Rate volatility keeps shippers on their toes

The Far East route has been
a rollercoaster ride of highs
and lows – but for Cargo
Care Freight International
it’s become the company’s
biggest market, says CEO
Roland Raath.
And the stronger
rand has made it even
more attractive to South
African importers.
“This market climbed
to dizzy heights in 2005
to 2007 before flattening
at the end of 2008 and
tumbling down in 2009
with a mild recovery into
early 2010,” says Raath.
“Market volatility as
well as rate volatility means
staying in touch with trends
on a monthly rather than
quarterly basis.”
Over the past ten years
fuel and bunker charges
have added almost 40% to
ocean and air rates while
airfreight security costs
further complicate the
issue, says Raath. Which
is why importers have
struggled to get to grips
with landing costs.
“The traditional ocean
freight peak season
surcharge complicates the
market as importers face
a seasonal surcharge of as
much as 20% of the freight
rate. This spikes costs
upwards towards August of
each year and plays havoc
with landing costs.”
A regular and consistent
importer should benefit
from a consistent and set
rate for the full year, says
Raath. “But loyalty seems
to carry no weight in the
market – in particular
around peak period.”
While the downturn
in volumes over the past
24 months recovered
marginally in early 2010,
this was short-lived, says
Raath.
“It’s evident that
company fortunes lost
over the past few years
will take longer to recover
– but thanks to intense
sales initiatives the past 18
months have been record
months for us.” The ocean
freight market has slowed
down, rates have softened
and space is available
while a fairly steady rate
pattern has been evident
for airfreight, although
capacity is under pressure.
The golden rule is never
to take your eyes off the
rates because they’re
constantly on the move.