But tax regime works against SA-owned shipping lines
ALAN PEAT
IF SA is to reduce the cost of doing business,
coastal sea transport should be expanded as part of
a national integrated transport network, according
to Andrew Thomas, CEO of Durban-based Ocean
Africa Container Lines (OACL).
A multimodal service using sea transport is
probably 50% more efficient in terms of fuel
consumption than a purely road option, he told
FTW
“That’s 50% less exposure to fuel-driven inflation
in the economy.”
And a recent cost comparison by OACL on the
Durban-Windhoek route showed that its multimodal
service was able to offer savings of around
one-third of the cost of using alternative modes.
The line currently carries about 500 000-
metric tonnes of domestic cargo each year, which
would otherwise travel by road – and, according
to Thomas’s arithmetic, that’s around 20 000 less
trucks on SA roads. “Maybe more, given the
imbalance of flows,” he added.
But development plans for the industry are
somewhat thwarted by the current tax regime.
It is a serious impediment to SA-owned shipping
lines, according to Thomas.
“Tonnage tax is something we are very keen
to see promulgated in SA,” he said. “As the
country’s only resident container shipping line
we are prevented from investing in our own
vessels because the local tax regime makes us
uncompetitive in the global market in which we
operate.”
This allows shipping lines operating from foreign
jurisdictions to have a competitive advantage over
local lines in their own back yard.
“It would be of enormous pride for us to bring
an SA-registered container vessel in Ocean Africa
colours into the Port of Durban,” said Thomas, “and I
believe it could be done.”
The line is continuing to upgrade its fleet with
larger and more modern tonnage.
For example, the 1 162-TEU capacity vessel, the
MV Ridge, is currently being worked down from
Europe to SA to be deployed on the OACL trades.
She is almost double the size of the MV Range,
which she is due to replace around August.
“We’re also renaming three chartered vessels
to bring some of our traditional names back into
the schedule,” Thomas said. “Mai Rickmers, Peter
Rickmers and Doria will be known as Border, Barrier
and Frontier in the future.”
Part of the Grindrod group, OACL has a legacy
in Durban dating back to the 1920s, albeit trading
under different names – one of the best known of
which was Unicorn Lines.
“We’re still here and stronger than ever,” said
Thomas. “Africa is our home and our place of
business.”
