THE NEW year will demand a tightening of the belts as far as two senior executives in the SA freight world are concerned.
Peter Krafft, m.d. of multi-national forwarders Ršhlig, and immediate past-president of SAAFF (SA Association of Freight Forwarders), put it this way: We're going to see some dark clouds come over the horizon next year, he told FTW.
One local, one international factor add up to two of these possible rain bearers.
Election year always brings uncertainty, Krafft said - a world norm, but one accentuated in the global view of developing countries (where SA sits in international perspective).
The whole world economy is also not in a good shape, he added.
Krafft also notes that big exporters are already reporting seriously falling volumes - expecting more to come soon. They're not too optimistic, he said.
We must tighten our belts, and get ready for it.
Dave Rennie, c.e. of Unicorn, and immediate past-president of the ASL (Association of Shipping Lines), is also looking for extra notches in his belt.
Certainly we are going to face another tough year, he told FTW. I don't see any of the fundamentals have changed much from last year - so it's a rock to a hard place.
A Rennie prediction for the global situation is that mergers will continue to be the trend.
But the big bugbear - and one that Rennie diagnoses as intolerable - is freight rates. With growing competition breeding a price-cutting culture, the rates for almost every SA sea route have actually declined in real terms over the past decade.
That's no cream for a shipowner. Said Rennie: Nobody can handle these levels - all made that much worse by the costly effect of heavy container imbalance.
Rates have to increase, he added, and sooner rather than later.
The election will have some impact, but, according to Rennie, it's the global situation which is the big rainmaker.
Both men, however, temper pessimism with positivism.
I'm positive that we'll manage it, said Krafft. We are better equipped (for volatile times) than most of the Western World. It's because we're more used to big fluctuations.
Like our 30% (dropping to 15%) devaluation against the US dollar, when they get the sweats about a one point drop.
It's a time for getting prepared for the next millennium in Krafft's thinking.
Rennie, meantime, is positive about the transformation process in Portnet.
They've now got a chief in charge; seem to be getting a lot of procedure, policy and philosophy sorted out; and we should see an improvement in port productivity.
The privatisation element, of course, Rennie added, will play an important role in this evolution.
We will come out of it at some stage, he said. But, looking in his crystal ball, he won't put any money on this happening in the first or second quarters. Anyone looking for an upturn will have to wait till the second half of next year.
By Alan Peat
