This document seeks to report on the different initiatives of the fruit industry on logistics and inform members of Fruit SA’s member associations on these.
Prior to the 2021/2022 deciduous season, the fruit industry worked relentlessly to ensure that port and logistics arrangements for the coming season were in place. This includes consultation with Transnet and other service providers regarding the successes and challenges encountered during the 2020/2021 deciduous fruit export season.
These interactions occurred at municipal, provincial, national, and ministerial level. On a local level, industry representatives met with representatives from a variety of service providers, including but not limited to Transnet Port Terminals, Transnet Port Authority, Transnet Freight Rail, and shipping lines. In preparation, industry engaged in multiple sessions deliberating on key aspects of the logistics environment.
Industry provides estimates of upcoming fruit volumes, analyses key operational functions, and develops guidelines with the various logistics stakeholders, to ensure greater institutional integration in the logistics supply chain. The CGA also engaged and continues to engage with key logistics stakeholders both in the private and public sector on logistics issues.
The sections below provide details of these activities.
2. Fruit industry interventions
2.1 Engagements with Transnet and government
The industry became increasingly concerned about the ports capacity to ship the growing amount of cargo that needed to be moved. In close collaboration with the Provincial Minister of Agriculture, Mr Ivan Meyer and the then Provincial Minister of Finance, Economic Opportunities and Tourism, Mr David Maynier, in June 2021, the FPEF and CGA were provided the opportunity to engage Transnet in the Western Cape Provincial Parliament, Standing Committee on Finance, Economic Opportunities and Tourism.
Benefiting from Fruit SA’s association with Agbiz, industry also identified the need to address port matters on national level, having subsequent meetings with the Minister of Public Enterprise, Mr Pravin Gordhan, during 2021. Notwithstanding, the fruit industry continues to work closely with Transnet SOC Ltd and its CEO, Me Portia Derby. Me Portia Derby and senior executives visited Schoeman Boerdery in June 2021.
The purpose of the visit was to provide orientation and seek alignment with Transnet on future strategies and present operational challenges.
The fruit industry participated in weekly TPT Deciduous Logistics Integration meetings which were held every Wednesday from 10:00 to 11:00. The focus was on the deciduous season at the port of Cape Town (last meeting was on 20 April 2022).
At these meetings, parties were appraised of fruit volumes packed and shipped (also comparing to the previous season) and forecasts, performance of port operations, container availability and planning for improved efficiencies by industry and/or other players in the port system.
Industry was encouraged to use the night shift to reduce congestion during day shifts. In addition, industry was also encouraged to use specialised refrigerated vessels (SRV) as a shipping option, combining pome, stone and table grape volumes to load on these vessels.
Prior and during the season, industry advocated for the use of inland terminals, such as Belcon, to alleviate pressure on the supply chain. These meetings will continue throughout the citrus season in a format hosted by the CGA. The industry will also host these meetings for the upcoming deciduous season.
Industry and PPECB cooperated closely during the deciduous season to allocate resources to cold storage facilities that enabled night shift container loading.
Subsequent operational interactions with the Transnet team occurred throughout the season to ensure continuous operations. Industry also participates in the following daily and weekly meetings to stay informed, influence, monitor, and inform industry about key logistics focus areas surrounding the port:
- Transnet Ops meetings – 9am Daily
- TNPA Stakeholder Engagement Meeting – Weekly
- Port Consultative Committee meetings – Quarterly
- Port Consultation Workshop (Western Cape, Ease of doing Business team) – Bi-annually
- Port of Cape Town Task Team – Quarterly
- Port of Cape Town KPI Alignment Workshops
- Nelson Mandela Bay Business Chamber
At the strategic level, engagements with Transnet are through Agbiz due to the need to coordinate and streamline the agriculture sector’s interaction with Transnet. This arose from a meeting between Transnet and agricultural stakeholders which was held on 9 February 2022 to explore ways to resolve long term strategic issues to improve operations at ports.
