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WORLD FOOTWEAR | JULY/AUGUST 2012
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Browne, sales director in the UK
and Ireland for Maersk Line (the
containerised freight division of industry
heavy-hitter the A.P. Moller–Maersk
Group), knows well as he only recently
returned to Europe after running the
company’s operations in Egypt for the
final four years of the last decade. He
agrees that the whole of the eastern
Mediterranean is an interesting region
but feels that the social and political
events of the Arab Spring that began in
December 2010 could set logistics and
manufacturing progress back. He
suggests that some manufacturers who
have looked to set up operations in that
part of the world may have called a halt
to the projects they were working on.
“It’s a shame,” he says. “I haven’t been
back since I left, but in my opinion,
Egypt works. Yes, workers in China
whom western companies pay $200 a
month are three times more efficient
than workers in Egypt who earn,
perhaps, $75 a month, but you can work
round that. Egypt is, or at least was,
developing its export business,
agriculture is going well and there are
decent opportunities for investment.”
TRAVELS WITH MY
LOGISTICS SERVICE
PROVIDER
At freight forwarding company
Allport, David Gartside is route
development manager. He refers to the
company, which is about to celebrate
50 years in business, as one, like other
logistics service providers, that exists
simply to move cargo from one part of
the world to another for customers,
who include major fashion groups that
import large volumes of shoes into
northern Europe from Asia. The
importance
of
supply
chain
management today means these
companies allow Allport personnel to
accompany their sourcing experts on
buying trips to the Far East. “We go
together, and this gives us good insight
into their buying trends,” he points out.
“This is valuable because there has
never been more unpredictability and
volatility. It’s the way of the world. We
are the logistics connection between
the shipping lines, who own the vessels
and the containers, and the retailers. In
July 2008, it cost $3,100 to ship a 40-
foot container from port to port, China
to Europe. In May 2009, when the
global economic downturn hit, they
were charging $600. It follows global
economic cycles. In 2008, the ships
were full; demand for space was very
high. Then, with the global economic
slump, demand for space dropped.”
This is borne out by official statistics.
The standard way of counting traffic
through container ports is in TEUs
(twenty-foot equivalent units), which is
the standard size of the single
containers we are used to seeing on
lorries and freight trains. Between 2008
and 2009, container traffic fell in nine
out of the ten busiest ports in the world
(the exception was seventh-placed
Guangzhou, where traffic increased
from just over 11 million TEUs in 2008
to almost 11.2 million in 2009). The
decline at the port of Singapore (then
the busiest in the world) was from 29.9
million TEUs to 25.9, a fall of 15.7%.
Shanghai
(now
number
one)
experienced a drop of 11.9%, from 27.9
million in 2008 to just over 25 million
in 2009. Volumes increased again in
2010. The other seven ports in the top
ten are Hong Kong, Shenzhen, Busan,
Ningbo, Qingdao, Dubai and, in tenth
position, Rotterdam.
RECORD PROFITS
Shipping lines had to reduce their
rates and lost billions, according to Mr
Gartside. Their reaction was to take
more than 500 container vessels out of
circulation during the downturn,
reducing global container freight
capacity by 12.6%. The ships lay idle
from September 2009 until September
2010, he says. With supply cut, demand
became strong again so that many of
the shipping companies made record
profits in 2010 on the back of prices
that peaked at $4,350 for a forty-foot
equivalent. Then in 2011, they cut their
prices again to increase market share
meaning rates fell to $1,100. “But today
we are fast approaching the dreaded
$4,000 mark again,” he says. “The
shipping companies were in danger of
Barges can transport containers from factories in inland China to Shanghai along the Yangtze river.
CREDIT: SHUTTERSTOCK