A critical analysis of the international terms of shipment in dry-bulk exports from the Port of Richards Bay.

Abstract

Approximately 98 % of South African exports are conveyed by sea. The volume of South

Africa's sea trade represents approximately 3,5 percent of world seaborne trade in

tonnage terms, a performance that placed the country on the map of international

maritime nations.

The major portion of South Africa's dry-bulk exports is shipped from the port of

Richards Bay. Richards Bay is the seventh largest world port in terms of cargo volumes,

and handles in excess of 80 million tons per annum. This represents approximately 57 %

of all South African seaborne trade by volume. The greater portion of South African

seaborne trade, especially on the export side consists of shipments of primary (raw)

products or beneficiated primary products, and accounts for approximately 140 million

tons of all cargoes. The export of primary products or commodities is a vital part of the

South African economy and generates a substantial amount of the country's foreign

exchange.

This dissertation concludes that shipment on FOB terms continues to command the lion's

share of all export consignments handled in the port. In fact from the more than 78

million tons of cargo covered in the survey, more than 64 million is shipped on FOB

terms, which constitute in cargo volumes approximately 82% of all exported

commodities from the Port of Richards Bay. The high incidence of shipments on FOB

terms leaves the final arrangement of shipping in the hands of foreign buyers. This

represents a substantial loss of revenue in invisible earnings for the country's service

account of the balance of payments.