‘Don’t base shipping decisions on price alone’

The West African project cargo market remains buoyant thanks to continued investment in large infrastructure-related projects. “While the global financial crisis has had some impact on the West African breakbulk market, it has not been as severe as initially feared,” says Mark Day, MPV national sales manager for Safmarine South Africa. “A number of large infrastructural and oil and gas projects continue to come on stream throughout the region and this bodes well for the project cargo industry. In fact, volumes for the first quarter of 2009 were slightly up on 2008 figures, which is an encouraging trend.” Day says breakbulk shipping volumes dipped in certain sectors as a result of letters of credit not being awarded, but there are encouraging signs that business is picking up. Which is one reason why several new, often speculative players, have entered the market. “Typically these tend to be ‘spot’ carriers who are often only in the trade for short term gain – their aim is to make a quick buck by reducing rates in order to fill available space on voyages by-passing South Africa.” While the low rates are attractive to cargo owners and shippers – especially in the current tough economic climate – Day cautions against basing shipping decisions on price alone. “Anyone serious about succeeding in the African project market needs to take a long-term view when it comes to cost and space allocations. Spot carriers may offer cheap rates but they often do not have adequate knowledge of the market or local ports and this lack of experience can be very costly, particularly when vessels are delayed and deadlines missed. “Furthermore, when capacity is tight, established operators – who are in the trade for the long haul – will give priority to loyal customers.” Safmarine, which has been involved in the South Africa–West Africa breakbulk market for more than 15 years, says it will not participate in a rate war. Rather, the line will continue to focus on providing a quality service at a fair rate in order to ensure the long-term viability of the trade for everyone involved.