The answers to questions about the supply/demand ratio and what’s happening with seafreight rates seem to depend on how optimistic or pessimistic the commentator tends to be. What the capacity supply/demand is doing seems to get a conclusive response, but what it will mean remains an elusive answer. Everyone is agreed that the demand is getting firmer, and – although they all agree that tonnage supply is also likely to jump up – there’s a varied response to where rates are headed. A prominent ship’s agent is adamant that rates are firming, reaching historic highs on the westbound import trade from the Far East to SA, and the price war at the height of the global slump is definitely a thing of the past. “But,” he said, “there is a whole load of new tonnage coming into the market.” This, he added, like the two Far East lines, Cosco Container Lines and Evergreen Line, introducing a new “FAX” service on the SA-Far East- SA trade. This will operate with eight vessels of 2 700 to 3 400 TEU capacity. But, the agent told FTW, increases in tonnage like this will put pressure on the rates. “We’ll have to watch the market,” he said, “but I think the rates will soften a bit.” Alex de Bruyn, Safmarine’s SA trade director, thinks the opposite. “Currently flows remain strong,” he said. “The supply and demand equation will be tight. In this scenario, the rates will continue to firm and we foresee this pattern continuing the rest of the year.” And De Bruyn is not singling out any specific trade to enact this scene. “This scenario applies to the in and outbound Asia, West Central Asia, North American and Europe trades,” he told FTW. “The Europe trades will be going through a strong citrus season. We also expect good growth of imports after the World Cup.” Iain McIntosh, marketing manager of Mitsui OSK Line, is playing middle-of- the-road. “Rates are not going down or up,” he said. “I’d describe them as being ‘stable’ – and we would like to get more if we could.” McIntosh claimed to be “pretty certain” that – in the supply/demand equation – the increasing demand would effectively cover the extra tonnage expected. He also suggested that much of the new tonnage being deployed was not bound for the Asia-SA run. “Most of the extra tonnage is being aimed at the Far East-South America trade,” he said, “rather than targeting southern Africa.”
