Shipper should consider suitability of vessels - Meihuizen SHIPPING LINES on the West Africa route are feeling the pinch as more and more global operators extract their share of a market which, by general consensus, is seriously overtonnaged.
Ultimately it's the shipper who pays the price as dedicated operators, with vessels designed for the trade, are forced to scale down services.
In Cape Town last week to review Angola South's plans for the year ahead was Angola-based principal Arnaldo Lago de Carvalho.
The line operates a dedicated service between Cape Town and Angolan ports. Intense competition recently forced it to reduce the number of vessels and port calls. It now offers a 20-day frequency on the route, with transit time between main ports CT - Luanda six days. De Carvalho is outspoken in his criticism of the rate-cutting policies which are the order of the day on the route.
Global operators are killing themselves. And it's because the lines are not run by owners but by brokers who are only interested in commissions. We have seen cases where brokers have come in, grabbed big parcels, and pushed down rates. De Carvalho recalls that five years ago, at the start of Angola South's service, the freight rate for big parcels was in the region of $2400. Now we get $1300. On top of that port costs have increased and fuel costs have increased. No-one can be making any money. Add to that the inefficiency of African ports, which means longer turnaround, and the line's costs are further extended.
We are trying to increase efficiency and reduce costs as far as possible, says Mark Kilbride of the ships agency division of agents Meihuizen Freight.
But there are limits.
We are determined to retain suitable vessels for the trade and not, as a result of rate erosion, bring on vessels that are not ideally suited. Those that we currently operate can guarantee discharge at all ports. And this is something the shipper doesn't always consider. He needs to be more aware of where he is placing his cargoes. Kilbride points out that by providing a dedicated service between South Africa and Angola, the line is creating some stability.
When you have lines coming in and withdrawing as they please, it merely pushes down rates and destabilises the trade for dedicated players.
We have some very loyal clients who have stayed with us even under pressure from other lines, but ultimately it's the bottom line that matters.
