 500%
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