SARS crackdown on micro-shipping leads to strain on port freight

Since late last year, SARS moved to close a customs loophole exploited by foreign e-commerce giants like Shein, Temu, and Amazon. For the past few years, these firms sidestepped import duties by breaking shipments into low-value parcels, qualifying for a flat 20% duty with no VAT. The reforms, rolled out progressively since late 2024, aim to level the playing field for local retailers and recoup an estimated R3.5 billion in lost annual revenue.

But the cure may prove as disruptive as the disease, inadvertently triggering a logistics crisis that threatens to choke South Africa’s already strained trade arteries. The unintended consequence of SARS’s clampdown is a shift in how these e-commerce giants move goods. Previously reliant on air freight for speed, they are pivoting to cheaper, high-volume sea cargo to skirt the new per-parcel scrutiny and costs.

Full duties, which range from 20% to 45% plus 15% VAT, have rendered the micro-shipping model, which exploited a 2007 concession for consignments under R500, uneconomical. By February 2025, all goods must face detailed declarations and inspections, which are costly for air-freight channels, both in terms of time and money. Sea containers, by contrast, offer economies of scale, with rates as low as $3,273 per 40-foot unit, which is why they are the norm for companies without the ruthlessness, micromanagement capacity or economy of scale to do otherwise.

This naturally is causing trouble for South Africa’s creaking logistics system. The Durban-Gauteng corridor, through which nearly 2/3rds of all internal trade passes, is ill-equipped to handle a surge in container traffic. Transnet, the state-owned rail operator, moves just 14% of cargo by rail, far below its 50% target, leaving trucks to clog the N3 highway.

Ports, already reeling from Red Sea reroutes and ranking at the bottom of the World Bank’s Container Port Performance Index, are not any better. Border posts like Lebombo endure 12-hour delays, and rail capacity has plummeted to 15 trains daily from 80 – despite Maputo’s greater efficiency, Lebombo is a chokepoint, and a great deal of cargo still diverts from Maputo to Durban because of the exorbitant bribes demanded by Mozambique customs officials, the unpredictability of which makes even the sluggish and more distant Durban favourable for many shipping companies.

This freight crisis could cost the economy R1 billion a day in lost trade, compounding the R353 billion hit from rail disruptions in 2023 alone.

SARS’s reforms are of course necessary – the loss-leading strategies of Amazon and the state-subsidised corporations of mainland China are poison to local competitors. Local textile firms, battered by cheap imports, stand to gain from a fairer playing field, and the fiscus could see a windfall from closing the loopholes ruthless foreign companies seek to exploit.

But as rising e-commerce volumes shift to sea, South Africa’s ports and roads risk paralysis. Proposals like a R50 billion inland “Port of Gauteng” to boost rail-truck efficiency and create 50,000 jobs are years away. Without urgent investment in infrastructure, SARS’s bid to protect local industry may instead saddle South Africa with a logistical nightmare, proving that even well-intentioned policies can backfire spectacularly.