Sapo strips SAFT of portside functions

Ray Smuts SOUTH AFRICAN Port Operations has declared its intention to take over certain portside functions from SA Fruit Terminals from the start of the next deciduous and citrus seasons. Although SAFT is putting on a brave front it would clearly have wished to retain control of IT and forklift operations in the interest of ongoing productivity. "The customer base insists on a competent operator at quayside," says SAFT m.d. Patrick McLoughlin, adding: "Fruit tally is very specialised and and we do not believe that Sapo will be able to perform at the right level." Even though Sapo denies the assertion, industry watchers and clients are speculating that assuming control of those functions handled successfully by SAFT since its inception three years ago may be a precursor to the port operator taking overall control of the terminal operations and logistics. One can therefore understand SAFT's anxiety to place on a more formal footing its relationship with Sapo, a concept mooted by g.m. for operations in Durban, Temba Gwala. Operations director Steven Janssen makes the point that the true success of a logistics chain does not lie within a port terminal itself, which explains why SAFT expects clear definitions of its and Sapo's roles in the agreement currently being thrashed out. McLoughlin and Janssen agree that forsaking the IT and forklift functions does not come like a bolt from the blue. A clear understanding existed that Sapo reserved the right at a future stage to take charge of its own operations, but they question why now? By way of background Janssen explains that due to Sapo's lack of infrastructure and funding SAFT agreed in 1999 to supply IT equipment and personnel and an initial eight forklifts (now 28), which laid the company open to risk exposure of R5 million for the duration of a five-year lease contract. In turn, Sapo had agreed to rebates of R5 per pallet for each of the IT and forklift functions which reduced the per pallet rate from R60 to R50. The arrangement worked without a hitch until last month when Sapo suddenly announced it was assuming control by putting its own IT equipment, personnel and forklift equipment in place. At the same time it dramatically increased SAFT's fruit handling rate, the contention being no increase had occurred in 2001. Protracted negotiations for a reduction have yielded no conclusive results thus far.