Higher newbuild prices will increase freight charges
RAY SMUTS
IT’s a foregone conclusion that
the provision of shipping services will cost the lines “a lot more”
this year, says Alan Jones, Safmarine regional executive
for Africa.
“The container trade outlook as it pertains to container supply and demand remains very bullish for the period 2004-2006 and beyond. As a result we expect charter rates not only to remain high but to increase even further, particularly if vessel availability remains low.”
According to Jones, shipyard order books are full and new orders for large container vessels placed now are only likely to be delivered around 2008. Aware of the demand for tonnage, shipyards have increased newbuild prices - a factor that will impact freight rates.
The expectant increase in
freight rates notwithstanding,
Jones foresees continued growth
in all trades from South Africa
and believes the country’s importance as a hub for the
rest of Africa - particularly
sub-Saharan Africa - will continue to grow in 2004.
“Major international companies are returning to South Africa and their return brings unknown potential and positive implications for the local economy. However, increased beneficiation of raw products is important if South Africa is to maximise growth.”
Jones believes South African industry should follow the example of the auto industry which has had huge success in the beneficiation of raw product and urges exporters not to base their global competitiveness on a weak currency but on product quality.
“The recent strengthening of
the rand hit exporters hard and
too many producers continue to
be susceptible to currency fluctuations.”
