… but not everywhere, shippers say; Africas prospects look good and will certainly buoy up the container and MPV sectors that look headed for over-capacity
The shipping industry is of one view right now: that the heady days of recovery seen in 2010 will not be back for years to come as the market absorbs the tidal wave of new capacity that is still arriving.
Whether it's containers or dry bulk, very large or handy size, the outlook is much the same. This year's energy price rises have taken the steam out of the market, and the looming chaos in European finances – propped up by hiking interest rates it seems – threatens to depress the outlook further.
Except in sub-Saharan Africa, that is. This year and next's economic growth forecasts put SSA once again somewhere between the steady USA and soaraway China. Led by oil most of Africa's exportable commodities, hard and soft, are doing well. The China market continues to set the pace, and China needs everything that Africa can produce, and more. Container shipments in all forms including groupage continue to do well, and the lucrative project cargo market is looking particularly good, especially if it has anything to do with oil. But serious competition from overseas, and the rival airfreight operators, is looming everywhere. Leanness, flexibility and being up to speed on market info remain the watchwords for success.
So what are SSA's specialised dry cargo agents doing to keep their bottom lines as healthy as the region's rosy economic prospects?
The key requirement for shipping lines from all parts, and the forwarding/clearing agents who service them and are fortunate enough to be based here, is to offer a guaranteed effective, safe and prompt delivery service at a competitive price always, whether it is to Apapa Port's industrial customers based just a few kilometres away at Ikeja, or Copperbelt operators hundreds of dusty miles from Walvis Bay. Whichever it is a reliable delivery service well within a week at most is required, however busy conditions are out in the roads. Waterside clearance and border delays have all to be accommodated within this. And as much information should be available to and from the operator in ASYCUDA or similar high-tech form, in real time, as possible. This is what will distinguish the good from the best as times get tougher.
And with better conditions being expected here than just about everywhere else (outside Shanghai and the Guangdong ports, that is) – and that includes most Eastern and SADCC ports – the best can be expected to turn up in eager droves next year. It's not going to be an easy time for also-ran forwarding agents.
What are we basing this guarded optimism on? Well, there's the economic forecasts of course, from such top-rated sources as the IMF and the German crystal-ball institutes. Africa was a star attraction at last year's World Economic Forum, with a competitiveness record that is much improved recently – and not just in the industrialised north – coupled with the ability to supply nearly all of the commodities that the fast-growing parts of the world want. Sadly, still in mostly non-value added form admittedly.
Second, there's that improvement in rates for most cargoes seen last year when the industrialised countries shook off the cold they caught in 2009; still not enough to justify the amount of laying down of new bottoms, including of specialised carriers, that took place in the Far East nevertheless. Even the ubiquitous containers started to run short. Prospects in OECD countries are unexciting now; it's business in the developing world which is widely forecast to be best, which must mean a boom for all the container trades including those multi-purpose vessels that connect China with Africa. Project cargoes – those heavily insured capital-goods shipments that keep all this growth stoked up – have been looking particularly good as 2011 matures into the second half.
On the other hand OPEC, which maintains its own independent monitoring service from its headquarters in Vienna, continues to issue cautionary warnings about the economic recovery running into the sand. The froth has already been skimmed right off the market for its own VLCC businesses, in which mercifully very few indigenous shippers are involved, for example.
And doubts persist about how the general-purpose shipyards will react to the apparent reluctance of consumers in the industrialised countries to celebrate economic recovery by going out and buying more goods – and not just on the troubled Euroland periphery. Even in prospering Germany it's saving for a rainy day that is back in fashion.
Deliveries are already outpacing new entries in the orderbooks, and a major surplus of capacity for container vessels of most categories is being forecast from 2012/13.
