South African shipping buoyant amid recession

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

30 Jun 2009

Coastal trade in South African waters has shrugged off the recession and seems to be the rare bright spot in the gloomy international shipping industry, a local shipping firm said last week. Andrew Thomas, CEO of Ocean Africa Container Lines, a joint venture between Grindrod and Safmarine, said the South African coastal market remained largely unchanged. By contrast, the global shipping industry was grappling with shrinking world trade volumes and excess new ships.
Thomas said Ocean Africa Container Lines, which handled about 500000 tons of cargo a year, mainly moved sugar, paper, malt and wheat between domestic ports, including Durban and Cape Town.
SA has seven other ports, including Richards Bay, Port Elizabeth, Saldanha Bay and Coega, which seem to be busy due to high demand for bunker services.
Russell Burns, CEO of Unical Bunker Services, a subsidiary of Grindrod, said there was an increase in sales of bunker fuel, boosting a wide range of port support services in SA.
He said the low cost of bunker fuel had motivated shipping lines to divert Europe and east-bound traffic around the Cape of Good Hope rather than using the Suez Canal.
The piracy threat in the Gulf of Aden had also seen a marked increase in traffic calling in Durban for bunker fuel, he said.
Thomas said the company had not seen a significant decline in volumes because basic commodities such as wheat were still in demand.
“We don’t move cars,” Thomas said, alluding to the slowdown in vehicle sales that would have affected its volumes had they been one of the goods the company shipped.
Apart from South African coastal trade, the intra-Africa shipping market seemed to have held up well too.
Thomas said intra-Africa volumes were steadily boding well for Ocean Africa Container Lines, which has a feeder service (carrying other shipping lines’ containers).
The company, which generates 80% of its business from the feeder service, operates container vessels on the southern African coast, trading between ports in Mozambique, SA, Namibia and Angola.
He said feeder or transshipment volumes in Durban were at similar levels to last year’s.
Increasingly, shipping lines, particularly those with services from the Far East, were showing an appetite for servicing ports located north of SA , where previously only a small number of players were willing to operate, he said.
This meant an increased demand for common feeder services such as those offered by Ocean Africa Container Lines.

Source: Business Day