Freight rates on the Europe/ South Africa service are not sustainable, putting pressure on shipping lines to deliver a reliable and dependable service.
Persistently difficult market conditions have been impacting the cargo shipping sector at large with falling freight rates a global concern.
David McCallum, managing director of DAL Agency, said the current rates were simply not sustainable. “It becomes a very real challenge for us to to continue delivering a reliable and dependable service while at the same time engaging with shippers to responsibly move the achieved freight rates upwards.”
He said an encouraging development was that personal service, and the value thereof, was making a comeback. “We are noticing our clients on the trade to/ from Europe are increasingly assigning greater value and importance once again to personal interactions and service levels, rather than simply focusing on the relevant freight rate,” he said. “When there is a question or concern on a shipment, they want to have a local contact that is easily accessible and able to assist in providing relevant, accurate information.”
He said DAL had, over the past few months, strengthened its office network in Europe and the whole Mediterranean area thus enabling it to expand its market coverage, improve service levels, intensify sales efforts and increase the frequency of face-to-face customer interactions.
Asked about the outlook for the SA/Europe trade McCallum said they were cautiously optimistic about the level of trade at present.
“The looming question is how and to what extent Brexit is going to impact interEuropean trade and trade between Europe and Southern Africa going forward.”
He said at present the volume of cargo moving to Europe had remained relatively stable over the past few months.
“The recent strength of the South African Rand has not negatively influenced the export volumes. Furthermore, despite the low levels of rain fall experienced in certain fresh produce producing regions, the volumes are up on last year,” said McCallum. “We expect that trade will remain reasonably stable in the forthcoming months. The continued lack of rain experienced in certain regions in South Africa will most likely have an impact on the volumes of certain perishable cargo exported into Europe next year.”
The relative strengthening of the Euro in recent months may have a negative influence on import volumes from Europe; this movement does however present opportunities in the European market for South African exporters.
