Despite talk of projects and
infrastructure upgrades
in the region, most
freight forwarders are
complaining about the lack of good
profitable business in the project
cargo sector, says Howie Frylinck,
trade manager for southern
Africa and Angola at GAC Laser
International Logistics.
He said while the general
perception was that there was a lot
happening and the sales pipeline
looked impressive, when it came to
actual volumes this was not the case
“Some forwarders have closed
their doors in areas where it has
become extremely expensive to run
an office and have rather reverted to
using a small local agent.”
He said at present it appeared
that larger volumes of project cargo
were still moving into other areas
of Africa but even this was on a
smaller scale than was previously
anticipated.
Forwarders complain of
lack of profitable business
Several project cargo experts
told FTW they agreed with this
outlook, blaming the ongoing
economic slump,
the downturn in
commodity prices
and the drop in
the oil price.
Frylinck said
he believed the
project cargo
sector, in many
companies
functioning as a
department only,
was currently in survival mode. “The
oil and gas market has traditionally
been a very good contributor to
project cargo,” he said. “The oil
industry, however, remains under
pressure with rigs parked all
over the world without contracts,
thousands of job
losses, and no new
refineries and
LNG plants being
built. This has a
direct impact on
project cargo.”
Wesgro
economist Janine
Botha said in
the current
economic climate
infrastructure and project budgets
were likely to be cut significantly.
According to Frylinck project
cargo growth is closely linked to
economic growth.
“Food, clothes, medicine – basic
needs can be shipped in containers
on container vessels. It’s a service
that will always be there,” he said.
“But for project cargo to start
moving we need major investment
in areas where it is required – and
Africa is at the top of that list.”
Commentators believe the oil
price also needs to increase to at
least $70 per barrel if not $80 –
and on top of that if Africa is to
see investment that will get project
cargo really moving mining has to
start performing again, which will
in turn give government the extra
funds to plough into roads, railways,
energy and the like.
Some forwarders have closed
their doors in areas where
it has become extremely
expensive to run an office.
– Howie Frylinck
