SA Merchant marine on the cards

PLANS HAVE been set in motion for the creation of an SA merchant marine and an SA cargo airline within the next 3-5 years. It’s part of the Industrial Development Corporation’s strategy to improve South Africa’s logistics infrastructure and introduce a BEE element into the industry, head of transportation and financial services Kugan Thaver told FTW. Discussions with key stakeholders with a view to setting up a South African shipping line are currently under way, said Thaver, who heads up the IDC’s Transport Services Sector. The division was established three years ago and cut its teeth on the roadfreight sector. Through a joint venture with Absa Bank it has provided funding for black SME operators in the trucking industry. The project has achieved some measure of success, although the lack of available contracts has been a challenge to operators in the field. “We’re now trying to move into other areas and believe that aviation, maritime and logistics are the big three in the freight industry,” said Thaver. “In terms of our maritime strategy, our first port of call is to engage industry players, and that’s what we’re involved in right now. “The ultimate aim is to increase shipping capacity by enabling the establishment of an SA merchant marine.” And while Thaver believes that practically it would be difficult for an SA line to compete with European and other global players, he sees a clear niche for an intra- Africa feeder operator. “I think it would also promote downstream industry – if we need coastal vessels maybe South Africa could start manufacturing them.” This is, however, a longterm development. “It won’t happen overnight – it will take at least 3-5 years and the strategy will be to get previously disadvantaged people involved in the running of the line. “We believe it will ultimately improve the logistic capability of South Africa and introduce a healthy competitive element.” The IDC has similar aspirations in the aviation sector, and here Thaver sees a shorter lead time of 2-3 years. “We’re looking at a dedicated SA-based cargo airline, and would initially consider a joint venture with an existing operator. “For us it’s about partnerships first and from there we’ll move into start-ups.” Recent reports indicate that SAA is to be split into various divisions, among them SAA Cargo, which is looking for a strategic partner. “Maybe this is an area where we could bring our financial muscle,” said Thaver. Fruit and perishables would be among the airline’s core focus industries. “The need is to stimulate intra-Africa trade and perhaps once the capacity is there shippers would have the confidence to move cargo back to South Africa, promoting a transhipment hub for exports to global markets.” The IDC is currently in discussions on how to roll out the plan, says Thaver. But logistics is not only about shipping lines and airlines, it’s also about infrastructure. “We will also look into joint ventures with local partners in Southern Africa to build capacity like cold storage or container handling so that we’re not only serving South Africa but the continent as a whole. “If they develop we will also prosper and ultimately that’s in everyone’s best interests.”