News / Tradelanes: There's a buzz as Far East-Sub-Saharan Africa volumes grow

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South Africa is experiencing a spike in volumes from China and India, driven by an influx of renewables and Chinese automotive, but the upturn has not been mirrored in freight rates, which have seen no movement in recent months.

Forwarders active on the trade told The Loadstar imports from China and India by both air and sea had grown noticeably recently, but said this  was not simply due to seasonal demand.

“The enquiries we have had on exports from the Far East have been from the automotive and solar industries,” one forwarder said, noting that despite this, “rates have been stable with decreases on some shipping lines”.

Per Container Trade Statistics (CTS), volumes on Far East-Sub-Saharan Africa sailings experienced double-digit, year-on-year growth for nine of the first ten months of this year – February proving an outlier, with volume growth of just 5%.

CTS has yet to publish its November or December data, but August, September, and October saw growth of 22.2%, 35.2%, and 11.8%, respectively, with The Loadstar sources indicating the trend, for South Africa at least, was continuing.

1Up Cargo’s general manager for South Africa, Cindy Luyt, told The Loadstar that, from a month-on-month perspective, “movement in rates has been non-existent”, adding that carriers seem to have “waived” planned peak season surcharges.

Pointing to CTS’s pricing index for August, September, and October, The Loadstar’s Gavin van Marle said there had been “gentle month-on-month declines” for Far East-Sub-Saharan Africa trades, but sources repeatedly label South Africa a “law unto itself” in those trades.

Year on year, however, pricing on Far-East-Sub-Saharan Africa has proved markedly negative for carriers, which, after double-digit percentage upturns until May, have since contended with an average 25.3% rate of decline.

That figure is also reflective of the pricing index on the Sub-Saharan Africa-Far East trade, but that direction did not experience quite as a decisive upturn in the flow of goods that could have helped carriers bolster their rates.

What will be interesting is what happens with the additional capacity that has come online already this year on these trades – with more expected to be added over the coming months.

Noting a 7.3% increase in global capacity this year, to 33.2m teu, Alphaliner pointed out that Sub-Saharan Africa liner services received the second largest chunk of this, 575,410 teu, just 32,000 teu short of that added to Middle East and South Asia trades.

The Loadstar’s Charlotte Goldstone will provide a fuller analysis of this tomorrow, but it is worth citing Alphaliner’s claim that, together with the Middle East and South Asia, Africa is “now by far [one of the two] fastest-growing markets”.