In today's tariff-ridden shipping world, can relief be found in the southern hemisphere?
 Finding what good there is to be found in ill winds that blow is the task all must face themselves to survive this year and the next.
If there were a single view distilled from all sources, it is that new customers are likely to be found in emerging markets - mostly in Africa and Latin America.
With uncertainty mounting in Europe, and the tariff-ridden US market becoming unattractive, one must look to southern hemisphere for succour.
“We are in a very volatile world,” DHL Group chief executive Tobias Meyer told analysts in March - as indeed it has proven to be since.
The US Trump administration has already turned global trade upside down through the addition of new tariffs and threats to increase or implement additional duties.
Shippers were left unsure from one day to the next what tariffs were real and what were not, and if real, how long would they last.
Said Kuehne+Nagel CEO Stefan Paul: "We have started with customer advisory calls in the US, leveraging our customs team. In the first call, we had close to 2,000 registrations. So, you see there is a lot of demand coming towards us when it comes to customs consultancy services.”
And so it came to pass as forwarders found consultancy services in greater demand as shippers manoeuvred through newly volatile markets - weighing their options between air and ocean freight, new sourcing locations, calculating the impact of duties and regulatory changes.
Bellevue, Washington-based Expeditors International anticipated changes by adding employees in certain divisions. “Given the growth in air and ocean shipments, increased customs declarations and other business activity, we carefully added headcount in certain important areas,” said Expeditors chief financial officer Bradley Powell.
Other forwarders such as DHL have turned their attention to other geographic regions, and already there are those like Singapore's Pacific International Lines beefing up services to Latin America.
“Our geographical footprint is very much tilted to high-growth geographies and these geographies are currently not impacted as much from trade barriers, especially the new trade policy of the US administration,” said Mr Meyer of DHL.
“We have a higher market share in those fast-growing geographies, and that’s where we will continue to focus with our geographic tailwind programme, where we highlight several countries that have both strong GDP growth, but also strong trade growth, and we aim to solidify and grow our position, especially in those markets,” he said.
It is a sad reflection on the state of the high seas and international airways that the realm of the private sector has shrunk to an alarming degree as the regulatory world comes to occupy capitalism's old domain.
While the private sector applauds the ambitious purging of the American civil service, hoping it becomes a global phenomenon, it also recognises that tariffs are not in the interest of international shipping.
So what is to be done? What few constants that can be found are to be treasured while they last. Barring regime change in China, Beijing's trading relations with the US is unlikely to change. There may well be a permanent cessation of meaningful trade.
The aim of the Trump administration is to restore domestic manufacturing to provide jobs - well-paying jobs - to disheartened men who have been rejected for employment because of their race or their indifferent attitudes to "diversity, equity, inclusion" and "environmental, social, governance" policies. Such rejections were once confined to whites, but Asians have since been designated de facto whites as they no longer appear on the official pity list.
Looking for another silver lining in the geo-political clouds, one notes that while the Houthi insurgent rockets drive shipping away from the Suez Canal, forcing it to detour around the Cape of Good Hope and up the west coast of Africa.
Rail connectivity is much improved in Kenya. Nairobi has signed a contract for Phase 2B, extending the Chinese financed Standard Gauge Railway from Naivasha to Malaba, near the Ugandan border. This eases the flow of coffee, tea and spices to the Port of Mombasa.
For the socialist-minded, the Port of Dar es Salaam, capital of Tanzania, has something called the Tanzania Private Sector Foundation (TPSF) advocating for business-friendly policies. And the World Bank has approved US$750 million to support private-sector-led recovery and urban development.
Even in hard luck Durban port, they enjoyed a 9.8 per cent increase in container volume in 2024 to 200,000 TEU. Not much, but where there is growth, there's hope.
On the west coast at Walvis Bay, Namibia's
Namport is pursuing PPP agreements for port expansion, particularly in response to oil and gas discoveries.
There's been a crane purchase in Pointe Noire, Congo, from Abu Dhabi's AD Ports Group, which has awarded contracts worth $114 million for six ship-to-shore cranes and 17 hybrid rubber-tyred gantry (RTG) cranes to be deployed at Pointe Noire, and at Luanda, Angola.
Nigeria's Lagos Free Zone secured $50 million in investment to develop Nigeria’s first deep-seaport-based special economic zone from the World Bank's Washington-based poverty-fighting International Finance Corporation (IFC).
In Latin America the story is the same, but different. China’s Belt and Road Initiative has significantly expanded maritime trade routes, with investments in ports, logistics, and shipping infrastructure across Latin America.
Over 200 Belt and Road cooperation agreements have been signed with 150 countries, supporting port expansions and trade connectivity.
The 21st Century Maritime Silk Road, a key component of the BRI, focuses on enhancing sea routes between China, Africa, and Latin America, facilitating faster and more cost-effective trade.
The Brazil-China Belt and Road deal focuses on agriculture, industrial competitiveness, and infrastructure, aligning Chinese investments with Brazil’s domestic priorities.
Argentina’s the agreement involved securing $23 billion in Chinese investment for transportation, energy, and infrastructure projects. This includes hydroelectric dams, railway expansions and renewable energy initiatives.
Chile has signed multiple agreements, focusing on port modernisation, digital connectivity and clean energy.
Ecuador partnered with China on major infrastructure projects, including highways, bridges and energy facilities.
Given the trends in world shipping, it seems the focus to the months to come is on the southern hemisphere when money is being spent and money can be made at a time when the only reliable markets of yesteryear are engulfed in volatile trade wars. |
