South Africa impacting air cargo
As the traditional hub for air cargo in Africa, South Africa will continue to lead the way, despite its slowing economy and widening trade deficit.
South Africa has a key role to play in the air cargo industry of Africa with Johannesburg as its key hub attracting many of the major airlines around the world. “South Africa is, and will always remain a strategic position for the global airfreight market when it comes to connecting cargo to the rest of Africa and even from Africa to other parts of the world. Our country is still seen as a country that has maintained standards when it comes to regulations, compliance and so on,” says RonelRossouw, national sales manager for South African Airways Cargo (SAAC). However, widening trade deficit is something that has been affecting the country’s economic prospects. South Africa has been posting trade deficits primarily due to deterioration in commodities exports and high imports of fuel and high value added goods. “Whilst South Africa is not a large export producing country we still remain a country that can compete with effectively with other countries when it comes to high quality produce and that will remain despite strong competition from China, South America as well as some Eastern European countries,” says Rossouw. As per a report by Trading Economics,during the first quarter of 2014, South African economy advanced at a slower 1.6 percent over a year earlier, hurt by a fall in mining output. The platinum strike continued for six months and was the longest in the history of South Africa's mines. “The recent industrial actions have certainly impacted our growth in the mining industry, followed by the automotive industry and sadly our perishables via Air have seen a decline over the past few years already. More products are now imported as the labour costs have increased and as a country we have not grown that significantly,” says Rossouw. Year-on-year, the agriculture, forestry and fishing industry recorded the highest growth rate (5.8 percent) after shrinking in the previous three quarters as per the Trading Economics report. SAAC has seen demands shifting over the past few years with itscustomers continuously requesting better pricing and improved service levels. “We find ourselves working twice as hard for the same piece of pie we use to get. It remains a daily battle to protect yields but more and more capacity into the country due to the large import demand have certainly given us a run for our money,” adds Rossouw. For the moment, the carrier is reviving its strategy and concentrating on intra-Africa traffic. “We are not relenting but thinking ahead and focusing on our strong points – for example; adding routes into Africa and focusing on supplying capacity in areas where there is high demand.” But the city that drives it all is Johannesburg, the hub into South Africa both for international as well as domestic cargo within South Africa. Though developments by customs for clearing cargo, as well as additional International flights being introduced by carriers into Cape Town, specifically, had an impact on the volumes into Johannesburg, it still remains the hub for air cargo that complies with world standards. It recently got Green status for the EuropeanUnion regulations. “It’s a hub that can handle all types of cargo and plans are afoot to modernize this facility. We still see challenges in lack of investment in infrastructure for most African airports. We always wish as cargo operators that the airport authorities will actually invest more in the development of cargo facilities,” concludes Rossouw. SAAC experienced its tonnage handled for the month of April to July increased by 3 percent compared to the same period last year while revenue was up by 12 percent based on the same times.