Hanjin bankruptcy demonstrates rate ‘unsustainability’

Despite challenges
posed by rate
volatility, the outlook
for ocean freight
volumes on the Far East route
is positive, according to Martin
Keck, managing director of
neutral consolidator CFR
Freight.
“Not only are the rates
extremely low – we also see
them literally changing every
week.
“The Hanjin
bankruptcy
has shown the
unsustainability
of the current
rate levels,” said
Keck, who sees
two possible
scenarios
unfolding.
“Either we
will see more
shipping lines
disappearing
from the
picture or rates
will have to
increase.”
Volumes however appear to
be moving in the right direction
for CFR. “At the beginning of
the year we saw a decrease in
year-on-year volumes, but the
figures have since become far
more encouraging.
“The Far East economies are
continuing to grow faster than
most others in the world, which
is extremely
promising.”
Keck
believes that
our local
economy could
be the biggest
obstacle to
trade. “We are
not keeping
pace with the
East or the rest
of the African
continent,” he
said.
CFR Freight
has however
continued to grow its services
to and from the Far East – and
through its WorldWideAlliance
partnership, mainly
represented by Shipco in Asia,
it is expanding its coverage.
“Since August we have been
serving Xiamen (China) for
imports in partnership with
Shipco – and have been very
successful,” said Keck. “We
serve all South Africa’s ports
from 12 different ports in the
Far East and on exports we are
successfully using Singapore
and Hong Kong, offering
extensive coverage of the entire
region.”
The airfreight division is
equally upbeat about volumes.
“We have definitely seen an
increase," said airfreight general
manager Stephen Bishop.
“But we have noticed over the
past few weeks that capacity
has become a challenge,” he
said. “We have not felt this for
a few years and the perception
is that carriers have reduced
capacity on the lanes to drive
up demand and therefore
pricing.”
He said CFR had blocked
space on its main routes
but anything outside of
consolidated services could be a
challenge at this time of year.
According to Bishop staying
on top of what is a marketrelated
rate remains a challenge
in the ever-changing Far East
market.
“It’s an extremely dynamic
market and keeping up with
the trends around rates is not
always easy. To counter this
we have just launched a new
rates management system
which means our controllers
always have the most
up-to-date pricing on
hand,” he said.
Bishop said the
CFR team would be
travelling to Vietnam
in February next year
to meet its affiliate
partners from the
Far East and South
East Asia for an Air
Cargo Group network
meeting – a move that will
provide an opportunity for
strategic planning.
INSERT & CAPTION
Since August we
have been serving
Xiamen for imports
in partnership with
Shipco — and have
been very successful.
– Martin Keck