Export revenue worth billions, and employment opportunities stemming from strengthening trade relations with the United States, could go a-begging if shipping lines don’t increase capacity, Terry Gale of the Exporters’ Club Western Cape (ECWC) has warned.
The club’s chair, who also heads up Gale Lotheringen Freight Consultants, says carriers have neglected to keep pace with the growing demand for exports from the Western Cape.
Whereas a weekly service to the States laid the foundation for increased trade, supply has vastly outstripped capacity, resulting in allocations becoming so constrained that shippers and agents have to wait for six to eight weeks for a booking.
“We can’t carry on like this. There are exporters sitting with goods ready to go to destinations on the east and west coast of America. They have deadlines to meet, but as things stand will most likely only have their goods loaded in mid-May.”
Gale said exports waiting to go range from perishables such as fruit, wine, herbs and spices, to manufactured goods from furniture suppliers and refined items such as African art.
Exasperated by the extreme need for shipments to be speeded-up, the ECWC launched a survey among its members, finding that 95% of exporters surveyed were stuck.
“They are unable to move their freight into the US East Coast, and the West Coast is completely out of the question,” Gale said.
If this is not remedied as a matter of urgency, participants in the survey, which include large concerns with multimillion-rand turnovers and substantial staff complements across the Western Cape metropole and into Swartland, said they might have to close down.
“Me too. If this continues I might as well have to close my business.”
At the heart of the matter is the US’s fast-growing liking of goods from the Cape.
Said Gale: “Over the past decade, trade between the Western Cape and the US has increased by 11.4% on average, valued at R23.59 billion in 2021.”
Over and above becoming the province’s biggest trading partner, the US had also become the Cape’s biggest foreign investor, Gale said.
“Amazon alone is spending R4.3 billion on its new African head office in Cape Town.”
Gale said a collective effort across the entire value chain was required, from portside stakeholders right through to the shipping lines.
He claimed though that although backlogs in the system needed to be addressed across the spectrum to ensure that all ocean freight efficiencies were seen to, the solution really lay with shipping lines.
“There is nothing wrong with our multipurpose terminal actually. They can handle the amount of cargo destined for the States. It is the shipping lines that need to build more capacity into their sailings.”
With delays running for weeks, shipments meant for Florida, California, New Jersey, New York and Georgia – to name just a few destinations in the US – will grind to a halt by the end of May if the Western Cape cannot guarantee meeting export deadlines.
“It will be a disaster for our economy,” Gale said.
Should this be allowed to occur, South Africa should not be surprised when it’s excluded from the African Growth and Opportunity Act (Agoa) when the beneficial bilateral agreement comes up for renewal in three years’ time, he stressed.
