Dynamar B.V. of Alkmaar, The Netherlands, has recently issued another report in its Container Markets and Trades series: the fourth biennial edition of the “East & Southern Africa (worldwide) Container Trades”. Salient details and some of the interesting findings of the study are discussed in this review.

West Africa
West Africa is clearly moving into the direction of maturation. Compared to East Africa, the ships are bigger, there are more carriers and there is a substantial presence of international port operators. Currently, 112 box ships sail the core Asia-West Africa routes. Deployed by ten different carriers, their average capacity is 5,300 TEU, with the biggest ship measuring no less than 13,100 TEU.

East Africa
East Africa still has clearly some way to go compared to West Africa. With 2,900 TEU, the average of the 52 container vessels serving the area from Asia is little more than half the size of its West African sister. Including the largest 4,900 TEU unit, they are operated by nine different carriers.

Hub and spoke is not practiced in East Africa. Hutchison Port Holdings (Dar es Salaam) was the single foreign terminal operator in the region until, recently, DP World started operating Berbera and sister company P&O Ports announced to develop Bosaso. Mombasa, the region’s largest outlet, is operated by its port authority.

Defunct, but increasingly served
Somalia may still be considered partly defunct, ever more containerships are coming to its ports. Eight different services are concerned, operated by six carriers: CMA CGM, Emirates Shipping, MSC, PIL, Simatech and X-Press Feeders. Ports called are Berbera, Mogadishu and Kismayo. The seventeen ships used have an average capacity of 2,000 TEU, ranging between 1,100 TEU and 2,700 TEU.

More and less than East Africa
In terms of container trade, the East & Southern Africa report covers three African regions, comprising 23 countries. In addition to East Africa, these are:
Indian Ocean: Madagascar, Mauritius, La Réunion and three more, small island states;
Southern Africa: littoral Mozambique, South Africa and Namibia, plus four landlocked nations.

Port Louis and Port Réunion are the ports of the Indian Ocean islands Mauritius and La Réunion, respectively. They compete with each other for transhipment trade from wayport calls of services en route to Australasia, South America or West Africa.

Expensive to be landlocked
Sixteen of all Africa’s 56 countries, making up for a quarter of the Dark Continent are landlocked. Their lifeline is the connection with the nearest seaport in an adjacent country. Inland transport is up to two-and-a-half times more expensive than ocean carriage. It means that 228 million people in eleven East & Southern African countries pay more for their imports and get less for their exports, impacting welfare.

As befits good neighbours, authorities in the coastal countries, often with the help of China or Japan-based investors, have initiated grand plans to develop new corridors. These come in addition to the many passageways already in existence some of which may be improved, expanded or extended.

Eye-catching corridors
Two startling, because of the required investment in particular, such planned corridors are:

– LAPSSET, is short for LAmu Port-South Sudan-Ethiopia-Transport corridor. LAPSSET is to connect the UNESCO World Heritage port of Lamu with the countries stated through an 880-km highway plus a 1,710-km railway. The first of 32 berths is slated for commissioning in 2018. Total costs including 2,240-km crude oil pipeline are estimated at USD 24.5 billion, equal to 40% of Kenya’s 2015 GDP. LAPSSET may ultimately be stretched to an equatorial land bridge touching the South Atlantic at Douala/Cameroon.

– MWAPORC stands for Mwambani Port and Railway Corridor Company. It includes a deep-sea port at Tanga/Mwambani, handling bulk and up to 18,000+ TEU box ships. An 8,500-km railway is to link the Indian Ocean from Tanzania through Rwanda, Uganda and Congo D.R. all the way to Banana of the South Atlantic Ocean. And furthermore: water, gas and oil pipelines, airport- and railway cities. The costs? How about USD 30 billion?

What the above two and similar other somewhat megalomaniac corridors have in common is delays, stagnation and a lot of external sceptic.

Things will pick up. Yes, politically troubled South Africa caused a decline of the overall trade by 1% on-year in 2016. However TEU volumes for Southern Africa as a whole are forecast to grow by CAGR 3.2% over the period 2015 to 2020. For East Africa and the Indian Ocean Islands combined, the expected growth rate is nearly 10%.

The overall number of full containers to be carried by 2020 is anticipated to exceed 7 million TEU for the first time. There are not too many container trades able to post similar forecasts!

Carrier confidence
Most of today’s 20 different carriers serving the worldwide East and Southern Africa trades have done so interruptedly over many years, suggesting that they have strong reasons to do so.

5-year throughput of East and Southern African ports handling minimum 100,000 TEU

Source: Hellenic Shipping News

Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of TradeMark Africa.