This meeting was organised by Agbiz, and the fruit industry was represented (CGA, SATI, FPEF, Hortgro and Fruit SA). AgriSA were also represented at this meeting. Below are some of the highlights from the meeting:
- Transnet is open to all suggestions to improve
- Transnet Port Terminals (TPT) is fast tracking the revitalisation of the equipment with the support of the Original Equipment Manufacturers, through framework agreements
- Transnet Freight Rail (TFR) to develop rail in partnership with private participation
- Agri stakeholders to consider potential for consolidation points in City Deep
- Agri stakeholders will consider an interface agreement with Transnet to allow for them to step in on investment and fast track procurement required. This agreement can be signed by Agbiz
In addition, the FPEF, Hortgro and SATI have engaged a consultant to “facilitate a permanent solution through which landlord and operator is split” focusing on the port of Cape Town. The focus is “on establishing and agreeing a framework towards the establishment of a feasible public private partnership (PPP) for Cape Town by getting alignment between stakeholders”.
The FPEF, Hortgro and SATI recognise the need to coordinate actions by impacted parties and have thus invited other industries/stakeholders also impacted by ports to engage with the consultant to develop synergies.
2.2 Industry logistics platforms/forums
Consequently, it is essential to provide feedback on the current logistics environment in marketing forums, engaging both exporters and producers. The industry uses the various commodity marketing forums as platform to inform the wider industry, such as the Joint Grape Marketing Forum (JGMF), the Pome, Stone and Berry Joint Marketing Forums and the Citrus Marketing Forum.
Agbiz established a Trade and supply chain coordinating committee comprising of various stakeholders including the fruit industry associations. This also responds to Transnet’s request for a single channel for engaging with industry to align strategies, among others.
The Agbiz committee will source information from various sub-sectors to build a “dashboard” that can forecast demand across different value chains and geographical areas. This would then provide indications of the peak demand on different ports and available storage capacity and the pressure that it will place on ports. This is expected to assist Transnet to plan their resource mobilisation.
Fruit SA established a Logistics Committee and a Shipping Forum. The Logistics Committee seeks to coordinate, align and prioritise cross-cutting logistical challenges in the industry, concerning Fruit SA members and their respective fruit categories, by developing strategic and operational execution plans, for Fruit SA member representatives to jointly deliver on. In addition, the committee aims to enable Fruit SA members to act according to clear processes and guidelines, in a coordinated manner, to serve the collective fruit industry.
The Logistics Committee meets three times a year and has met once. The Committee comprises of one representative of each of the members of Fruit SA.
The aim of the Shipping Forum is to understand the complexity of South African port operations and to collaborate and engage on matters of port productivity and shipping strategy with stakeholders. Its members are members of Fruit SA. The Forum has been meeting monthly since January 2022 and meetings are a valuable platform for exchanging information and looking for solutions to logistics problems, particularly relating to ports.
Another critical component to operational decision making, remains information.
The FPEF, HORTGRO, SATI, and the CGA collaborated with Linernet to consolidate information sharing. This enables daily, weekly, and monthly access to critical information, including reporting on port and supply chain operations to the broader industry.
2.4 Investigations on the impact of port delays and legal implications
In 2018, the CGA sought a legal opinion on service levels of Transnet given the extent of delays and damages that occurred as a result. The FPEF, SATI and HORTGRO also recently embarked on investigating the impact of port delays and the legal implication for fresh produce producers and exporters.
The legal opinion’s substance discusses issues such as contractual liability, the Public Protector’s jurisdiction, delictual claims for damages, a mandamus application, and a court interdict.
The opinion was shared with industry. The opinion does not represent the opinions of the relevant forums but simply provides the members of the associations/forums with the options available to them in their Individual capacities.
The key focus areas for the 2022/2023 season are as follows:
- Delivery of two additional STS (Ship-to-Shore) cranes to the port of Cape Town
- Requesting for the port of Cape Town Container Terminal, operating a three-berth system, utilising three to four cranes on rotation on each berth.
- Achieve a consistent average 3,000 Moves Across the Quay over a 7-day period.
- A prioritisation system to improve the transport network between nodes and to the port.
- Upgrading plug point capacity at Belcon and increasing the use of the inland facility as a critical (Transnet) node, managing the cargo push strategy towards the port, to alleviate gate & port congestion.
- A focus on the equipment maintenance process and critical items required in the short and medium term.
- Exploring capital expenditure in port and other logistics infrastructure.
While the industry endeavours to play an active role in finding solutions, most of the issues are beyond industry’s control besides influencing and facilitating certain processes. Industry will continue to engage with all relevant players to highlight the issues and work towards solutions to these issues.
Issued by Fruit South Africa