South Africa announced plan to establish a national shipping company

South Africa announced plan to establish a national shipping company 

Recently, South Africa announced plans to establish a national shipping company to address the vulnerability highlighted by supply chain disruptions during the pandemic. South Africa's Department of Transport has released the first draft legislation to establish the South African Shipping Corporation (SASCO), which could be launched as early as 2023.

The proposal builds on a government initiative launched five years ago to overhaul South Africa's shipping industry. The Comprehensive Maritime Policy (CMTP) adopted in 2017 set out the goal of developing the maritime sector. The proposal calls for measures to establish a national shipping company as a strategic pillar to revitalize the maritime industry. The CMTP policy will boost the development of national shipping lines by giving them priority in South African ports.

South Africa's transport ministry stresses that the country exports a lot of goods but has not had a national shipping company since Maersk bought Safmarine in 1999. Recently, Africa has become a new focus of competition for major shipping companies, including Maersk, Haberott and MSC, which have invested in shipping and logistics.

The South African government has stressed that because of its reliance on foreign shipping companies, it may not be able to protect South Africa from supply chain disruptions, especially during natural disasters or international conflicts. They stress that South Africa is the only member of the BRICS economic alliance (Brazil, Russia, India, China and South Africa) without its own ships.

The plan calls for the new shipping line to engage in a wide range of services, including container and bulk cargo, tanker and coastal shipping feeder services. It will also support refueling. The proposal calls for South Africa to acquire a container ship, a crude oil and chemical tanker, a multi-purpose bulk carrier suitable for coal and grain loading, a smaller coastal carrier and one or more fuel oil barges.

As part of the proposed National Shipping company, the proposal would authorize the South African government to acquire ships or existing shipping companies during the formation of the South African Shipping Company. Funding for the acquisition will come from the government and the South African Industrial Development Corporation (IDC), but the timing of the shipping company's establishment has yet to be confirmed.

Notably, Australia's new government has also recently announced plans to move ahead with its commercial commitments, establishing a national shipping company. They set up a special group to work out the plan. Unlike South Africa, Australia still has about a dozen ships operating under its banner, but Canberra has stressed that supply chain disruptions require the creation of a national shipping line. The task force is due to complete its work by mid-2023.

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