News / Upswing in LatAm-Africa traffic, but capacity may be a challenge

Poor capacity options could hobble one of the bright spots in global trade with increasing cross-directional demand from shippers in between Africa and Latin America.

Forwarders from both continents have told The Loadstar in recent months that, as volumes struggle on more traditional lanes – with worries of decreasing Africa-Europe trade – they have managed to make gains from doing business with one another.

Cindy Luyt, GM for 1Up Cargo in South Africa, said: “We noted in the past year that there has definitely been an upswing in cargo moving in both directions with LatAm.”

A position echoed not only by other forwarders on the continent but from those across the southern Atlantic, with AGL Cargo’s Jackson Campos telling The Loadstar the firm is, “in fact, a big exporter to Africa”.

Asked which verticals have proved particularly conducive to this trade, forwarders noted that agribusiness, food, and industrial goods into southern Africa had proved particularly strong.

On the reverse leg, Mr Campos pointed to increasing exports of agriculture and minerals as key verticals, noting that while “still smaller” than flows from LatAm into Africa, this return leg was an improving prospect.

“The LatAm–Africa corridor is clearly developing into a growth lane, and we see consistent demand, especially from Brazil to southern Africa,” he continued.

“However, the improving trade is creating challenges of its own, particularly with regards to balance and equipment. The main issue today is capacity. On the ocean side, there are very few direct services between South America and South Africa.”

Evidencing this, eeSea identified just two Africa-LatAm liner services a month, although perhaps pointing to the increasing demand, it showed that between January and August this year there had been between three and nine direct sailings each month, with monthly capacity varying from 9,000-17,000 teu.

Consequently, shipments are being routed via West Africa or Europe, increasing transit times and putting pressure on vessel space.

This, Mr Jackson continued, was apparent during peak season, with carrier tendencies to often roll bookings or to push them forward because of limited slots, adding that while airfreight was available for “urgent needs”, it was restricted, “and pricing reflects that”.

Noting the new markets opening up on both continents, Ms Luyt said for those seeking to tap into them, “rates and lack of regular direct service by both air and sea remain a challenge”.

Indeed, she pointed to Maersk’s decision to discontinue a direct service between South Africa and the Americas from 1 October, which will lead to a sharp increase in both rates and transit times, as just one of the problems the emergent market was facing.

Nonetheless, according to Rotate’s Capacity Database, there has been a notable upturn in available tonnage offered by airlines, with LatAm-Africa capacity up 22% year on year.

Much of the growth has been driven by surging exports out of São Paulo’s Guarulhos International Airport (GRU), with some 24,765 tonnes offered for a year-on-year upturn of 31.7%, while smaller airports saw growth rates of 700%, albeit from a far lower level.

Overall, African airfreight capacity may have been down 4.1% year on year, but there were notable bright spots, with OR Tambo International Airport up 270%, to 4,181 tonnes.

Similarly, Senegal’s Blaise Diagne International Airport experienced a 271% increase in offered capacity, 22,173 tonnes, reflecting claims made to The Loadstar earlier this year that West Africa was undergoing major economic changes.

On the container line side, Mr Jackson said: “Carriers are watching the lane closely, but they will only add consistent capacity once volumes show a steady trend.

“For now, space remains tight, and shippers must plan ahead, secure equipment early, and allow flexibility in routing. The fundamentals suggest growth will continue, but infrastructure and capacity need to catch up.”