New reefer service on SA-Europe route

The irrepressible Ian Wicks is back in the shipping saddle, soon to launch a new weekly reefer service between South Africa and Europe. Deploying seven chartered vessels, the service is to be run by MBG Shipping, the trading arm of African Feeder Lines, a shelf company registered ten years ago by Wicks and long-time friend, Carl van der Westhuizen. The new venture is to be officially launched at a sushi affair on November 11, the first sailing from Cape Town on Wednesday, December 2. Port rotation for the fledgling service has been finalised, initially calling Cape Town, Tilbury, Rotterdam, Dakar and Cape Town, though Durban, Port Elizabeth and a third Cape Town call are to be incorporated at a later stage for what will then be a 49-day round trip. Wicks told FTW he and Van Der Westhuizen had started thinking about this undertaking last October. A business plan was completed in July and approved by the FNB credit board. Wicks has often told this correspondent that were he to start a new shipping line, an investor would have to come up with US$70 million, but neither he nor Van Der Westhuizen is saying how much is at stake with the new offering. “It’s a very serious business this and the capital at our disposal is enough to make it happen, so shippers need have no concern,” says Van Der Westhuizen, a fruit industry veteran. He adds: “The major shipping lines have been dominating the South Africa-Europe trade for a long time so our thrust is to get our story direct to the originator of the freight, that is the fruit grower, because the carton (product) basically pays for everything. “Grower costs have steeply risen this past year, perhaps 30% or more, so many of the smaller farmers are effectively farming for nothing, which explains why everybody is really looking at cutting costs in the supply chain.” Van Der Westhuizen, who runs his own fruit business on a trade route other than South Africa- Europe, says sufficient reefer capacity out of South Africa has been a problem for years. “It’s the same scenario every year, a battle to get equipment (containers) and space and I personally have been bumped off ships, from time to time, every season.” So what is going to set MBG apart from the formidable opposition? “More focused and more personalised service, each client considered a partner rather than a number because without them we would not be on the water,” they say. Aside from one unidentified minority stakeholder, Wicks and Van Der Westhuizen are the major partners, handling operations and marketing respectively, but shares will be allocated to BEE players who are able to offer “the most value” to the company. Even though South Africa finds itself in recession for the first time in 17 years, Van Der Westhuizen says: “Ironically, this difficult economic time has created a very unique opportunity for this venture.” Adds Wicks: “The current climate needs stronger maritime growth to stimulate our economy.” Wicks, currently locked in negotiations with European vessel owners, points to favourable current rates of around US$4 000 a day, as opposed to US$17 000 a year ago. The chartered MBG seven will offer modern ships with high reefer capacity; 300-plus plug points per vessel; and the ability to carry dry cargo. Wicks and Van Der Westhuizen say the intention is not to compete with the bigger players but they believe MBG could conceivably capture 10% of the export market. The brainchild of Wicks, seven years in the making, SA Independent Liner Services (Sails) was founded in 2004, largely funded by mining conglomerate and subsequent majority stakeholder, Lonrho, but the enterprise was not to be. “I have learnt a huge amount from the demise of Sails.” The company was liquidated toward the end of last year, a process still being finalised.