Improved supply/demand balance sees freight rates firming

It has certainly been a tough time, but the signs are getting a shade brighter, according to Clint Carmichael, shipping line NYK’s regional representative for Southern Africa. “Our latest container trade overview is based on the fact that NYK operates around 107 container vessels totalling 408 063-TEU capacity, ranking 10th amongst fleet sizes and with about 3% of total capacity,” he told FTW. The line noted that freight rates had continued to recover, as the supply/ demand balance improved due to a combination of fleet consolidation and the traditional peak season. “Average freight rates bottomed out on almost all routes,” said Carmichael, “but, like cargo volumes, did not reach last fiscal year’s second quarter levels, marking a substantial yearover- year decline. “While we expect rates to improve slightly, we also expect expenses to increase due to rising bunker oil prices.” On the local and regional scene, NYK has recently launched the South and West Africa Express (Swax) – a joint service between NYK and NileDutch. “It probably wasn’t the best time to launch a new service,” Carmichael said, “however demand from Asia in West Africa has been quite stable compared with other markets, and freight rates have been a little firmer. “The service has now settled down and is performing very well, with minimal delays in West Africa. In fact, the delays in Durban are more than in Lagos.” He also expressed the concern that these delays at Durban port were unfortunately negatively affecting overall service delivery and cost. “Unless significant improvement in delays can be achieved,” Carmichael stated, “we would need to consider some type of congestion surcharge to cover our additional costs – or possibly more drastic measures.” This latter action has already been seen with the suspension of the joint NHX service (NYK/PIL/K-Line and HMM) due to the delays in Cape Town. “With initiatives by Transnet (container terminals recovery plan), improved weather and volumes slowing over the Christmas/New Year period, we are hoping that the situation will improve,” Carmichael said.