Cape Town - Cargo volumes at the Port of Cape Town (PoCT) are growing and have the potential to increase by 26% over the next five years, but the capacity to move perishable cargo on time is worsening dramatically.
This is according to Glen Steyn of the Western Cape Department of Economic Development and Tourism who provided insight into the capacity struggles at the port.
Agriculture MEC Ivan Meyer met key stakeholders in the agricultural sector on 6 December, regarding the grave and deeply concerning situation at the port.
The purpose of the meeting was to hear directly from the industry and to better understand the impact that inefficiencies and failures at the PoCT were having on agriculture exports.
“I am deeply concerned about the failures at the PoCT and the significant impact it is having on agricultural exports.
“This week’s meeting offered our agriculture sector the opportunity to outline the challenges, highlight the severity of the crisis in the PoCT and discuss possible ways forward to improve the situation on the eve of the peak export season for our fruit industry,” Meyer said.
While stakeholders noted the work being done by Transnet’s National Logistics Crisis Committee (NLCC), their deep concern was that the NLCC’s focus has been largely on rail and may not be indicative of the challenges faced at ports and container terminals across the country servicing agricultural products.
This, even though the evidence showcases the potential positive impact of agriculture through value added to the economy, fiscus and jobs.
Steyn said that the growth in agricultural exports could potentially create another 20,000 jobs and generate R22 billion for the fiscus from PoCT, but that this potential is being undermined by the slipping capacity at the PoCT.
“The target is that the PoCT moves 50 containers per vessel per hour. The current performance is 24 to 25 per hour – half of what it should be.
“The terminal is unable to manage the normal flow of 1 000 to 1 500 containers from our fruit producers per week and when the demand doubles to 3 200 during the peak season which is between December and March, we fear that the terminal will collapse.”
Anton Rabe of Hortgro highlighted that for the fruit industry delays lead to severe quality penalties. It is estimated that R2.5bn was lost over the last season, and the table grape industry suffered just over R1bn losses in the 2021/22 season alone.
“There is currently a disconnect regarding the realities of the perishable fruit industry and a lack of understanding for the impact that the inefficiencies at the PoCT are having on farms, jobs and rural communities,” Rabe said.
Wolfe Braude, fruit desk manager at Agbiz, highlighted the economic value of primary agriculture in South Africa.
“Fruit exports which include categories such as citrus, deciduous and grapes together are higher in value than manganese or chrome exports.
“Agri exports in total are twice the value of South Africa’s machinery exports and slightly higher in value than South Africa’s automotive exports.
“The whole value chain, with all the support services around the modern, industrialised South African agricultural sector, are estimated to comprise up to 15% of South Africa’s GDP, all flowing from primary agriculture,” he added.
This does not diminish the value of these other sectors but rather underlines the need to treat agricultural challenges with significant urgency and priority.
Stakeholders cautiously welcomed the news that the Minister of Public Enterprises Pravin Gordhan would be visiting the PoCT in the week, but with the port hampering the agriculture industry they said that it is critical that Transnet acts with urgency now.
The stakeholders shared that it is essential that Gordhan gets the full picture of what is happening at the port and why it is in such a poor state.
“We note the news that Minister Gordhan is interested in understanding the full value chain and the impact severe inefficiencies and failures are having on the fruit exports,” Meyer added.
“We note the announcement that an additional berth has been opened at the PoCT which we hope will ease some of the pressure. However, our grave concerns remain that the PoCT will not be able to meet the needs of our agricultural sector which relies heavily on an efficient port.
“Worldwide the private sector is playing a more prominent role in the management of ports. We see no reason why the PoCT cannot be managed similarly.
“Greater involvement of the private sector in the PoCT will be in the interest of the agricultural industry and the economy. Our Growth for Jobs strategy supports the need for greater private involvement in the port,” concluded Meyer.
Last month Premier Alan Winde met citrus fruit industry stakeholders in Ceres where serious concerns were also raised over ongoing inefficiencies at PoCT.
He said that given that 42% of their produce (stone and pome fruit) is exported, amounting to more than R17bn, these inefficiencies are a significant impediment to the industry’s growth and the economy of the region.
The most serious shortcomings at the PoCT are little to no investment in infrastructure, poor maintenance of existing infrastructure; and a loss of specialised skills.
“We have an opportunity to grow exports through the port and create more jobs, yet Transnet cannot seem to get its affairs in order and so critical logistics hubs are suffering from underinvestment,” Winde said.
“We as the WCG will intensify pressure on national government to prioritise the PoCT.”