Fruit farmers and exporters are considering legal action against state-owned logistics company Transnet National Ports Authority after a four-year struggle with the movement of their produce through the container terminal at the Port of Cape Town.
Shipping delays at the port, caused by endemic inefficiencies and equipment failures, cost the industry an estimated R2.5bn in the 2021/22 season, and since then the situation has not improved. The table grape industry alone lost about R2bn in the 2022/23 season.
Anton Kruger, CEO of the Fresh Produce Exporters’ Forum, said the organisation is still quantifying the losses likely to be suffered this year.
“It is now the peak season for table grapes, plums, peaches, nectarines, apricots, all of which are destined to be exported via the Port of Cape Town. Due to the problems at the port, exporters rather send the fruit to be exported via Gqeberha or Walvis Bay in Namibia at an additional cost of at least R25,000 per container.”
Kruger said some shipping lines are now avoiding the Port of Cape Town, opting to rather berth in Gqeberha as shipping delays at the port could, in some cases, extend to at least three weeks.
The SA Table Grape Industry Association said in addition to diverting some product to Gqeberha, grapes are being transported with smaller vessels to Port Louis in Mauritius to be shipped out.
“Some of the larger vessels destined for the Far East will no longer be calling in Cape Town, and smaller vessels being used to transport this product, including ferries, are sailing to Port Louis in Mauritius,” the association said.
According to industry association Hortgro, which represents various organisations in the deciduous fruit industry, the total volume of apricots, cherries, peaches, plums, apples and pears shipped through the Port of Cape Town in November and December was down about 35% compared with the same time last year.
Hold accountable
Transnet port performance data, supplied by the Western Cape government, shows that the average turnaround time for vessels at this port from December 11 to January 8 was 11.5 days, against a target of four days. The average number of containers moved was 7,717 for the past four weeks against a target of 20,000.
Hortgro and other industry representative bodies now want to hold Transnet accountable for losses and damages suffered by farmers and exporters.
In a letter to members, seen by Business Day, Hortgro says such legal action stems from Transnet’s “direct responsibility for farm-level losses and the impact thereof on the profitability of our industry, the risk of job losses and consequential destabilisation of rural communities”.
Promises made by Transnet to procure additional equipment, improve maintenance on existing equipment, ensure the availability of spare parts, improve planning and make sure enough personnel work over the festive season had come to nothing, Hortgro said.
“We believe that as an industry we have done everything we could to assist and support Transnet with accurate fruit flow projections and optimisation of the container flow into the port, but that we have yet again been let down. This despite repeated efforts, also with a visit mid-December by [public enterprises minister] Pravin Gordhan to sensitise management and labour as to the needs of our industry and the complexities surrounding the peak season,” the industry association said.
Hortgro said the industry is considering various legal options, including a class-action suit against Transnet, but it acknowledged that such an approach would be “complex, lengthy, and expensive”.
“What is critical at this stage is that there must be consequences and accountability for poor performance.”
Kruger said legal action will be complicated as exporters lack contracts with Transnet; their contracts are with shipping lines. “However, we are awaiting legal opinions,” he said.
Export season
Wolfe Braude, manager of Agricultural Business Chamber’s (Agbiz’s) Fruit Desk, said the industry is “desperate” and doing everything it can in partnership with Transnet to fix things while exports continue.
“The [industry] is in the initial stages of reaching consensus [with Transnet] on what improvements are possible in the next two to six weeks as the export season reaches full peak. This welcome multifaceted support by senior Transnet management, flowing from recent positive engagements, as well as the recent arrival of seven additional [rubber-tyred gantry cranes] will help. The problem is these improvements have to be agreed and integrated while fruit is increasingly coming in [from the farms],” Braude said.
This is the fourth consecutive year that farmers and exporters have had to contend with the impact of failures at the port on their businesses, and many farmers are now facing severe financial difficulties.
The repercussions of port failures are not only financial; SA’s reputation as a reliable fruit exporter is also suffering, said Braude.
“Buyers on the other side are growing increasingly concerned about the reliability of when and in what state the fruit will arrive from SA.”
Such reputational damage could end up costing SA dearly.
According to Braude, SA fruit exports are valued at about R72bn and account for about 35% of SA’s total agriculture exports.
The value of SA’s agriculture exports is about double that of the country’s iron ore, or iron and steel exports. It is also higher than the value of automotive exports, said Braude.
Not overnight
But, he said, the industry has been in “close collaboration” with Transnet and the national logistics crisis committee.
“We are finally getting the structure in place that we have needed over the last few years of crisis to address operational issues in real time. But these problems can’t be solved overnight,” he said.
One of the things the industry would like to see happen is “real discussion about private sector investment at the Port of Cape Town”.
The Western Cape government supports the industry’s call for private sector participation at the port. It has “consistently warned that the performance at the Port of Cape Town is deteriorating, and now our concerns have materialised during the peak export season,” said Mireille Wenger, Western Cape MEC for finance and economic opportunities.
“Transnet’s efforts to address the crisis at the ports are not bearing fruit,” Wenger said.
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