Cape fruit exports endangered by crumbling port infrastructure

A catastrophic reduction of 60% for several categories of fruit export has precipitated a move to sue Transnet for the losses caused by their neglect

Newsroom

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Newsroom

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January 19, 2024

Cape fruit exports endangered by crumbling port infrastructure

South Africa's deciduous fruit export season is grappling with unprecedented challenges as Cape Town port struggles with a confluence of issues, severely impacting the lucrative trade. Despite a promising harvest, the port's inefficiencies have led to a staggering 60% reduction in some fruit exports compared to the previous year, sounding alarm bells for producers who are now contemplating legal action against Transnet, the state-owned enterprise responsible for the country's ports.

A myriad of problems, ranging from equipment breakdowns to insufficient labor, inadequate maintenance, and declining productivity, compounded by the added hurdle of strong winds, has resulted in massive backlogs and delays. This has forced fruit producers into the peak trading season with a sluggish start, as the infrastructure woes at Cape Town port persist.

Data from the provincial government and Transnet paints a grim picture of the situation. Over the past four weeks, only 7,717 twenty-foot equivalent containers were moved through the harbor per week, a stark contrast to the target of 20,000 containers. Vessel turnaround times have ballooned, averaging 17 days in the first week of January, far beyond the target of four days. The waiting time for vessels also surged to 8.2 days, well above the one-day target.

The adverse weather conditions, particularly strong winds, have further complicated matters, costing the port 184 hours in handling time so far this month at its container terminal, according to Transnet. Truck turnaround time has exceeded expectations, reaching 60 minutes compared to the target of 40 minutes.

In response to the crisis, the fruit sector is implementing a range of measures to ensure the flow of export shipments. Shipping lines have strategically diverted some vessels from Cape Town to Port Elizabeth in the Eastern Cape to alleviate pressure on the struggling container terminal. Larger vessels bound for the Far East will no longer call at Cape Town, and smaller vessels, including ferries, are being utilized to transport products to Port Louis in Mauritius before joining vessels to the East.

The South African Table Grape Grower organization, along with Agbiz and Fruit South Africa, is actively engaging with Transnet and government stakeholders to expedite interventions. Some exporters are opting to transport their fruit via road to Port Elizabeth, bypassing Cape Town. Specialized reefers are leaving Cape Town weekly for the EU and the UK to ease pressure on the strained port.

While performance levels at the Container Terminal in Cape Town have shown improvement since crisis talks were held with Transnet, a return to normalcy will take time. As the grape season enters its peak shipments, competition for space with pears and stone fruit adds an additional layer of complexity to the recovery process. South Africa remains committed to delivering quality table grapes to all its markets, urging stakeholders across the value chain to handle arrivals responsibly as efforts continue to navigate the challenges.

‍In a recent announcement by the DA in the Western Cape, Transnet will be summoned to the Standing Committee on Finance, Economic Opportunities, and Tourism to address the challenges faced by the Port of Cape Town during the table grape and stone fruit export season.

The Port's recent performance has been subpar, leading to significant delays of up to three weeks in shipping produce. Prolonged storage times may impact fruit quality, rendering it unsuitable for foreign markets.

Hortgro, representing various fruit industry organizations, reports a 35% decrease in the total volume of shipped apricots, cherries, peaches, plums, apples, and pears through the Port of Cape Town in November and December compared to the previous year.

The following stakeholders have been invited to the committee:

- South African Table Grape Industry Association
- South African Association of Freight Forwarders
- Western Cape Department of Economic Development and Tourism
- Port of Cape Town Container Logistics Chain

The committee aims to compile a report for submission to Transnet, assisting in resolving the issues at the Port. A well-functioning Port of Cape Town is crucial for broad economic development and job creation in the province.

The DA pledges to collaborate with Transnet to address the challenges promptly, emphasizing the cascading positive effects of a world-class port for the Western Cape's economic potential.

The date of the Standing Committee meeting will be communicated in due course.

The re-routing of ships around Africa to avoid Red Sea attacks is impacting refueling patterns, boosting bunker fuel demand at ports like Mauritius, South Africa, and the Canary Islands. Attacks by Yemen’s Houthi militia in the Red Sea have prompted vessels to circumvent Africa, leading to congestion in bunkering ports, particularly in South and West Africa.

Bunker fuel demand has surged in ports like Port Louis, Gibraltar, and South Africa's Cape Town and Durban, with prices of low-sulfur bunker fuel in Cape Town rising 15% to nearly $800 per metric ton.

The congestion has also affected oil tankers and dry bulk carriers, diverting demand to West Mediterranean ports. Singapore and Rotterdam may see increased demand soon, as ships aim to hedge against route uncertainties by topping up at competitive fuel prices.

The situation will be discussed further in a Standing Committee meeting, aiming to assist Transnet in addressing the issues at the Port of Cape Town for broader economic development and job creation in the Western Cape.

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