Tariff hikes will affect SA growth

The past decade has been characterised by the terror attacks on September 11, 2001 and the increased security measures that followed, a commodity and shipping boom from 2002 to 2008 and the subsequent financial crisis that have made it difficult for players to make investment decisions. So says MACS Maritime Carrier Shipping managing director Felix Scheder-Bieschin, who predicts the uncertainty in the market following the 2008 financial crisis will persist for some time. “It is quite uncertain whether the crisis is over or not and this uncertainty extends to the effect the financial crisis has on growth rates, rates of exchange and inflation which makes it difficult for us to make investment decisions.” The crisis, says Scheder-Bieschin, followed a boom that started shortly after 9/11 and lasted until 2008. “The corporate landscape changed as companies grew tremendously during those years. Some companies that were leaders are no longer and a different landscape has emerged.” Though uncertainty over the crisis remains, it is likely one will see in future that transport prices will increase significantly and it may no longer be viable to ship certain commodities. “Transport at sea will become much more expensive and this will impact trade. Energy will be more expensive not only because it will become scarcer, but also because shipping lines will be obliged to use more sophisticated, cleaner fuel and this will in turn drive up that portion of our costs tremendously.” A problem particular to South Africa, adds Scheder-Bieschin, is the cost of handling vessels and cargo. “The National Port Regulator confirmed our suspicion that these are now the most expensive in the world and rising. At the same time authorities seek to generate even more revenue through tariff increases while port productivity is stagnating or declining. If this trend continues, growth in South Africa will be severely affected. “The high costs and inefficiencies are known worldwide by South Africa’s trading partners. We need new policies and a strong political will to address these issues and to fix the broken system.”