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Shipping-container volumes set for record-breaking year

The global economy might be slowing‚ but when it comes to shipping-container volumes‚ things are at least looking up.

Volumes are on course for a record year‚ with world loaded container-traffic volumes expected to break the 200-million TEU (twenty-foot equivalent unit) threshold for the first time.

This was revealed by Transnet Group CEO Siyabonga Gama during his address at the official opening of the inaugural two-day Terminal Operators Conference Africa 2017 at the Durban International Convention Centre this week.

Gama kicked off his speech with “some good news” contained in the latest Drewry Container Forecast Report‚ which was released on Friday.

Gama said the report predicted that world loaded container traffic would‚ this year‚ break the 200-million TEU threshold for the first time.

“This increase in container traffic is on the back of an improving macroeconomic scenario‚ with the IMF [International Monetary Fund] once again making a small upgrade of 0.1 points to both its 2017 and 2018 world GDP forecast. This follows similar incremental improvements made over the past year‚” said Gama.

He said the 2017 African Economic Outlook report by the African Development Bank‚ released earlier this year‚ has shown that from 2007 to 2015‚ Africa’s light manufactured goods imports tripled to reach $260-billion.

“Africa’s prospects for greater regional trade are also highlighted by a consumer market of nearly one billion people‚ the rising number of affluent consumers‚ and the increasing mobility of investment capital‚” said Gama.

However‚ he said the flip side of this was that over the past few decades‚ the sub-Saharan African container market has been challenged by slow development of quality infrastructure‚ which has led to long ship waiting time.

African ports have remained underdeveloped in comparison to other port systems around the world‚ he added.

“With such a high dependence on external trade‚ productive and efficient ports are critical for Africa’s growth. All of us here today have a vested interest in ensuring that our countries optimise freight efficiency and bring products to market faster across the continent — and for less cost.”

Gama said the cost of moving goods was still very high and is passed on to the consumer‚ thereby impeding Africa’s ability to be competitive in pricing.

Poor infrastructure has‚ over the years‚ severely impacted intra-African trade‚ which is currently sitting at about 16%‚ Gama said.

“The combination of years of underinvestment and exploitation has meant that African ports‚ roads and railways were mainly designed and built to facilitate transportation of raw materials and resources to markets outside the continent‚” he said.

He said the poor and inadequate state of much of Africa’s transport network was holding many countries back from competing effectively in the global market.

“Effective transport networks are a key component of the investment climate‚ enabling access to markets and reducing the costs of doing business. Africa’s challenges are not only the lack of investments in infrastructure‚ but also the distance between the hinterland and ports‚” said Gama.

He said some common challenges and issues facing African countries were:

• Poor linkages among transport modes cause long delays and raise costs in the movement of international freight;

• Logistical services are in their infancy‚ and their development is impeded by a wide array of administrative‚ regulatory and governance barriers;

• Lack of capacity building and skills development in the freight handling sector; and

• Underinvestment in port‚ rail and pipeline infrastructure on the continent‚ and not enough advance planning.
Source: TimesLIVE

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