THE ROLE OF CARGO IN COASTAL TRADES
4.4 CONCLUSION
Out of the eight regional sinks, Mauritius, Angola, Tanzania and Kenya are the only four that show overall cargo volume consistency. Others depict erratic trends. For instance, Namibia shows highest volumes of processed foods imports while showing negligible volumes in respect of other commodities. Namibia’s containerised cargo demand from South Africa is primarily in respect of a single commodity. As such, this is not a diverse coastal trade. Therefore, in the event of a decline in the demand for processed foods from South Africa, for whatever reason, coastal trade between South Africa and Namibia could face a crisis.43
Other relevant export volumes of processed foods land in Angola, Mauritius and Madagascar. Chemicals are exported fairly proportionally between Mauritius, Kenya and Angola. However, Tanzania shows the highest volumes of chemical exports. Paper exports to Kenya and Mauritius also make appreciable volumes. The category for ‘other manufacturing commodities’ is dominated by Angola, while other sampled countries share proportionally in this category.
substitute five private vessels flagged elsewhere with five domestically-registered vessels owned by nationals unless it could be shown that other more worthwhile benefits exist. So far, the gains can be seen as too insignificant to warrant full scale and probably costly overhaul of the current coastal carriage arrangement. Other sources of cargo would first have to be found to justify changes in favour of cabotage.
Furthermore, oil majors hold a greater portion of petrochemicals. Therefore, cabotage would ideally have to incorporate strategies to encourage refining industries. Incentive schemes (instead of surreptitious coercion and state pressure) may therefore be useful methods adopted to drive policy changes. The domestically-registered coastal carrier would have to be convinced of the financial benefits of trading on the coast. Similarly, incentives in the form of tax breaks and wharfage waivers, among others, might encourage local registration of appropriate tonnages, which in return would reciprocate by meeting certain imperatives relating to vessel manning, ownership or building of the vessels.
With regard to breakbulk cargo, statistical review shows that South African ports handle relatively small volumes of breakbulk cargo. As a stand-alone cargo class, breakbulk cargo does not have any meaningful role to play in cabotage. It would remain relevant only as supplementary cargo, while a wider breakbulk cargo base is being developed. In any event, the type of vessels that typically ply the coast are suitably designed as multi-purpose carriers, albeit designed primarily for container carriage.
They have sufficient capacity to handle current levels of breakbulk cargo volumes. The likely scenario is that the breakbulk cargo base will remain the same and that this class of cargo would not constitute an important cargo component for cabotage. Therefore, as is the case with bulk cargo, current volumes of breakbulk cargo do not justify cabotage implementation, albeit for different reasons: bulk for not possessing the desired effect of stimulating the merchant flag fleet, and breakbulk for having low demand.
The chapter then turned to the discussion of containerised coastal cargo. This category is divided into landed and shipped containerised cargo. The observation was that Cape Town receives most TEUs moving along the coast, while Durban handles the highest volumes of shipped cargo. Volumes in the other South African ports show paltry TEU activity. This means that the bulk of containerised coastal activity takes place in Durban
and Cape Town. That being the case, cabotage cannot be sustained on volumes produced solely by two (out of eight) of the country’s commercial ports. Furthermore, the relatively high volumes of containerised coastal cargo recorded in both Cape Town and Durban consists of empty TEUs. Empty TEUs generally attract half the amount of the standard freight rate. The assessment indicated that South African coastal trade does not generate sufficient volumes of full containerised cargo required to support cabotage implementation. On this basis, domestic cabotage would therefore not be feasible as a vehicle for an expanded domestically-flagged fleet.
The enquiry then proceeded to whether cargo was available for the implementation of regional cabotage. SADC ports in the range between Mombasa to the east and Luanda to the west were assessed. It was observed that regional routes suffer considerable imbalances. In the case of SADC regional coastal trade, cabotage could be implemented only on the basis of South African exports to regional countries. Strategies would have to be developed to minimise the effects of the ballast return leg. Currently, regional cabotage would typically operate on the basis of a well-freighted South Africa outbound leg, while the inbound leg would be utilised to reposition the vessel (through freight from empty TEUs) for another round of exports.
The chapter further identified four types of commodities exported to regional countries in substantial volumes. These are processed foods, chemicals, paper products and other manufactured goods. The sample used Durban as the South African port of export.
These commodities are generally exported to Mauritius, Tanzania, Kenya, Madagascar, Reunion, Mozambique in the east, and Angola and Namibia in the west. There are, of course, other commodities that are exported to these and other regional countries in lesser volumes that could be utilised as supplementary cargo to the mentioned primary cargo.
For a period of four years from 2010 to 2013, about 14 000 to 15 000 TEUs were shipped from South Africa to Mauritius and Angola while about 11 600 TEUs went to Tanzania per year. About 16 500 TEUs were exported to Kenya. These volumes show that a moderate cargo platform exists to operate a coastal vessel to carry about 1 100 to about 1 700 TEUs. Therefore, purely on the basis of cargo availability, it is feasible to implement regional cabotage either on a shorter coastal route between ports in Mozambique, South Africa and Namibia or on a longer coastal route on a range of ports
between Mombasa (via Reunion and Mauritius) and Luanda. It was suggested that the creation of a transshipment port, for instance in Durban, may be necessary to improve efficiencies for the longer route between Mombasa and Luanda.
However, regional cabotage necessitates an elaborate plan that would bind other SADC countries to cabotage ideals, as expounded in chapter 3. South Africa would not be in a position to implement regional cabotage by mere promulgation in its own parliament without the active participation of the other affected SADC member states. A system that would bind other sovereignties will have to be developed before regional cabotage can become a reality, even if cargo on which the policy can be implemented existed.
Nothing has been done or proposed to coordinate SADC coastal states for cabotage.
Challenges regarding potential misalignment of the CMPT with SADC and ultimately AU instruments were discussed in previous chapters. In the circumstances regional cabotage remains a mere idea.
Therefore there is little or no cargo on which to form the basis for the implementation of cabotage, either domestically or regionally. Domestically, the cargo base is too small to justify operational change, particularly as changes will not lead to the growth and expansion of the domestic fleet. On the regional front, some cargo has been identified.
However, cabotage implementation would first require regional integration to make the policy binding on all the SADC coastal countries. The CMTP, so far, pays lip service to less regional cabotage and the matter seems not to have been prioritised.
Having looked at the issue of cargo in South Africa and in SADC and assuming cabotage implementation can progress past this issue, the next chapter provides an overview of restrictive coastal policies which different jurisdictions apply. The idea is to glean experience from worldwide cabotage practices on which a strategy for cabotage implementation may be based.