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A shortage of shipping containers used for transporting cargo, which included fresh produce, posed various challenges for industries across the globe last year. Although the shortage of refrigerated shipping containers was anticipated by the South African Citrus Growers Association (CGA), other challenges facing local ports contributed to ships being delayed, which ultimately caused a delay in the international supply of citrus.

In his recent newsletter, CEO of the CGA, Justin Chadwick, said the performance of the South African (SA) container terminals continues at levels far below international norms. Equipment challenges coupled with weather delays and personnel losses because of voluntary severance package (VSP) offerings to Transnet employees, has seen performance continue to deteriorate resulting in extended shipping delays. He said it is likely that port operations might continue to be restricted this year as the necessary resources to bring about the needed improvement in efficiency, will take some time to come to fruition.

Container shortage still a challenge

Francois Knowles, CEO (Registrar) of the Agricultural Produce Agents Council (APAC), said the situation surrounding the container shortage has improved since last year, but remains a problem. The shortage is a result of some exporters and importers across the world holding onto cargo containers, which disrupts flow in the value chain and subsequently causes a shortage of containers worldwide. In the process, shipping costs rise while supply chains are deprived of products.

Knowles said this creates a backlog at SA ports, blocking the flow of fresh produce as fresh produce needs to be stored in cold rooms at harbours for longer waiting periods, causing cold rooms to be at full capacity while some products can’t even be accommodated.

“The situation has improved but remains a challenge and is disruptive to stimulate the flow of exports out of SA,” he added. He said when these products are stored prior to export, quality issues, possible breakdowns, and the occasional accusation of bad management (which can lead to theft), pose a threat.

The impact of Covid-19

Knowles said the true impact of Covid-19 remains a primary cause of delays at ports. The reduction in international trade in the initial few months of the pandemic disrupted the normal flow of containers. Additionally, the scarcity of the containers in the correct locations had a huge effect on rates.

Logistical challenges such as delays in the arrival of ships and a lack of available containers are a reality as ports were affected by reduced workforce within terminals and other services, which imposed limitations on volumes that could be loaded.

Additional challenges

Knowles mentioned the diminishing infrastructure of SA ports, which have not been maintained for many years and need urgent attention. This also plays a major role and causes capacity problems.

Together with that, the Port of Durban as a primary port for exporting and importing, suffered major disruptions to its operations during civil unrest and widespread looting last year. 

In addition to the unrest, the SA terminal operator, Transnet Port Terminals, also declared a force majeure in July at the country’s key container terminals following a cyberattack, security intrusion and sabotage of its IT systems. The measure, force majeure, which is an unanticipated or uncontrollable event releasing a company from fulfilling contractual obligations, covered the ports of Durban, Ngqura, Port Elizabeth and Cape Town.  

Knowles said Transnet port terminals, which facilitates container handling services at these ports and handles 60% of SA’s container traffic at the Durban Port, had to resort to a manual system which caused havoc at that stage.

Vessels being delayed

Mitchell Brooke, logistics development manager at the CGA, said they anticipated a shortage of refrigerating containers early last year and closely monitored the situation, while they had early meetings with all relevant shipping lines exporting citrus from SA. The season’s estimates and a weekly forecast of what was expected to be exported out of each port were provided to the shipping lines in advance.

Due to the high demand for general freight movement from China to the United States, South America and the European Union, which led to high freight rates, some shipping lines were foregoing allocating space on vessels. The Mediterranean Shipping Company diverted a vessel with 2 000 refrigerated containers to the Port of Ngqura for citrus export purposes. Seven hundred refrigerated containers were also repositioned by Maersk Vallvik.

Brooke said they had a good run until June and July 2021, when mass looting in KwaZulu-Natal and the cyberattack on Transnet’s IT systems took place. This led to ships being delayed “quite extensively” and they couldn’t get visas to ports, which resulted in delays in exporting products, especially with no shipping that took place in July at the Port of Durban.   

Brooke told AgriOrbit that Variety Focus Groups’ prediction that 92 000 refrigerated containers will be needed to export local citrus during the 2021 season was spot on, as the same number of these containers were used at the end of the season.  

“It did, however, take three weeks longer to get the crop out because of the delays and getting containers into the port.” These delays have a bottleneck effect and the congestion at the ports’ cold rooms resulted in considerable amounts of fruit which could not yet be shipped for a considerable amount of time. 

According to Brooke, they are trying their utmost at this stage to avoid the same situation this year and are keeping it in mind that shipping delays are still expected.

Dire situation at Transnet

Brooke said notwithstanding disruptions due to the pandemic in 2020 and its domino effect, the situation within the Transnet Group remains dire, with operations at the port authority and terminal division declining to the extent that there are massive delays to ship callings across SA ports.

Maintenance and refurbishment of the current fleet of machinery and equipment at the ports are not taking place. This maintenance and refurbishment are necessary to service the ports adequately. Consequently, ships spend days or weeks on the coast before calling ports, and in some cases months, before finally departing SA after completing the full port rotations. Some shipping lines are pulling services from some of the SA ports, and in many cases omitting to call ports due to the severity of the delays that ships are encountering.

Seasonal review of citrus

Despite the delays in exporting to international markets, the soft citrus seasonal review for 2021 provided by the CGA, indicated that the volumes packed for export last season reached a record high.  A total of 30,9 million 15kg cartons were packed, surpassing the 2020 volume of 23,6 million cartons.

A total of 31 million cartons of lemons were packed for exports in 2021, finishing 3% up on the March 2021 estimate of 30,2 million cartons.

The navel orange sector achieved a record export volume of 27,2 million cartons, just ahead of 2018 during which 26,7 million tons were packed. This was just 3% over the March 2021 estimate.

Grapefruit volumes packed for export last year were estimated at 15,9 million cartons (17kg equivalents), with the actual amount packed being 13,7 million cartons.  

The road ahead

Brooke’s advice to citrus growers is to be aware and prepared for the new season.  With the possibility of port operations being constrained this year, exporters need a thorough and well-developed logistics plan for 2022. Once this plan has been developed, they will need to keep their ear to the ground to ensure they are aware of events that might impact the plan. 

Updates on this situation regarding logistics and shipping, and on ways in which these challenges can best be managed will be provided at the Citrus Research International post-harvest workshops that started on 25 January and will continue until 18 February.  Visit citrusres.com for more information.

Roadshows by the CGA will also take place at the end of February and early March. Visit cga.co.za for more information. For any additional enquiries, contact Francois Knowles at 012 460 9910 or francois@apacouncil.co.za, or Mitchell Brooke at 031 765 2514 or mitchell@cga.co.za.

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