Coastal sea transport provides logical cost-saving option

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.”