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SMC Takes Loss of $10,000 Per Day Due to Shortage of Ocean Freight

SMC Takes Loss of $10,000 Per Day Due to Shortage of Ocean Freight

High port taxes, the use of foreign labour and the lack of protection of the business by the government make the cabotage service unsustainable, which means that the Mozambican Cabotage Company (SMC) is accumulating losses of about US$10,000 per day, due to the temporary stoppage of vessels for lack of cargo to transport.

The situation became more acute with the indefinite suspension of activities by French multinational Total and other companies that were active in the oil and gas sector, due to terrorist attacks on the town of Palma in Cabo Delgado district. SMC managers said that if the institution was practising affordable prices, it would not need to be so dependent on loading equipment for the natural gas processing industrial complex in Afungi bay, also in northern Cabo Delgado.

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The managers also said that the government had awarded concessions for the ports, but had not put measures in place to protect cabotage, and thus the tariffs ended up stifling customers who gave up cabotage transport operations.

Handling a 40-foot container in Maputo city costs the client about US$273. For this same container to be unloaded, for example, at the port of Quelimane, in Zambezia, the final cost is US$315, not counting other services.

In the opinion of SMC managers, cabotage should benefit from subsidised tariffs of at least 50 per cent off the normal handling fee so that prices become affordable for customers, because only then can we have sustainable cabotage in the country.

They also state that the Government should also create fiscal policies in order to make cabotage more dynamic, because if this scenario prevails, SMC will go bankrupt, since so far it is only adding up losses.

Recalling the extinct Mozambican shipping company (Navique), which was successful in the past, and with which SMC cannot compare. According to Domingo newspaper, the Navique company had 31 ships that navigated the country during the civil war because the cargo could not be transported by trucks due to the road conditions.

After the war, Navique was no longer desirable because it was already possible to use the road. When this company lost the market, all its assets were sold, including ships, leaving only two ships to ensure navigability (which also did not last long).

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With the changed times, according to the SMC managers, the Government should play a preponderant role for the dynamization of the maritime transport.

Another situation that leaves cabotage unsustainable, according to SMC managers, is related to foreign labour, which is generally hired to handle ships for a period of six months. The fact that the pilots are not Mozambican and do not master the access to the channel to the port, the vessels take a long time on the buoy waiting for assistance by bar pilots. For this, a pilot has to be sent in a speedboat, which must be paid by the hour, to drag the boat to port. Once you get to the quay you will need a tugboat, which costs about $430 an hour. These expenses, according to sources, would not be necessary if the crew were local.

To deal with the situation, SMC signed a memorandum of understanding with the School of Nautical Sciences so that final-year students will benefit from a professional internship, and then be certified so that they can work on board the ships.

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