Ships slow down and save, improve service

2012-02-05 13:09

Cape Town – The Safmarine shipping line is in an industry that often sees the first signs of a struggling economy in the form of less freight being transported.

In such difficult times it is not always possible to compete on price and the focus is on controlling and managing costs, said Grant Daly (40), the recently appointed chief executive of Safmarine.

Safmarine – which has strong South African ties as it was established in 1946 by, among others, the well-known South African industrialist Dr Hendrik van der Bijl – announced in October last year that it would move its head office from Antwerp in Belgium to Copenhagen in Denmark.

The Danish shipping line AP Möller took over Safmarine in 1999, but until recently Safmarine was managed as a separate company.

As a consequence of the global economic downturn a decision was taken last year to incorporate Safmarine’s corporate and administrative services into AP Möller’s Maersk shipping line to save costs.

Daly said the Safmarine trade name would continue independently because it was regarded as an important strategic priority.

Safmarine has 1 400 employees in 130 countries and there are around 60 ships in the Safmarine fleet.

According to Daly the company has made considerable investments in new ships over the past 11 years. Since 1999 18 have been bought and this year another six are being commissioned. Safmarine’s key markets are Africa, the Middle East and the Indian subcontinent. These regions trade actively with other emerging economies such as China and Brazil.

Up to 50% of Safmarine’s business is related to trade with Africa and 40% of its African activities arise in South Africa.

Daly said piracy is still a serious threat to the shipping industry and Safmarine has introduced special measures to reduce the risk. He believes, however, that it is a global issue that the international community and national governments need to tackle.

The shipping industry cannot do it alone.

The oil price has a large impact on the shipping industry, with bunker fuel being a significant expense. One way in which Safmarine saves fuel and at the same time reduces its environmental impact, says Daly, is by proceeding slowly, with ships’ engines operating at less than 60% of their maximum capacity. This can reduce fuel consumption by up to 40%.

One might think that slower navigation would affect reliability of service, but Daly says the opposite is true. Because shipping routes are planned better, slower speeds actually improve service reliability. It's generally other factors outside the control of the shipping line, such as port bottlenecks, that affect reliability.

Daly, a native of Molteno in the north-east Cape, where his parents still farm, obtained a BEcon degree from the University of Stellenbosch before joining Safmarine 17 years ago.

“It was just after the political changes, when the global economy opened up to South Africa.”

Safmarine’s big white ships in the Cape harbour were the magnet that has since taken Daly around the world.

Before his appointment as chief executive he headed Safmarine’s division for multipurpose freight shipping and served as Safmarine’s regional manager in Singapore and Dubai.