WITH RAPID growth in fruit exports to Europe expected over the next few seasons, reefer (refrigerated) sea transport to this marketplace could see new line names appearing on the shipping schedule.
There could be more demand than current capacity, according to Hennie Olivier, administration manager of the Perishable Products Export Control Board (PPECB), and new lines might have to come in to carry this expected excess.
But, he warns, it's not going to be an open door market.
Current legislation and the long-standing Ocean Freight Agreement restrict just how free a market there can be. And, Olivier adds, the cyclical factor inherent in perishable exports makes it almost impossible for the PPECB to guarantee big volumes to newcomer lines.
The first part of this will please the other major shipping lines which wish to grab a profitable share of this market. But the second part is a warning for them not to get too excited, and start putting large fleets of ships and reefer boxes into the SA trade in expectation of a perishable gold rush.
The PPECB's reticence to open the doors is a plausible case.
The Ocean Freight Agreement - originally signed up in 1929 with the Europe-SA Conference, which houses the present SA-Europe Container Service (SAECS) - has played its role. This after being renewed in 1977 (the start of containerisation) and 1992, and lasting until 2001.
The original deal was that SAECS (as it is now) would guarantee reduced northbound rates for agriprods, while it was, in turn, guaranteed a certain minimum volume of exports at stated times of the year. This effectively subsidised SA's fruit (and otherperishable) exports, and made them keenly price-competitive in a very challenging marketplace.
Although the subsidy element has now disappeared, the conference lines still offer the promise of a quality, long-term service -and backed this up with a US$100-million investment in a fleet of specialised reefer containers to go with the tight scheduling of its European run.
But other shipping lines want in to this market. Something that is not too easy for them to do, with that Agreement, and the strong presence of Universal Reefers (UK) on the bulk shipping side of the business.
But, said Olivier, the PPECB (which statutorily must approve the quality of all perishable products, including fruit, the ship and containers carrying the cargo) is not averse to others being in this shipping trade. We have no problem provided it fulfils the quality demands currently in force, he added, and the quantities are sufficient to meet our agreement, and still leave capacity for others.
