Europe-Africa trade: more one-way traffic these days
Roles have reversed, as far as volumes are concerned, between Europe and Sub-Saharan Africa (SSA), ...
Africa-Far East trades are serving up “an absolute dog’s dinner” for ocean borne cargo, with congestion in Singapore compounding the problems provoked by the Israeli-US war on Iran, but energy-linked products are offering glimmers of opportunity.
Awaiting March numbers from Container Trades Statistics (CTS), expectation is these will reflect what The Loadstar has been hearing from a plethora of forwarders active on this tradelane.
“Far East volumes are down slightly, Middle East volumes have all but vanished,” 1UP Cargo’s general manager for South Africa, Cindy Luyt, told The Loadstar, adding that there were no growth spots visible for the near future.
On Africa-Far East trades, Ms Luyt said: “Exports seem to have dropped, equipment shortages from carriers, together with the rates, have increased. And the congestion in Singapore has had a serious effect.
“Import numbers also seem to have also dropped; we suspect due to local economic challenges. We had a 42% fuel surcharge implemented in one month for trucking, as an example, which had serious knock-on effects.”
On the situation in the Middle East, Ms Luyt said numerous exports and imports had been cancelled, and without a favourable resolution to the war in “the very near future, we all need to buckle to a new reality”.
She said sea freight was “an absolute dog’s dinner, with very few options” as far as port space was concerned, but she and the team were managing to find airfreight capacity into the Gulf – albeit at a price.
Another forwarding source provided a less gloomy outlook for the Africa-Far East trades, telling The Loadstar it “remains active”, but said the picture last month was more mixed, “than uniformly expansionary”.
Close ties with China appear to have helped South Africa, the Asian giant topping the country’s import and export partner list, but the source was less certain what to expect with the coming CTS March numbers.
“Growth spots appear strongest in energy and industrial: globally, Chinese solar-panel exports to Africa surged sharply in March, reflecting energy security concerns, pre-price-increase stockpiling, and shifting Chinese export flows,” they said.
“The Hormuz situation has affected the lane more through cost, risk premia, bunker exposure, insurance, and pricing behaviour than through direct physical disruption to South Africa–Far East routings.”
Consequently, they said, the rate impact was stabilising, as opposed to accelerating, and noted Linerlytica’s suggestion that the broader impact on the container market from Hormuz was starting to wear off, and sufficient capacity/equipment was back online.
“Rates, therefore, appear firmer than a normal soft-market expectation, but not in a disorderly spike. The better framing is stable volumes, selective growth pockets, elevated cost pressure, and limited direct routing disruption,” the source added.
“One caution is that South Africa has also imposed steep duties on structural steel imports from China and Thailand, which may dampen or redirect some steel related Far East flows.”
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