Sustainability of Cape fruit farmers at stake due to ‘enormous’ port problems

The sustainability of fruit farmers in the Western Cape is at stake if exports fail due to ongoing problems at the Cape Town port. It also damages the country’s reputation and image and farmers’ relationship with importers who might turn to competitors in other countries where shipping is not a challenge.

“Between 10% and 20% of producers’ value can be destroyed if fruit is not loaded and shipped efficiently. Producers also face a significant risk that valuable varieties become unprofitable due to the uncertainty in the port,” Roelf Pienaar, managing director at Tru-Cape Fruit Marketing, says.

Calla du Toit, procurement manager at Tru-Cape Fruit Marketing who is also a pome fruit producer, says it is impossible to calculate the scope and cost of the problems at the port in Cape Town. “We can only say it is enormous.”

The crisis at the port is due to a lack of investment in new equipment to replace old equipment or to add new equipment to accommodate future growth and no structured maintenance to ensure the reliability of equipment, Chris Knoetze, managing director of Link Supply Chain Management, says.

“There is also a lack of organisational skills and capability to recover after a period of strong wind, which is a unique challenge at the port of Cape Town.”

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Cape Town port is the worst yet this year

According to Pienaar, the past two years were particularly bad in the port of Cape Town.

“We are now in the third year of these challenges and, to be honest, my perception is that it is the worst yet. Matters are also made worse by the strong south-easterly winds we experienced this season.

“The problem is that volumes grow every year as new plantings come into production. We must find a solution for exports to sustainably market our fruit.”

Fruit is exported all over the world from the port of Cape Town and according to AgriHUB, the port of Cape Town exported about 82 000 reefer containers of fruit last season, which was about 165 million cartons.

Du Toit says there is good demand for Tru-Cape’s apples and pears, but logistical challenges can quickly change that.

“We must get our fruit in the market as soon as possible, while the prospects are good. Unfortunately, our consignments are arriving late, resulting in missed opportunities.”

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Expensive alternatives to Cape Town port

The crisis at the port in Cape Town has forced fruit farmers to find alternatives, but these are less efficient and not cost-effective. One possibility is to transport containers by road to other ports. The grape industry relies on Walvis Bay in Namibia, while citrus exporters are looking at Maputo in Mozambique.

“At Tru-Cape, we can truck fruit to the ports of Gqeberha or Durban at a cost of about R30 000 to R40 000 to transport a container to Gqeberha. These unnecessary transport costs pose a significant challenge to producers’ profitability,” Pienaar says.

Conrad Fick, marketing director at Tru-Cape Fruit Marketing, says this comes down to €1,40 to €1,50 extra per carton.

“It is a massive blow to producers. The market is there and the fruit looks good, but we need to find a way to reach our markets.”

The availability of trucks to transport fruit to alternative ports is also a challenge. It costs about R30 000 to truck a container to Gqeberha, R60 000 to Durban and R90 000 to Walvis Bay. Another option is to load fruit in bulk on conventional vessels or, if possible, in containers on conventional vessels.

“As we did in the past two years, Tru-Cape will load in bulk on conventional vessels, but this is an expensive option. There are also payload implications, because you can stack fewer cartons on a pallet when using conventional vessels compared to a container. This method was used widely in the past, but unfortunately, the discipline fell away as you can load fewer cartons on a pallet,” Pienaar says.

 “Our strategy remains to load containers on conventional vessels every two weeks and we will rely on loading in bulk for the balance. Loading containers is also less affected by strong winds in the port, but it comes at an increased cost.”

Ports in Europe, the United Kingdom and Russia are geared for conventional vessels, but the same is not true for the Middle East and Far East, which are two considerable markets for Tru-Cape.

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Impact of port delays on fruit farmers

Du Toit says the delays in the port have a substantial impact on producers’ income and cash flow.

“We can only invoice clients once the container leaves the port and two weeks make a big difference to cash flow. Producers also experience high input costs to grow the crop and especially this season due to rising inflation and the energy crisis.

“Therefore, it is critical that fruit leaves on time and reaches the market on time. There is a lot of claims against shipments that arrive late, resulting in poor fruit quality. A lot of fruit, especially grapes and stone fruit with a shorter shelf life, goes to waste.”

Pienaar agrees that quality risk is a major challenge.

“We work with perishable products and if you add two to three weeks to the travel time, there is a significant impact on quality and price.”

He estimates delays of an average of two weeks at the port. The Port Regulator of South Africa recently published its port performance benchmarking study, where it compared the 2016 season to 2022’s season.

During this time, the anchor waiting time increased by 500%, while crane moves deceased by 50%, while it also took vessels 150% longer to leave the berth in 2022 than in 2016.

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Timing is a challenge for fruit farmers

Knoetze says it is critical that the crop moves efficiently through the port to ensure maximum grower returns.

“Timing is also a challenge. Due to the nature of our business, there is not a consistent flow of fruit and volumes peak at certain times.

“Without efficient port operations, our products do not move quickly enough through the supply chain. This can result in product build-up at packhouses and cold storage facilities. It increased the risk of product losses and the delays also have a negative impact on fruit quality.” 

Pienaar says Tru-Cape lost about 2 million cartons due to hail damage in the Ceres region last year.

“We believe those volumes will return this year, setting the stage for more normal export volumes from Tru-Cape. However, a larger crop means bigger concerns about the performance of the port, which was recently ranked 344 out of 348 ports by the World Bank’s Container Port Performance Index.”

Despite all the challenges, Knoetze says he remains hopeful that things will change for the better with the arrival of seven additional rubber-tyred gantry cranes in December and recent management changes at Transnet Port Terminals in Cape Town.