Lines generally upbeat about growth in trade with BRIC

Imports and exports between Asia, Middle East/India and South America and Southern African countries have grown this year and are expected to continue to increase in the near future – but not without challenges. According to Arnaud Thibault, managing director of CMA CGM Shipping Agencies South Africa and regional director for Southern Africa, the company’s market share in and out of the region has increased over the past few years. “The market between emerging countries and BRIC (Brazil, Russia, India and China) is showing positive evolution,” he told FTW. However, Thibault said: “The main challenges ahead will be the ports and rail efficiency in South Africa (mainly in Durban), the impact of the global financial crisis on the South African economy and the rate of exchange. “The land-side operations are crucial for optimising operational costs and satisfying clients’ logistics needs.” He said these challenges would have an impact on shipping capacity and rates. “In terms of opportunities, we believe, as shipping lines, that there is still a need to improve logistics for South African importers and exporters – and that involves first class carrier haulage and customer services,” said Thibault. “We understand the market here and will develop solutions closely with our clients.” He also sees positive opportunities for the export of perishables to the East. Sharmeni Varathaiah, senior sales executive at NileDutch, however describes trade with the Far East over the past year as sporadic and dictated by commodity prices and demand. She said this made the outlook for the year ahead very difficult to predict. For NileDutch, the biggest challenge remains in exports of 40-foot equipment from Johannesburg to the Far East. “Even though freight rates for 40-footers are at their lowest, China is not keen to accept 40-footers into the country,” said Varathaiah. According to Richard Brook-Hart, director of national sales at Alpha Shipping Agency, trade with South East Asia is continuing to grow and he sees increased opportunities with Myanmar Republic as the military junta stands down and democracy returns to the country. However, he said that the “poor performance and high cost” of doing business through South African ports is seen as a negative by clients. Furthermore he noted: “The increase of container tonnage entering the market in the next year will lead to further rationalisation among the smaller to medium-size carriers. “In my opinion, with the increase of global container capacity, freight rates will continue to remain under pressure on the main East- West trades for at least the next 12 months. Carriers who do not have deep pockets will need to have sympathetic shareholders and bankers in order to sustain their trade routes.” CMA CGM has cemented its commitment to South Africa by opening offices in Port Elizabeth, Cape Town, Lusaka, Harare, Blantyre, Lilongwe as well as Mozambican ports with sub agencies in Lesotho, Swaziland and Botswana, said Thibault. The shipping line is also set to increase its services in 2012 for South Africa and the region in a major partnership agreement with Mediterranean Shipping Company (MSC).