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).”