Stronger rand helps revive imports

The sea trade between SA and the Far East has taken a real battering so far this year, according to figures released to FTW by Maersk Line. “Container traffic to-and-from SA has seen a significant drop in volume of around 20% from 2008 to 2009,” said MD David Williams,“this being reflected in the Transnet National Ports Authority (TNPA) statistics when comparing year-to-date volumes – with the largest downfall in imports. “The Far East, being the largest container trade, has experienced its share of the downturn, both in terms of volume and freight rates. Far East import volumes for Maersk Line have dropped compared to 2008 fuelled by a weaker rand during the period from the fourth quarter of 2008 to the second of 2009 (Q4/08-Q2/09) as well as a decline in confidence in the retail sector.” Also, he noted, exports to the Far East have been hard hit by the commodity price downturn in Q4 2008. Base loads such as ores, minerals and metals have dropped significantly compared to last year’s loadings. The drop in demand for space on vessels has forced several carriers to rationalise their capacity on the Far East-SA trade. Although markets are starting to stabilise, this capacity will not necessarily be replaced in the short- to medium-term. “As of beginning Q3 we have seen a recovery in both in- and outbound volumes,” Williams added. “Aggressive fiscal and monetary stimulus has assisted to revive domestic demand in markets such as China, Thailand and Indonesia. Even though these economies are only starting to show signs of an upturn, there is an evident increase in demand for raw materials and commodities from SA.” Maersk’s market analysis also showed that the strengthening of the rand had assisted in reviving imports to an extent. Lines are currently experiencing capacity constraints out of the Far East following the China export peak season which Williams expected to last up to at least October/November. “The good news out of all this,” Williams told FTW, “was that those much-needed ocean freight rate increases are being achieved on both inbound and outbound cargo.” In addition to its extensive coverage from Southern Africa to the Far East, Maersk Line is also introducing a fortnightly (induced) call of its West Africa-Far East service (string 1) into Richards Bay for exports. “The call offers a reliable and competitive service linking the Richards Bay market directly with the Far East,” he said.