‘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.