From Breakbulk Asia: Africa Projects Pick Up

SINGAPORE -- Africa, the least-developed continent in the world, is attracting increased attention from the world's biggest manufacturing countries looking for natural resources and an outlet for exports.

Leading the way is -- who else? -- China, which is sponsoring or has involvement with some 77 percent of all African projects, Hua Wallace Cai, a project manager with TransProjects Asia, told attendees of The Journal of Commerce's Second Annual Breakbulk Asia Conference in Singapore this week.

China is focusing on Africa because of its need to extract natural resources, but this is not a new phenomenon, said Wallace, who was participating as part of a panel discussing Sino-Africa trade. Chinese engineering, procurement and construction companies have been working in Africa since the 1950s. Beyond the hunt for resources, Africa is an important market for Chinese exports and a source of employment.

European and U.S. companies such as Bechtel also have significant operations in Africa and often source material and equipment from China, said Zhou Hui, transport and logistics manager for Bechtel China.

Breakbulk services between China and Africa, however, are spotty, at best. "According to the feedback we get, sometimes ship conditions are not good. Ships are old or dirty or delayed," Zhou said.

U.S. and European EPC contractors have strict requirements for shipping quality. Damage during shipment costs money and time, even to the point of having to refabricate pieces. "We always put the cargo safety issue first," Zhou said.

Virginia Moore, managing partner with Shanghai-based OSL Steamship, said the cargo market encompassing container, ro-ro and submersible transport between China and Africa is well-developed. But "there are different levels of service in the breakbulk field. There is a great pressure on rates; a lot of vessels offer good rates, but they may not be clean or they may be old.

"There is an extreme variety of services, and it can be difficult for shippers (newly) entering the market to differentiate between the services," she said. "They must know who the carrier is, (and know) if they are really calling the ports you are asking them to call upon."

OSL's main trade lane is China and West Africa. "We have shipping offices in those ports to assist customers and ensure that vessels will enter berths quickly and not have problems at the port," Moore said. "Our offices in Africa are critical to our operations. Everyone on our team has to spend time in Africa to understand that role.