The dysfunctional state of Cape Town's port is trashing South Africa's hard-won reputation as a reliable supplier of high quality fruit and endangering its lucrative overseas markets, says Fhumulani Ratshitanga, CEO of Fruit South Africa, which represents the country's fresh fruit producers and exporters.
“We were in the UK and Germany in late September and in all the meetings we had with different retailers logistics came up as the major issue of concern to the markets. Every single person we spoke to raised this as their most serious concern.
“They said, 'We love your fruit but we're having to look at other sources because your logistics is a nightmare.' Those are the words they used.”
When the South Africans told them about efforts to address the crisis they were notably unimpressed, she says.
“We told them that from our side we're pushing as hard as we can, but they said that doesn't help them.
“They're saying they can't afford to not have products on their shelves because the fruit they get from their South African suppliers is not of the required quality. They need quality products on their shelves at all times.”
According to data from Fruit South Africa, delays in getting fruit to global markets have seen claims of bad-quality products double over the past seven years to 37% of fruit exports.
“So these logistical challenges are impacting negatively on the sustainability and growth of our fruit industry. If you look at the foreign revenue this industry brings to South Africa, the jobs it creates and its contribution to rural development, this is unacceptable.”
Fresh fruit, which makes up 35% of South Africa's agricultural exports, brought R63bn into the country in the 2021/2022 season. The sector employs 324,000 people directly on farms. More jobs are created upstream and downstream in the value chain, making fruit one of the biggest employers in the agricultural sector.
The bulk of this revenue and most of these jobs depend on the port of Cape Town meeting certain handling and turnaround targets. The World Bank's 2022 container port performance index ranked Cape Town 344 out of 348 ports.
“In the fruit exporting industry time is of the essence. If you lose a certain window, that's it,” says Ratshitanga.
“We desperately need improved efficiencies at the port of Cape Town. What is being communicated to us by our global buyers is that our supply chain needs to be far more robust or we are going to lose critical markets.
“They've told us they're looking at other suppliers. Other suppliers are going to fill the gap.”
Once market share in tightly contested overseas markets is lost it is supremely difficult to get it back again.
“We've been talking in the industry about the dire need to improve port logistics since I became CEO in June 2020. Now hearing it from the other side really re-emphasised the need to address this issue as a matter of urgency. We can't afford to wait. The industry is in survival mode.”
The new government logistics road map says port terminals must be concessioned to private operators as soon as possible. The industry has been in talks with Transnet about bringing in the private sector to ramp up services at Cape Town's port in time for the deciduous fruit export season. A joint press release was issued this week full of the usual commitments.
But Ratshitanga says she's “discouraged” by what has happened, or not happened, at the underperforming port of Durban, which handles the export of fruit from Mpumalanga and Limpopo.
Transnet's announcement in July that it had chosen a Philippines-based partner to operate Durban’s container terminal triggered great excitement, only to be followed by another announcement that Transnet will only sign the contract after April next year.
It's a ticking time bomb for the industry, and for the economy, if nothing gets done
— Fhumulani Ratshitanga, CEO of Fruit SA
This doesn't suggest there will be any quick private sector involvement at Cape Town's port, nor does it communicate to EU and UK buyers the assurance they need that the “logistics nightmare” is going to end anytime soon.
The question is whether the government and Transnet fully appreciate how high the stakes are. Has Fruit South Africa been making its voice heard loudly enough?
“Loud enough is a different story. Along with other industry structures we've been engaging with the relevant role players at Transnet continuously to try to find solutions, but as frustrated as you are you don't want to antagonise those that you want in your camp.”
Having arrived at Fruit South Africa via the department of agriculture and the perishable products export control board, Ratshitanga knows the psychology of bureaucrats.
It's not only dysfunctional ports that have played havoc with fruit exporters. She says another major threat to the sustainability of the local fruit sector is load-shedding.
At stage 6, which was in effect for a large part of this year, it is not viable to farm, pack or export fruit, she says.
Anything beyond stage 3 makes it difficult to manage irrigation schedules, cooling and packing, while buying fuel for generators adds to spiralling input costs.
“Time and temperature are critical factors in the fruit trade. So if we consistently get load-shedding then we risk losing access to global markets due to quality issues and non-adherence to export protocols that require cold treatment of produce at certain temperatures for a certain period.
“Due to the short shelf life of fruit, preferential treatment and exclusions could go a long way for our industry.”
The sector has consistently argued that exempting the ports from load-shedding is “critical”, but has been told it's not possible. “Ultimately, this is what we'd like to see. This industry needs all the help it can get.”
So, what's the message to the government?
“These things, the ports, rail and load-shedding, need to be sorted out with more urgency. It's a ticking time bomb for the industry, and for the economy, if nothing gets done quickly.”
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