Port congestion and high freight rates squeeze perishable shippers

Poor productivity in South African harbours is costing exporters “a fortune”, while high freight rates are making it increasingly difficult for exporters of perishable products to remain globally competitive. Carl van der Westhuizen, managing director of citrus, pome and grape exporter Sinogold, says his company loses a fortune due to the inability of Cape Town harbour to load containers when the South Easter blows even moderately. “Secondly, I believe the shipping lines are definitely a cartel on the northwest continent route and freight rates are exorbitantly high. Although of course they are going to deny this vociferously.” Shipping lines have also told Van der Westhuizen that congestion in some ports has made South Africa rank amongst the most unproductive countries in the world. “Government promises are extremely slow to materialise,” he said. “Furthermore, the steep cost slope of logistics costs in South Africa is inexorably drawing closer to grower break-even level.” Van der Westhuizen said that under these circumstances it was “no longer viable to farm as overseas markets would not increase prices in the face of a supply and demand driven scenario”. The biggest challenges he faces as an exporter of perishable products are the year-on-year increases that he said “take little account of the fact that the markets to which we send fruit refuse to subsidise our inflation”. Despite the already high logistics costs, Van der Westhuizen foresees prices continuing to increase on a steep upward slope. “Unless the world fruit production capacity is reduced by global weather pattern changes and shortages drive prices upwards, we will battle to get buyers to accept price increases,” he told FTW. “A massive problem is also the government’s extremely poor handling of the phytosanitary protocol management. To get certificates out these days is a nightmare. Many of our top markets require stringent phyto controls.”