Perishable exporters should look at entering into longterm partnerships with shipping lines rather than being driven by volatile rates, according to Esteve Servajean, managing director CMA CGM South Africa. “Volatile freight rates are probably the biggest challenge in the business,” he told FTW. “It affects the turnover of the entire shipping business, with the fluctuations representing several million dollars. In less than five years we have already seen two cycles come and go – all of which impacts on our ability to deliver the necessary infrastructure to perishable exporters.” He said with contracts never signed too far in advance, container shipping lines were never sure of the volumes they would have to carry. “We have to raise money by attracting investors, but investors don’t want risk and when you only have short-term contracts in place it is risky. For us the solution lies in longterm partnerships,” he said. “We need longer contracts guaranteeing us volumes for two or maybe three years. That will allow us to design the best service and have the best infrastructure available.” He said there was no sense in installing reefer plugs on vessels for the short term or developing a route for a contract of a few months only. “Shipping lines need the longer commitment from exporters to effect the changes that they need,” he said. According to Servajean, while the container business continues to see massive growth – also in the booming African market – the perishable sector does hold some significant challenges for lines. “To ensure we have the best service we have to invest massively – not just in the obvious infrastructure such as having sufficient reefer plugs on board, but also in the newest technologies that allow perishables to stay fresh for the longest possible time,” he said. “Then there are the human resources to take into consideration as reefers require expertise and skilled staff. Reefers require dedicated teams working around the clock.” He said sustaining such investment was only possible if there were long-term partnerships in place where liners were assured they would be getting the perishable cargo over a period of time and that it was not cyclical and based on freight rates alone which are almost always volatile. INSERT & CAPTION We need longer contracts guaranteeing us volumes for two or maybe three years. That will allow us to design the best service and have the best infrastructure available. – Esteve Servajean
