Pirate Busters - American Shipper

AGOA benefits beyond 2015.
Lafont said Africa’s farmers and agriculture
industry faces many challenges.
“International competition is not very
fair to Africa. There are a lot of subsidies,
and it is difficult for Africa to stabilize its
agriculture because of the great variation
in commodity prices,” he said. A stronger
agricultural sector could benefit the continent
greatly, he added, encouraging people
to farm rather than move to the city.
Madsen of APM said that going back
to colonial times, Europe dominated trade
with Africa. But there has been a big shift
over the past decade with Asia, particularly
China, becoming the region’s biggest trading
partner, particularly as an exporter of
consumer goods.
Except for a small number of countries
,such as South Africa or Egypt, not many
consumer goods are produced in Africa,
and China has become a major source for
products such as clothing and electronics,
he said.
Africa is “a continent where you import
consumer goods and you export raw materials,”
Madsen said.
That has a big effect on shipping, with
many exports leaving on bulk or breakbulk
vessels, while many imports arrive in
containers. Many export containers, carry
“fresh air,” he said.
As containerization has become more
prevalent over that past 10 to 15 years,
many African ports have expanded container
facilities, converting old general
cargo docks into container ports. Many
also handle roll-on/roll-off ships as imports
of new and second-hand cars move to the
continent from Europe or the United States.
Stephen Hayes, president of the Corporate
Council on Africa, believes “the U.S.
needs to be much more actively engaged
in Africa. The U.S. technically is still the
largest investor in Africa but about 70 to
80 percent is oil and oil-related matters, so
it’s not long-term investment. It’s not like
a 50-year investment, but probably a 10-20
year investment.
“We need to invest in just about every
other sector and throughout the continent,”
he continued. “If you take several countries
out of the picture, then the U.S has very
little investment in Africa. Compare that to
China, which is invested in just about every
country in Africa. Also Japan, India and
LOGISTICS
the Gulf states are increasing investment.
Once you take energy out of the equation,
even South Africa is a larger investor in
the West of Africa than the U.S.”
Lack of infrastructure has a strong effect
on how the shipping industry operates
in Africa.
“If containers are bound for delivery in
consumer areas of big cities, it goes out to
distribution warehouses,” Madsen said.
But in many locations if cargo is bound
for or originates far inland, it is stripped
or stuffed at the port because roads are
not good enough to run container trucks.
Lafont agrees. “Unfortunately the roads
are not good enough, and I am afraid to say
they are probably deteriorating” in many
locations. Weight restrictions are often
ignored, though he said some countries
are installing scales to prevent overloading
of containers.
However, there are some exceptions.
South Africa has a well developed rail
and road system. Safmarine has its own
trucking company and it uses the national
rail system to move containers inland to
reach population centers like Johannesburg.
Madsen said there are container trains
‘Between us and our big brother (Maersk), we probably have 40-45 percent
of the West African market,’ Safmarine’s John Boudreau said.
same operations and facilities, and in many
cases we’re loading on the same vessel
at the same port terminals. The Maersk
model of operational excellence is one that
we benefit from, having as few exceptions
as possible.”
Safmarine offers direct, fully containerized
weekly sailings from the U.S. East and
Gulf coasts to South Africa. Cargo to West
Africa is often relayed via Mediterranean
ports or Las Palmas in the Canary Islands.
It serves East Africa, generally by transshipping
through Durban in South Africa
or Salalah in Oman.
Boudreau said the company tries to distinguish
itself from competitors by offering
intensive customer service.
“We will expend a lot of energy with our
own people to protect our customers from
any internal snafus or any problems we
might have with a system. And if there are
exceptions we deal with them as personally
as we can to solve their problems.
“Our business is a little bit less predictable
coming from a broader number of customers
generally smaller in size,” he added.
The company can face challenging
conditions in some ports, though he said
the economic slowdown has given some a
breather to catch up on growing volume.
Maersk has grown its fleet substantially
in recent years, taking seven new vessels
in 2008 and two earlier this year. No more
are planned in 2009, but the company will
add to its fleet in 2010 and 2011.
Safmarine has done better than many
carriers during the downturn in container
business this year, maintaining container
volumes at the same level in the first half
of 2009 as in the same 2008 period. But it
is not unscathed; in late July it said it would
withdraw from the transpacific at the end
of June 2010, telling customers profitable
participation in the trade lane was difficult
because of its small size and poor conditions
in the market.
“There is a huge tie-in between Safmarine
and South Africa. The company began
as a venture starting service between New
York and South Africa. The roots run very
deep we have in many cases South African
officers,” Boudreau said.
The company has built a maritime academy
in South Africa to train workers, and it
has an active program called Containers in
the Community, where it donates containers
to build schools and other community
facilities.
AMERICAN SHIPPER: OCTOBER 2009 13