South Africa has become the latest country to announce plans to establish a national shipping line in response to vulnerabilities highlighted by supply chain disruptions during the pandemic. The Ministry of Transport has published the first bill for the formation of the South African Shipping Company (SASCO) which could be launched as early as 2023.
The proposal builds on a government initiative put forward five years ago to overhaul South Africa’s maritime industry. The comprehensive shipping policy adopted in 2017 set targets for the growth of the shipping sector. He called for taking steps to establish a national shipping carrier as a strategic pillar for reviving the shipping industry. The CMTP would promote the development of the national shipping company by giving it priority in South African ports.
The Department of Transport points out that South Africa generates a large amount of export cargo but has not had a national carrier since Maersk acquired Safmarine in 1999. Recently, Africa has been at the center new competition between major shipping companies, including Maersk, Hapag-Lloyd and MSC, each of which has made investments in the shipping and logistics sectors. The South African government stresses that due to reliance on foreign shipping companies, the country may not be able to protect South Africa from supply chain disruptions, particularly in period of natural disaster or international conflict. They pointed out that South Africa is the only one of the BRICS (Brazil, Russia, India, China and South Africa) economic alliance countries that does not have its own ships.
The bill outlines an aggressive plan for SASCO to have the line participate in shipping exports and imports as the preferred national shipping carrier. It would be overseen by a government minister who would appoint the board of directors and chief executive with the aim of building a business that would be competitive in global trade. In addition to a fleet of vessels, the company would also own and operate cargo clearance, stevedoring, warehousing and other logistics infrastructure and services.
The plan calls for the company to engage in a wide range of services, including container and bulk cargo, tankers and coastal shipping. It would also maintain a bunkering operation. The bill calls for South Africa to acquire a container ship, both a tanker and a chemical tanker, a general-purpose bulk carrier suitable for coal and grain, and a smaller coastal transport vessel. It would also acquire one or more bunker barges.
Under the proposal to launch the national shipping company, the legislation would allow the government to acquire existing ships or shipping companies when the South African Shipping Company is formed. Funds for the acquisitions are said to come from the government as well as the Industrial Development Corporation (IDC) of South Africa, but no timetable is set for the creation of the company.
The Department of Transport reports that it will begin meeting with stakeholders this month to explore their interest and commitment to the shipping company.
Australia’s new government also recently announced its intention to move forward with its election promise to launch a state shipping company. They formed a task force who draws up the plan. Unlike South Africa, Australia still has a dozen ships operating under its flag, but the government has pointed to supply chain disruptions calling for the launch of a national shipping line. The task force is to complete its work by mid-2023.