News / Tradelanes: Africa-Europe volumes caught in 'a wind of change'

Forwarders remain uncertain over the prospects of increased sub-Saharan Africa-Europe volumes, a recent spike notwithstanding, given the greater emphasis being paid to trading relationships to the continent’s east, with notable upticks in Chinese and Indian volumes.

That emphasis has in part been driven by long-standing economic relationships with European nations and struggles around financing and currency fluctuations.

Tamsir Traore, CEO of pan-African logistics provider Logidoo, told The Loadstar: “A drop in volumes from Europe can be attributed to slower demand in key African markets, due to inflation and currency depreciation – see Nigeria’s naira and Guinea’s franc.

“And then there are issues surrounding tighter access to financing for importers, which is leading to much more cautious ordering.”

Perhaps most of all though, there appears to be consensus among forwarders that the continent’s merchants are turning to Asia, with Mr Traore and 1Up Cargo’s general manager for South Africa, Cindy Luyt, highlighting the cost-competitive nature of Asian shippers.

Ms Luyt told The Loadstar she expected this turn to the likes of China and India to be something the continent was eyeing with the long-term in mind.

She added: “I honestly see China, India and other Far East countries as trade partners, rather than Europe, in both the near and long term. The quality coming out of the Far East is often equal to, if not better than, that from Europe; and the costs including shipping appear to be lower.

“There are a number of European businesses which have also moved their manufacturing to Asia. Reciprocal trade from Africa to the Far East is definitely also growing rather rapidly.”

Having seen Far East-Sub-Saharan Africa volumes climb 11.4% year on year in April, they shot up by 33.8% a month later to surpass 410,000 teu, according to Container Trade Statistics (CTS), with Ms Luyt citing the reciprocal investment.

By contrast, Europe to Sub-Saharan Africa volumes dropped 2.5% (for a total of 193,152 teu) in April, while Sub-Saharan Africa to Europe volumes dropped 12.8%, to 92,910 teu.

Some could read the May figures as indicative of a shift in the wind, with Europe-Sub-Saharan Africa volumes up 3% year on year, to 176,000 teu, and Sub-Saharan Africa-Europe up 0.2%, to 88,400 teu, alongside a 7.7% rate hike in both directions.

Noting the hike in rates, Mr Traore nonetheless said that, since the first quarter, volumes from Europe had deteriorated, down 8% quarter on quarter. And those rate hikes, he said, were especially evident on lanes like France-Dakar and Spain-Abidjan, but he echoed Ms Luyt’s suggestion that rates on the lane had been pronounced, with “minimal adjustments”.

He added: “Rates on this corridor have remained relatively stable to slightly upward, driven by tighter available capacity on certain routes, especially secondary ports.”