Transport & Logistics mode

Le Havre/Abidjan in 40' HC: an increase in freight rates

October 16 2019

The current slump experienced by shipping companies on the main East-West routes means that stable markets offering reasonable freight rates and low volatility levels are in demand. The Europe-West Africa is one such market.

As part of our weekly analysis of different shipping lines, we have chosen this week to look at a North-South route on which freight rates are showing a significant increase: Le Havre/Abidjan. Several factors can explain this trend:

- The big three container shipping companies, Maersk Line, MSC and CMA CGM remain clear market leaders and are not yet facing strong competition from Chinese operators.

- The limited size of ships on West Africa lines is contributing to the maintenance of this balance over time.

- The initial effect of competition from Asia-Africa lines transiting via Tangiers and Algeciras, which was unfavorable to the traditional lines coming out of Europe, has now been "digested".

Apart from these factors affecting transport capacity, it should be noted that "Made in France" exports are showing considerable dynamism, producing sustained demand, particularly in certain sectors. This is true in the large-scale retail sector, represented, for example, by Carrefour and Supeco, and the pharmaceuticals sector, with groups like Continental Pharma. These are solid performers which are playing an active role in the economic development of Ivory Coast and neighbouring French-speaking countries.

Also, the takeover of CFAO by Japanese conglomerate Toyota Tsusho, which was completed in 2017, has opened the way to investment which contributes directly to short-term local GDP development, with growth rates to make European countries green with envy. Growth in Ivory Coast in the last two years has exceeded seven per cent.

Relative political stability and a 34% reduction between 2010 and 2018 in the number of people affected by HIV are two other very significant factors in the new long-term dynamism seen in Ivory Coast.

In 20 years, life expectancy has increased by nearly 10 years. Beyond the human aspect, this factor clearly has a positive impact on the long-term outlook for consumption.


Evolution of ocean freight rates between Le Havre and Abidjan over the last 24 months

ligne-maritime-lehavre-abidjan

Source : Upply

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Expert in Ocean shipping for 25 years, Jerome puts all his knowledge of the industry to contribution for Upply. Ship captain at heart, he has written the English-French Lexicon of Containerized Shipping (Paris: CELSE, 2001).