Industry records mixed fortunes as it looks back on 2008

It was a fairly happy 2008 for most in the freight industry, until things came crashing down in the global financial crisis at the end of the year. But for the road transport sector it was less positive, with diesel fuel rocketing up to record highs in the first three quarters of the year, and only beginning to ease down from October. There is also less movement of cargo within SA, according to Kevin Martin, MD of Freightliner Transport and vice-chairman of the Durban harbour carriers’ division of the SA Association of Freight Forwarders (Saaff). “Although the Port of Durban is still boasting about big volumes of cargo,” he told FTW, “transhipment cargoes now comprise 50%-60% of the total cargo handled – well up on the usual 30% transhipment figure. “And transhipment cargo gives no business to local road transporters.” Martin’s records reveal that gate moves at the Durban container terminal (DCT) are showing a 12% decrease this peak season. “This year,” he said, “there is a chance of negative growth for the industry. And I think there will be a small negative next year as well.” Amongst the cheerier parties is forwarder Margrit Wolff, MD of Buffalo Freight. “I forecast a 100% growth for my company this past year,” she said, “and we were meeting that figure until November, and that drastic international crash. “We had record months up until then.” She also suggested that airfreight had grown “unbelievably” – with a lot of people importing smaller quantities of goods, and using airfreight for these deliveries. “Seafreight is dropping off,” she said, “and we are not seeing the enormous volumes of last year.” Her forecast for next year is that the rand/US dollar exchange rate will drop back to about R9/US$1, with the government also having sound economic policies designed to fight off a lot of the problems that have plagued other countries during this international financial crisis. It’s still too early to be exact about this year’s fortunes in the air cargo industry, according to Alwyn Rautenbach, MD of Airlink Cargo and chairman of the Air Cargo Operators’ Committee (Acoc), as the year’s records have yet to be finalised. “But,” he said, “as a gut feel, I’d think that imports might be slightly down this year. “Airfreight exports to southern Africa have been, and continue to be, quite strong – with the large number of mining projects in the area being the main stimulant. But airfreight exports overall will, I think, show a slight decrease.” Not so happy now for the seafreight industry. According to an agent for a main shipping line, things have changed drastically following the global financial crisis. “And it’s having a big impact on the world’s shipping industry,” he told FTW. “Carriers are cutting back on services, and tonnages are being laid up.” On the SA-Far East trade, the agent felt that imports could still be described as reasonably buoyant. “But,” he said, “exports are at the lowest of all time.” A main part of this he attributed to China virtually having stopped ordering raw materials – with industry there working off its present stockpiles. “But they should start ordering again by about February,” he said. He described the current business mood in the shipping industry as “worried”, with owners in a panic about ships not being loaded to required capacity levels with full containers. His forecast of a tougher year this year when he gave us his 2007 industry overview kept Pete Williams, MD of Safcor Panalpina, happy with his crystal ball reading skills. “It has been as anticipated,” he said, “although added to by the global financial crisis. “It’s still too early to assess the local impact of this crisis, but I suspect it will filter through.” One sign of how tough a year it has been, Williams noted, is the rise in liquidations. “The dilemma we face,” he told FTW, “is that the rand has weakened, but the consumer demand elsewhere has declined. This leaves us with the usual safety factor of more price-competitive exports not coming into play.”