Crewing company sees huge potential for jobs in maritime industry

Mar 16, 2005
Author: P&S

The aim of creating 25,000 jobs in the South African maritime industry is realistic and will result in a major boost for the local economy.

This is the view of Robert Knutzen, director of Cape Town based Marine Crew Services (MCS), who today addressed the International Maritime Conference in Cape Town. Knutzen says the challenge will be for all South Africans who own cargo to work together to ensure that South Africa becomes a leading supplier of seafarers for international shipping lines.

“South Africa currently exports 130 million tonnes of raw materials, mostly coal and iron ore, imports 20 million tonnes of oil and imports and exports about 4 million containers each year. Yet the shipment of the vast majority of these materials is arranged and controlled by the foreign buyers or foreign sellers, and South Africans derive very little benefit from these trades,” he told the conference.

He said it was strategically unwise for a trading nation dependent on getting its goods to market to be wholly dependent on foreign ships.

“In respect of low value cargoes such as iron ore, the freight element can make a crucial difference to whether we are able to sell our products in a market when demand is slack. We are somewhat fortunate today that raw materials such as iron ore and coal are in huge demand because of the expansion in China.”

Knutzen said the shipping market has risen to unprecedented levels during the last two years. In 2001 the freight rate for iron ore from Saldanha to China was a little over US per ton. In 2005 it has been above per ton. In the same period the commodity price of iron ore has risen from per ton to around per ton. In 2001 freight comprised 16% of the delivered cost of iron ore. By 2005 freight comprised 64% of the delivered cost.

“It shows how vulnerable we are if for some reason prices drop or there are further dramatic increases in sea freight.”

He said National Ports Authority (NPA) statistics indicate that there were 14,000 vessel calls at South African ports in 2003, of which the South African Maritime Safety Authority (SAMSA) estimates that 11,500 were first calls. Each cargo vessel provides employment for about 30 people (comprising 22 at sea and 8 on standby ashore).

“This means that more than 250,000 seafarers are involved in some way in the sea trade with South Africa. All are foreigners except for approximately 700 South Africans employed on foreign flag cargo vessels.”

“We think it is realistic to have as a target the creation of 25,000 seafaring jobs, or 10% of the total number of seafarers involved in our trade. This is more conservative than the Maritime Charter that has as one of its aims that 25,1% of South African cargo should be carried on South African flagged vessels by 2014. If the Charter’s aim is achieved and the South African flag vessels employ South African crews as is envisaged, this would amount to about 86,000 jobs, with wages of 9m or R774m paid every month.”

Knutzen’s company, Marine Crew Services South Africa was established to train and develop seafaring skills and place South African seafarers with international shipping companies and ship management companies and already has a track record of success in this regard.

“We, however, have a much bigger dream. That is to convince South African owners of cargo to actively support this initiative by voting with their cargo.”

“The South African maritime industry is well positioned to make a significant contribution to job creation in the coastal areas of the country where unemployment is at its highest.”

Large corporates, he said, particularly those controlling the export of raw materials, can have a major impact on job creation by leveraging their control of cargo to create jobs and supporting job creating initiatives such as this.

“It will not cost them any more than they are spending on freight already.”

“Control of cargo means control of vessels, which in turn means control of the labour on the vessels, because it is not necessary to own a vessel in order to control it. And you have a say in who are employed on these vessels.”

He welcomed the amendment of the legislative framework within which shipping currently operates to encourage the growth of vessels on the South African Ship’s Register.

“We are delighted that the Treasury has accepted the principle of a tonnage tax and announced this as part of minister Trevor Manuel’s budget speech on 23 February. This tax should be kept simple, transparent and easy to calculate and must be competitively priced.”

He said South Africa has an excellent training capacity and MCS believes the country is uniquely positioned to once again become a sustainable source for international crewing.

“The training required to embark on a career at sea is very specialised, specific and comprehensive. At the end of it all candidates need sea time and unless ship owners and operators, and owners of cargo are providing these opportunities, the potential for job creation in the maritime industry will not be achieved,” he concluded.



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