Shipping lines cut back as economic crunch hits

A number of well-established shipping services to-andfrom SA are going on the “suspended” list, as the global economic crunch begins to bite the seafreight industry. It started as far back as last September when the SA-Europe Container Service (Saecs) – comprising Maersk Line, Mitsui OSK Lines (MOL), Safmarine and Deutsche Afrika-Linien (DAL) – phased-out three vessels on its intermediate service The most recent announcement has come from Maersk Line/Safmarine, which have suspended their Far East- SA ‘Safari 2’ loop (in which Hamburg Süd slot charters space). This service used six ships each of 4 700 teu capacity. Maersk’s SA MD, David Williams, confirmed to FTW that it continues to offer its direct Far East-SA ‘Safari 1’ loop, to which a call at Port Elizabeth (until now covered with Safari 2) is added. The Safari 1 is ensured with seven ships of 4 800 teu. Maersk also serves the Far East-SA market through the relevant legs of the two FE-Durban-East Coast South America (ECSA) services that it operates in partnership with Hamburg Süd. A Durban eastbound call is also added on the FE-West Africa ‘FEW 2’ service. Said Williams: “It (the suspension) is in line with what other lines in the shipping industry are doing, and indicative of the global downturn.” In a similar boat is MOL, which, according to marketing team leader Andrew Weiss, has cut out its ‘Zax’ Durban- Maputo-Asia service. “We will now be using ‘WA1’ service which serves West Africa,” he said. “On the return journey, this will now be calling at Durban and Maputo on the way to Singapore.” Hamburg Süd is itself in a belt-tightening phase, according to SA GM, John Blessington. “In the global turmoil, freight rates have dropped so much,” he said, “and volumes are way, way down.” How long will this last? “We are looking at a bit of an upturn – and it can’t go any lower – by mid-2009,” Blessington told FTW. And, helping to trigger this, he added, will be the current Asian tiger of China, which he expects to begin re-awakening in the next few weeks as its stockpiles of raw materials dwindle. “Due to deteriorating market conditions,” said Blessington, “Hamburg Süd and Aliança decided in December to immediately reduce capacity in the trades between Asia and SA, as well as Asia and the East Coast of South America (ECSA). “A weekly service frequency will be maintained in these trades. However, total capacity has been reduced by 2 100 teus per week in the period from December 11 through January 8 and again in the period from February 20 through March 27.” For the moment, it’s happier news coming from MSC. “No services have been cut,” said marketing manager, Glen Delve, “and we continue as we are. “We also have no immediate plans to make any changes to the fleet and schedules on the SA trades.” FTW is led to believe that it’s the same story for the Taiwanese carrier, Evergreen Marine. As far as we can gather, they also have made no changes to their fleets or schedules on the Far East-SA run. The estimates of the loss of cargo volumes from FTW’s seafreight contacts are all high, double-digit figures. One ship's agency executive put the downturn at a cut of 40%+ for exports, and 30%+ for imports.