Rate levels ‘a little better’ as demand stabilises

The current scenario on the Far East sea trade is not the prettiest of pictures, according to Glen Delve, commercial director of Mediterranean Shipping Company (MSC). “As has been globally reported,” he told FTW, “shipping lines are bleeding no more so than on the Asian trades.” Volumes plummeted, rates crashed and lines had to slash capacity on their Far East services, as taps closed on world demand for export goods from the Asian tigers. This was immediately followed by imports of raw materials to producers like China being stopped – as production capacity was cut back and companies started to survive on their stockpiles of raw materials. It all eventually led to lines declaring that rates were just not sustainable at the cut-throat levels they had reached, and they just couldn’t bear these heavy losses any longer. “Everyone in the industry agreed,” said Delve. “Rate restoration just had to take place.” Rate levels on the SA/Far East trade are now a little better, he reckoned – while noting, along with other shipping line executives in SA, that demand had stabilised and even lifted off the bottom of the trough in certain cases. “Volumes seem to be holding up,” said Delve, “so our current tonnage will be maintained for the foreseeable period.” And, although there have been capacity cuts, the MSC services between Southern Africa and the Far East are still plentiful. The line runs a rotation of vessels on a direct call basis, connecting Durban to Port Louis; Singapore; Xiamen; Kaohsiung; Hong Kong and Chiwan. It uses a fleet of vessels with an average capacity of 3 000-TEUs and core cargoes on the eastbound run of commodities – mainly chrome, copper, cobalt, scrap, steel, woodpulp and manganese ore. Incoming cargoes are more of the “general goods” variety – but with automobiles and car parts making a big contribution.