Rising cost of cold chain challenges the industry

Perishable exporters and their logistics providers have faced a tough year – with the Transnet strike adding insult to injury. “Not only did it cause huge storage problems at the cold stores but its impact on international supermarket contracts was devastating,” says TSC Thusano’s Mario Tito. “And although the strike lasted 17 days, two months later we are still feeling the pinch as carriers were unable to reposition empty reefer containers in South Africa and now most lines have a shortage of equipment. The result is that many exporters have been forced back to conventional shipping where they can get space.” For a medium sized company like TSC the strike had huge financial implications, says Tito. “I can only imagine what the losses for larger companies must have been.” And while the outlook for the rest of the year looks more promising, significant challenges remain. Chief among these is the cost of the cold chain, says Tito. “Year on year costs are rising by approximately 15% – and if you lookT at prices exporters are negotiating overseas, there has basically been no increase for the past three years. This will put more pressure on logistics service providers and carriers as this is the first place that shippers look to cut costs.” But significant opportunities exist for SA companies – particularly in Port Elizabeth and at the Port of Coega. “Japanese citrus steri shipments can now be inspected in Port Elizabeth and do not have to be transported to Durban, which is a huge cost saving for the exporter. “TSC Thusano Supply Chain is involved in a number of other ventures and negotiations which is why we are investing in staff in this region and not making use of agencies.” Despite the difficult global economic environment, the company has grown almost 300% year on year, says Tito. “We are currently negotiating a joint venture with a global logistics company that will give TSC a more international flavour and offer our clients a truly door-to-door service,” he added.