'Shipping has huge potential'

Johannesburg - South Africa's shipping industry has the potential of adding R35bn/year to the economy. That is to say if the Department of Transport's new maritime charter announced on Friday succeeds in its aims.

While the South African import-export market currently runs to 350m tons of freight, only 5m tons is handled by local companies.

Advocate Nosipo Sobekwa, chief director at the department, says the domestic shipping trade urgently needs to be revived.

"The maritime charter will set the wheels in motion, and is the catalyst needed for the country's shipping industry."

Sobekwa says the maritime charter has three objectives.

The first is to put 25% of South Africa's annual freight in the hands of South African companies. This represents some 87.5m tons a year and could add R35bn to the economy at a handling cost of about $50/t.

The second objective is to increase the number of shipping runs by South African companies to 1 750.

The third is to register 300 ships under the South African flag. No vessel is currently registered for long-distance transport on the South African commercial shipping register, says Sobekwa.

Safmarine, a former South African state-controlled line with 18 vessels was unbundled in 1993 and the ships sold to foreign companies. (Safmarine is currently a separately managed division of the Danish AP Moller-Maersk Group.)

Sobekwa declares the biggest challenges to be money and skills. "The anticipated 300 ships could lead to 9 000 new direct jobs and an additional 5 000 indirect ones. No one wanting to work in the industry is without a job. People urgently need to be made aware of opportunities in the shipping industry."

Kugan Thaver, head of transport at the Industrial Development Corporation (IDC) says money is the biggest challenge for resuscitating the industry.

"A new ship costs from $30m to $60m. Government is speaking of 300 ships, and that sort of funding is difficult to get. The IDC will certainly not be able to provide all that funding itself. The entire South African financing sector would have to be involved."

- Sake24