Recession plays into the hands of import groupage specialists

The recession-induced
drop in import volumes has
clearly been good news for
consolidators.
“Many of the more
heavily affected importing
companies have reduced
their quantities from
FCL down to groupage
shipments and some of the
‘half-load’ (breakpoint)
groupage shippers have
reduced to smaller
quantities,” says Cargocare
director Sue Wood.
“This has been positive
for the consolidators, but
not good for the shipping
lines who have taken an
absolute hammering in
the past 16 months,”
says Wood.
“This will no doubt have
altered the dynamics of the
relationship and balance
of buying power between
them and we continue to
see equally competitive
rates coming from across
the board in the market.”
Along with the rest
of the industry, Wood is
concerned by the increasing
trend of ‘kickbacks’ being
paid, particularly on the
routes from China and
India.
“Because of these
‘incentives’ we have found
that it is becoming more
and more necessary to
buy locally and control
untoward rate arrangements
quite carefully. And this
strategy seems to be
working, especially in
China, where there’s been
a significant upswing
in volumes.
“The trend is no different
than most other African
import destinations and
has had major impact on
Shanghai – both for air
and sea. Due to the current
backlog from that area, we
are seeing upward pressure
on rates, which is being
exacerbated by the Euro/
Anglo shutdown of flights,
as well as the Chinese
expo season.”
In terms of exports,
Wood points to a gradual
reduction in volumes over
the past 18 months. “It
seems to be a widespread
trend, closely linked
to the rand’s strength.
Consolidators here
must be having huge
problems balancing their
international cabotage
and are desperate for
export traffic.”
For Cargocare there
have been some areas,
says Wood, but those seem
to be more related to the
company’s internal sales
efforts rather than any
specific market trends.
“We believe that the
syndicate formed by
Hanjin, CCMA, Zim
Lines, Wan Hai and Hapag
Lloyd that has resurrected
a transhipment service
previously offered, calling
from various ports in the
Far East, via Durban to
various South American
ports and back again,
could well be utilised by
the consolidators to
strengthen the BRIC
initiative (obviously
excluding Russia).”