S. AFRICA'S SKEWED TRADE LEAVES LINES FEELING EMPTY

S. AFRICA'S SKEWED TRADE LEAVES LINES FEELING EMPTY

South Africa's voracious demand for imports but lackluster export sales are creating a logistical headache for Safmarine, the country's largest shipping company.

For every 100 fully loaded general-purpose containers shipped in from North America, Europe or Asia, up to 40 may be returned empty because of a lack of cargo.Refrigerated containers are the exception, however. South African exports of fruit and other perishable produce greatly exceed imports, forcing Safmarine to carry large numbers of empty reefer boxes southbound.

The skewed trade pattern is further compounded by an imbalance in demand for 20-foot and 40-foot containers in each direction.

But while the lack of manufactured exports is a serious nuisance for Safmarine, it is a much more serious problem for the country as a whole, which has seen its import bill soar by 40 percent over the past couple of years.

The trade imbalance "is not sustainable in the long term," Howard Boyd, chief executive of Safmarine's liner division, said in London this week.

With the domestic economy booming, South African manufacturers have turned their back on overseas markets in order to satisfy demand at home. But Mr. Boyd said action must be taken soon to stimulate export activity in order to improve the country's international balance of payments.

Safmarine's liner division carries around 200,000 20-foot equivalent units (TEUs) annually. But Mr. Boyd estimates that in the South Africa-to-Europe trades alone, empty containers account for around 50,000 TEUs within the South Africa Europe Container Service consortium operated jointly by Safmarine, P&O Containers, Nedlloyd Lines and four other minor players - Compagnie Generale Maritime, CMB Transport, Deutsche Africa-Linien and Ellerman Harrison Container Line.

The movement of empty containers around the world is a huge cost for all shipping lines. But despite the particularly large number of empty boxes carried by Safmarine, Mr. Boyd described the company's financial performance as satisfactory.

Safmarine, whose activities include bulk as well as liner shipping, last month reported a 48.7 percent increase in operating profit for the year to end of June, a reflection of South Africa's strengthening economy as well as the recent recovery in the reefer and bulk trades.

Congested and inefficient ports, which have proved incapable of coping with rising cargo volumes, are another problem faced by all shipping lines serving South Africa.

And while the trend in most parts of the world is toward port consolidation, container lines currently have to call at three main ports in South Africa and may soon be forced to stop at a fourth, Mr. Boyd said. With Durban already overstretched and environmentalists opposed to expansion, a container terminal able to handle up to 1 million TEUs annually may be built at Richards Bay, the country's premier bulk port.