[151010.EN.SEA] Trades to Watch: South and West Africa (part 2)

(Yesterday) we began to look at the South and West African trades and learned who the major players are in terms of port activity and which shipping lines now dominate these trade lanes.

Today in The Container Shipping Manager we will delve a little deeper and find out just how profitable it can be to run services from Asia to South and West Africa.

In order to do this we will look at the running costs and revenues available on one existing Asia-South Africa-West Africa service operating in the trade today.

As we have done in our previous trade reviews, the cost aspect of the equation will include the bunker cost and the time charter cost of running a vessel on the trade. Revenue will be based on the trade’s current spot freight rate.

But before we launch into the analysis, let’s see how freight rates on the Asia-South Africa and Asia-West Africa trade compare versus the overall Shanghai spot rate as quoted in the Shanghai Containerised Freight Index (SCFI) below.

On the right side we can see the SCFI index and on the left is the ocean freight rate for Asia (Shanghai) – South Africa (Durban) and Asia (Shanghai) – West Africa (Lagos).

The objective here is not only to see whether the overall trend in freight rates, but also to see if there has been a downturn in the Africa trades in comparison to the SCFI index rate. Readers must keep in mind that the SCFI is an index rate and not an actual rate.

Source : CSM, 08.10.10.