South Africa Container Exports Experience 20 Percent Growth

June 22, 2017 Containerization

According to reports from the World Trade Organisation (WTO), export orders and container shipping have been on the rise since the beginning of 2017. Albeit the international organisation has expressed uncertainty toward global economic and policy developments, the WTO is still forecasting an overall expansion in world trade.

An example of the economic uncertainty voiced by the WTO can be seen in South Africa, where many sectors saw a turbulent start to 2017. Surprising to some, container shipping was not one of the industries that was plagued by volatility at the beginning of the year (2017). In fact, according to the managing director of Maersk Line Southern Africa, South African container exports experienced year-on-year growth of 20 percent.

One of the sectors which made important contributions to the industry’s growth was refrigerated containers, or more commonly known as “reefers.” South Africa’s refrigerated exports recorded growth of approximately seven percent compared to the first quarter a year earlier in 2016. Looking specifically at imports, which represent 56 percent of total container flows, the market has grown by two percent year on year.

The maritime transportation industry on which South Africa’s foreign trade is largely dependent upon, does not constitute a “sector” of the national economy; at least not one that contributes to any measurable extent to the country’s Gross Domestic Product. Stated more straightforwardly, South Africa no longer has a domestic maritime transport sector per se. Cargo handling and marine services in the ports, as well as cargo and other maritime related services provided locally, comprise what is now generally regarded as the South African maritime transport sector. The only exception could be Grindrod Ltd. This is a South African company, which through offshore subsidiaries, owns, charters and operates a large fleet of shipping vessels trading internationally.

Despite Q1 2017’s promising overall trade results, analyst and economists warn about being too optimistic about the recent developments in South Africa. This is given the fact that the South African container market has experienced significant up and down market movement in recent years. Until the day that local consumer spending sees a significant upward swing, South Africa’s market growth is likely to be in the single digits for the remainder of 2017.

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