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Hub & Spoke Shipping in the African/Indian Ocean Region


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Presented by: Andrew Thomas at the 2009 Railways and Harbours Conference in Cape Town.

Published in: Business
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Hub & Spoke Shipping in the African/Indian Ocean Region

  1. 1. Hub and Spoke Shipping in Southern Africa
  2. 2. Ocean Africa Container Lines <ul><li>South African domiciled container shipping line </li></ul><ul><li>Operating 7 modern container ships in the port range between South Africa, Namibia, Angola and Mozambique </li></ul><ul><li>Catering to feeder cargo, intra Africa cargo, South African domestic cargo. </li></ul><ul><li>Mozambican domestic cargo catered for by subsidiary company Mozline. </li></ul>
  3. 4. Drivers for hub and spoke shipping <ul><li>Reduce costs on mother vessel strings </li></ul><ul><li>Increase move counts in productive ports and reduce counts in unproductive ones </li></ul><ul><li>Improve transit times to major markets and increase frequency in out ports </li></ul><ul><li>Physical limitations in ports </li></ul><ul><li>Seasonal markets </li></ul><ul><li>Increase buying power in hub ports </li></ul><ul><li>Increased potential to cater to local/regional cargoes </li></ul><ul><li>Greater flexibility to manage capacity versus seasonal demands </li></ul><ul><li>Cost effective coverage of smaller markets using common feeder services </li></ul>
  4. 5. Current local drivers <ul><li>There has until now been a lack of capacity in the port network which has discouraged more transshipments </li></ul><ul><li>Direct Import / export volumes have declined significantly creating capacity for more transshipment </li></ul><ul><li>Additional capacity has been created through infrastructure spending in existing ports </li></ul><ul><li>Additional capacity is being added by Coega </li></ul><ul><li>Ports outside of SA have not developed significant additional capacity </li></ul><ul><li>Regional markets may continue to grow – Angola, Nigeria, Ghana, Mozambique </li></ul><ul><li>The cost of vessels and fuel has dropped sharply making direct services competitive even over longer distances </li></ul>
  5. 6. What transshipment takes place today? <ul><li>In 2008 : </li></ul><ul><ul><li>Durban : 600,000 teu </li></ul></ul><ul><ul><li>Cape Town : 112,000 teu </li></ul></ul><ul><ul><li>PE : 45,000 teu </li></ul></ul><ul><ul><li>Walvis Bay : 70,000 teu </li></ul></ul><ul><li>This equate to less than 25% of the total throughput of these ports </li></ul>
  6. 7. What’s required to grow hub and spoke in this region? <ul><li>The carriers will decide and they will be driven by costs and efficiency: </li></ul><ul><ul><li>Hub port capacity </li></ul></ul><ul><ul><li>Fixed day berthing of mother vessels </li></ul></ul><ul><ul><li>Landside connectivity to local inland markets </li></ul></ul><ul><ul><li>Competitive through costs </li></ul></ul><ul><ul><ul><li>Transshipment costs </li></ul></ul></ul><ul><ul><ul><li>Storage charges </li></ul></ul></ul><ul><ul><ul><li>Feeder costs </li></ul></ul></ul>
  7. 8. VISION Ocean Africa aims to be the first choice regional and feeder carrier in Africa