SA lines evaluating SA capacity requirements

While there are definite indications that global vessel capacity is set to be in an oversupply position by year-end – unless the lines convert to more slow steaming or lay up more of their fleets – will that same position apply to the SA sea trades? Pacific International Line (PIL) agrees with the comments regarding capacity and possible slackening of volumes. “However from our perspective there are no plans to change anything at this stage,” said Ivan Naik, MD of PIL South Africa. “We will continue as we are.” In those trades where Hamburg Süd has deployed extra peak-season capacity, and a drop in demand is observed, that capacity will be removed accordingly, according to Sam Moffitt, GM in SA. “Any line looking at its bottom line should be doing the same,” he told FTW. Given high fuel costs, Moffitt reckoned it was simply not economical to operate ships at lower utilisations. “While fast and reliable services such as ours are preferred,” he added, “no line will achieve utilisations higher than the overall market on a consistent basis.” A Far East line executive suggested that “conservative” is the way to be looking towards yearend. “I take the viewpoint that any newcomers who want to come into the trade are welcome,” he said. “We wish them all the best, because the rates are already on the fade – with westbound rates below US$1 000/TEU. “We’re already overtonnaged, and I see big changes in buying patterns – with shippers spreading cargo loads over longer periods. A definite change in inventory patterns.” For 2011 he certainly envisages growth – “but much slower than before”. Meanwhile, Safmarine’s SA trade director Alex de Bruyn said: “The quick answer is that with regard to SA/Europe and SA/ North America consortium services, there are no immediate changes to capacity plans in 2011. Indeed, neither for the SA/ Far East and SA/West & Central Asia (Middle East and Indian Sub-Continent) strings. “However the lines continue to monitor demand and will respond to both decreases and increases as deemed appropriate.” Glenn Delve, marketing director for MSC, predicted no changes due in the line’s SA global schedules. “We never had to lay up any vessels during the economic crash, so we’re unlikely to do so now,” he told FTW. Indeed, Delve expected exactly the opposite. “There is continuous development planned from MSC globally for next year,” he said.