As signals of a potential slowdown loom over the Chinese economy, South African companies are watching with bated breath, knowing that any ripple in the economic giant's waters can send shockwaves across local markets.According to Athol Emerton, managing director of LBH South Africa and Mozambique, significant volume reductions to China have yet to be seen, perhaps because of bottlenecks throughout the region. "Trade, however, is not a new phenomenon. It traces its roots back to ancient times when resourceful salt miners initiated a supply chain that laid the foundation for what we know today as global commerce. Companies continue to navigate competitive, tightening, and sometimes duress-ridden markets in the modern era. Even in the face of price volatility and the ever-looming risks to the global economy, bulk commodities persist as the driving force behind regional economic growth," he told Freight News.Africa, in particular, plays a pivotal role in this global trade landscape, said Emerton. "It remains a significant source of multiple raw and semi-processed materials. We are often called the "grocery store" of some of the world's most valuable resources. With new exploration and mining companies consistently investing in this region, there is a palpable optimism about the bulk sector."Organised supply chains criticalBut, said Emerton, the key to ensuring the longevity and vitality of the bulk cargo market was in getting supply chains organised, reportable, and reliable. "Despite major constraints, there are opportunities for increased bulk cargo volumes, provided that an agile approach is adopted to spot and exploit gaps quickly. It is vital to have eyes and ears on the ground, and it is for this reason that we view our formidable market intelligence model as a key differentiator in our offering."He said LBH South Africa and LBH Mozambique had operated in the region since the eighties and focused on providing bulk solutions. "We are proud to have had active involvement in 250 million tons of cargo across South Africa and Mozambique in the last five years, including manganese, coal, chrome, mineral sands, iron ore and magnetite."He added that an ongoing challenge was the chronic shortage of capacity at ports and terminals throughout the region. "We specialise in finding space for our clients, pivoting between and pioneering logistics corridors as necessary. We are entirely invested in solutions for our clients – at the end of the day, there is "no sale" if the commodity doesn't get to ma rke t ."Uptick in battery mineral shipmentsHe said an uptick in battery mineral shipments was being seen, especially as new projects were starting to come online to take advantage of the boom. "In Mozambique, there is huge investment in improving ports and facilities, with new equipment and facilities regularly commissioned. This is great for the hinterland, and we hope that regulatory systems follow suit."Emerton emphasised that investment was critical for the bulk sector. "More investment and a continuing "blue sky" approach will allow opportunities to become self-generating. Private sector investment is just as important and is the key to unlocking growth. Transnet has shown encouraging signs that it is slowly opening up for business in this regard," he said.Boilerplate capacityAnother critical issue that needed addressing as soon as possible was maintaining boilerplate capacity, or at least a guaranteed percentage of a particular channel or port was necessary. "This reliability allows cargo interests to plan, but it does mean that all stakeholders in the regional supply chain have to redouble efforts to maintain reliability and efficiency, with maintenance programmes being particularly critical."Emerton said adapting supply chains was relatively easy if there was reliable boilerplate capacity.
