Port delays at Cape Town and Durban have aggravated challenges for food producer RFG Holdings, affecting its international revenue for the 11 months to end-August.
RFG, whose products include Bull Brand corned beef and Hinds spices, on Thursday reported a marginal revenue increase of 1.4% for the period in review.
While regional operations showed resilience, the group’s international segment was hurt by shipping delays, among other issues.
“Revenue in the international segment was impacted by softer global pricing and demand for canned deciduous fruit and lower volumes due to shipping delays at the Cape Town and Durban ports,” it said.
Cape Town’s port performance played a critical role in these disruptions. Ranked last out of 405 ports in the 2023 Container Port Performance Index, the port is grappling with congestion and delays, which intensified due to adverse weather conditions and equipment breakdowns.
This led to a reduction in RFG’s export volumes, with international shipments delayed by an average of three weeks, the group said.
One of the challenges at the Cape Town port has been a lack of rubber tyred gantries (RTGs) and their engines.
RTGs are machines designed to load and unload containers.
Transnet in its 2024 annual report released last week said it had invested an additional R130m in procuring seven second-hand RTGs for the Port of Cape Town.
“This investment was made to address the crisis experienced in January 2024 with the import and export of fruit. These gantries have since been delivered and are operational, significantly improving throughput at the port,” it said.
The state-owned freight and rail group’s efforts to turn around the performance of the Durban port largely depend on introducing a private partner at the Durban Pier 2 Terminal, which accounts for nearly half of SA’s import and export traffic.
Its decision to award Philippines-based International Container Terminal Services Incorporated (ICTS) a 25 year contract to operate and manage the terminal is subject to a legal challenge from losing bidder APM Terminals.
RFG’s international revenue declined 11.3% due to lower demand for canned deciduous fruit and a 10.4% drop in export volumes.
Shipping delays compounded by weather disruptions have severely affected supply chains, with a distress vessel at Berth 601 contributing to the operational bottlenecks.
“This decline was partially offset by the 1.6% depreciation in the rand against the group’s basket of trading currencies which had a 1.4% positive impact on revenue in the segment,” RFG said.
Container movement at the ports recovered slightly earlier this month with daily averages increasing by 26.1% after a slump in the final weeks of August. However, the ongoing challenges at Cape Town port continue to pose risks to exporters.
RFG’s regional operations fared better, with revenue increasing 5.3%, driven by selling price inflation of 8.1%. However, constrained consumer spending and competitive pressures led to a 2.5% decline in sales volumes in the latter half of the period.
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