Infrastructure constraints limit bulk export potential

Continuing problems with internal
infrastructure at the country’s railways
and ports are limiting the ability of
most bulk producers/exporters to
meet export targets, according to
Simon Lester, the managing director
of global shipping firm Clarksons in
Johannesburg.
Furthermore, Lester says the
infrastructure-related problems have
prevented exporters from taking
advantage of current high prices on
practically all commodities.
Lester, who has been involved in
the shipping industry for 30 years,
says the infrastructure problems are
however not exclusive to South Africa.
Most ore/coal producers worldwide
have had problems increasing their
exports, either due to throughput
capacity or other factors such as
weather. “Certainly it would seem both
Indian and Chinese demand is such
that it will be some time before there is
any dramatic change in requirements
or commodity prices.”
However, Lester says, while
seaborne bulk volumes are at an
all-time high, the bulk freight
market, due to record ordering of
newbuildings during 2005/2008,
remains under pressure – particularly
in the larger “Cape” sector. With
limited expansion of existing export
capabilities worldwide, he says it
seems unlikely that there will be any
great improvement in freight rates
until there is a concerted scrapping
programme for older tonnage and/or
significant improvements in export
capabilities.
But refurbishments could also
cause delays and disruptions, severely
impacting the work of exporters. Lester
says Transnet’s recent announcement of
the three-week closure of the Richards
Bay coal-line from Mpumalanga will
see a reduction in coal exports from
Richards Bay of 4-4.5 million tonnes.
Notwithstanding the infrastructurerelated
impediments to doing business,
Lester says the woes of shipowners
in South Africa are also compounded
by the high price of bunker fuel
which, in many instances, is making it
problematic to trade their tonnage at all.