Squeezed auto industry will impact export volumes

The downturn in volumes on the UK/North West Continent routes is already evident – but the extent to which this is recessionrelated rather than seasonal will become clear in the months ahead. “The southbound market is heavily dependent on the automotive sector both in terms of CKDs, parts and subsuppliers,” says Safmarine’s Africa trades executive Alex de Bruyn. “This segment in the South African market has been markedly affected by current economic events in terms of local sales and production for local demand as well as exports. “Both are down, and if a substantial proportion of your imports from Europe are aligned with that segment you would expect overall that there would be a reduction.” Catalytic converters and seat covers are among the major industries that have sprung up around MIDP for export on Safmarine vessels. However for Safmarine, auto exports are not a major focus. “A substantial portion of our total exports are reefer and that looks to be a good season after good rains last year. But volumes will of course depend on how the recession affects the European consumer.” The route is however far less volatile than the east-west trades and is unlikely to see significant schedule changes, particularly from an SA-Europe Container Service point of view, says De Bruyn. “The Saecs deployment is no different from last year – we’re running a weekly core service or main string with seven vessels and an intermediate service which will be weekly during the reefer season with seven vessels, reverting to fortnightly in the off-peak season between September and January.” Late last year Saecs cut back the number of vessels on its intermediate service – “and this was really in response to demand,” said De Bruyn. He doesn’t expect the downturn to be sufficiently significant to force a review of capacity deployed – but that hasn’t been ruled out completely. “All lines will be looking at supply versus demand and will be adjusting capacity if and where necessary, says De Bruyn. The volume decrease could have positive benefits for congested ports both here and in Europe, but is unlikely to enable Saecs to reduce its vessel deployment. Looking ahead, it’s likely to be a fairly rough ride. The demise of independent SA Independent Liner Services late last year has already changed the landscape in terms of capacity. Conventional logic for South Africa, in De Bruyn’s view, should see the start of an upturn in the last quarter of this year, or the first quarter of 2010 – the industry will no doubt be watching global developments with a keen eye.