'Safari split was inevitable'

03 Nov 2000 - by Staff reporter

Alan Peat speaks to
competitors on the route

THE LATEST development in Safari - where P&O Nedlloyd has resigned effective next April, and the remaining members are busy reshuffling the cards - is no great train smash, according to other line executives on the Far East sea trade.
I'm surprised it hasn't happened before, said one, especially when Maersk moved in.
Meantime, Jerry Hookins of NYK told FTW that his line had been watching these latest events with great interest - but he also feels it's a natural progression.
Given that they are all large, reputable lines, he said, our only concern is management of trade capacity. But we're sure it will happen.
Murray Paul Grindrod, m.d. of Quadrant Container Line (part of the other consortium, GEX) is not surprised that the onward-route to South America is also part of the latest equation, PON definitely intending the link-up, and Safmarine (as a Safari member) hinting at it.
I think that many of the lines on the Far East-SA trade have South America on their minds, he said. It was only a question of time before somebody else actually moved in.
Looking at the Safari split-up, Grindrod suggests it's not exciting in itself. Effectively, it's only a reshuffling, he said. But what does concern him is the extra potential tonnage that will come onto the route.
That was also a concern of another shipping line source. The Far East-SA-South America trade is one of the better paying of the global routes, he told FTW, and obviously attractive to lines.
But, he said, the idea of the extended service to South America, along with the new consortium, will put rates under pressure, he said.
At the moment, only a few lines have calls on the east coast of South America, and those coming in will add to the competition. I suppose it all depends which ports of call are decided.
As for the Far East-SA leg, this line executive also feels that extra tonnage will be over-tonnaging.
But he suggested that none of the other lines would want to lose market share, and that the reaction of these shipowners - particularly the independents - could be quite interesting.
There was also the hint made to FTW that this split might see the end of the comfy, all pals together, act put on by the various consortia members. It could, for example, it was added, see the end to the G8 grouping, and the rate stabilisation process that accompanies it.