Growing confidence as market ‘stabilises’

The general consensus in the SA forwarding industry is that the tough times are easing. Although both volumes and margins are still under threat, executives in the industry suggest that the signs are there that indicate that the SA market is levelling off after the disastrous slump in the early part of the year. This follows European press reports that forwarders and wholesalers over there have also seen a firming of certain markets over the past two months. Some, indeed, were even quoted saying that they were experiencing their best weeks of 2009. FTW’s research didn’t find anyone talking in such superlatives, but confidence is growing that the worst times are past. Charles Speed-Andrews, finance director of Safcor Panalpina, told FTW that he was not seeing growth as yet. “But from my perspective, the market has certainly bottomed out, and things are currently stabilising. “Volumes are nowhere near where they were, but they are at least proving consistent.” He also expected the usual annual pre-Christmas rush in the fourth quarter of the year. “If it began to happen this quarter, that would be nice.” Speed-Andrews is certainly putting his money on an upturn in the fourth quarter, but asks the forbidding question: “What happens in January?” It’s the natural downturn period of the SA year. “But,” he asked, “just how far down will it go next year?” He doesn’t claim to be one of the optimistic breed. “However,” he said, “while it’ll definitely go down, I think it will be better than January this year – for sure!” Andre van Rensburg, MD of Kuehne & Nagel, suggested that any assessment of conditions depended very much on individual market performance. Looking at his company’s primary markets his overall market assessment would have to be that things are now looking better. “There has definitely been a downturn in Europe,” he told FTW, “but that is now easing up. And the Far East appears to have begun running out of stockpiles, and it’s certainly beginning to look healthier again.” On predictions of recovery, he is not looking for any instant upsurge. “The Bureau for Economic Research at Stellenbosch University doesn’t forecast any real upswing till at least the second quarter of next year,” he said, “and we agree.” The answer in tight times, he added, is a strong focus on sales. “That’s been our strategy. Push up sales, and volumes will follow. Margins may still be low, but things are getting better as far as we’re concerned.” Ron Kerbus, district manager of Expeditors, felt that they had never really lost their solid base during the recession. “Some customers haven’t gone down that much, and some industries have actually seemed quite healthy,” he said. “The automotive sector is definitely down, for example, but healthcare is holding up nicely. We’ve also got a good spread of customer interests, so it hasn’t been too bad for us.” Kerbus also supported the sales attack strategy as a remedial measure in times of recession. With others cutting costs to the bone, a focus on maintaining or increasing sales effort meets with good conditions for getting new business, he said. Roland Raath, MD of Cargocare, also professes to the “think smarter” tactic in times of recession. He felt he had every reason for a re-think. “Our figures showed that the economy and business were down about 23%. However, we came up with a happy solution.” A system tool was designed to highlight inactive customers – giving another measure of market conditions. And the latest figures, according to Raath, make for happier reading. “These show that quiet clients became much more active in June and July. “You can add to that a space shortage, as ships from China sail full – although also taking into account that they’ve cut down capacity. “Things are definitely stabilising, with figures showing a minimal upturn in July, and I have high hopes for August.”