Difficult for now – but opportunities are there for the taking – Saasoa

Save for a significant turnaround,
the global maritime industry is
in for a difficult time, and since
South Africa operates within that
global environment, we can’t
escape the fall-out.
Chairman of the SA
Association of Ship Operators and
Agents and CEO of Ocean Africa
Container Line, Andrew Thomas,
painted a fairly bleak current
picture of the industry, but pointed
to significant opportunities for
longer-term growth in the sector.
“After a bull run stretching
back some six years, the Baltic
Dry Index has fallen by 93% to its
lowest level since 2002,” Thomas
told delegates at last week’s
IDC forum.
“Cape size vessels, which
peaked at more than US$25 000 a
day, have been fixed recently for
less than US$10 000 a day while
containership charter rates are also
falling. Some sectors are off 40%
since the beginning of the year,”
he said.
In addition, the major East/
West trades are under significant
pressure. “Rates for 20ft
containers between Asia and
Europe have fallen from around
US$1400 to US$350 over the past
12 months and established carriers
are reducing capacity, with
new entrants having withdrawn
completely.”
But it’s not all doom and
gloom. While the challenges can’t
be ignored, there are opportunities.
“Capacity in our regional
landside systems remains limited,
congestion and delays are
common, and internal logistics
costs are higher than average –
but there are several projects that
should be considered, among them
bunker supply,” says Thomas.
“Around 1000 vessels called
at the Port of Durban in 2007 just
to bunker. And this figure was up
from 400 in 2004.
“Due to shutdowns we are
unable to supply bunkers for
around 11% of the time.
“In addition SA is only able
to supply 180cst bunkers while
70-80% of the world market is
for 380cst. The price differential
between the two grades is around
US$100 a tonne.
“Can government policy
and willing investors create
the environment for the supply
of 380cst in SA ports?” is the
question he asks.
Thomas also sees opportunities
in the supply of skills. “The
rapid expansion of the world’s
commercial fleet has led to a
shortage of vessel crew of all
ranks.” He suggests that the
formation of strategic alliances
with vessel owners and their
crewing companies combined
with world class training facilities
could breed a new generation of
SA seafarers.
Another unexploited niche is
in the dry dock arena. “There is
a shortage of dry dock capacity
globally and particularly for the
larger size vessels.
“Is there not a market for a
purpose-built dry dock facility in
South Africa?”
There’s no escaping the
current financial meltdown,
but the industry should
begin preparing now for the
opportunities that will present
once the world economy begins
to rebound.