Logistical Issues Facing the Wine Industry in Cape Town

Jacques du Preez, General Manager for Trade and Markets at Hortgro, reported that the situation at Cape Town Harbour has not significantly improved since the challenges faced between December 2021 and February this year, and he forecasts that conditions will remain challenging for the next 12 to 24 months.

Representatives of the fruit and wine industry are working intensively to address the logistical challenges and bottlenecks in South Africa's ports, particularly in Cape Town, with the current situation further complicated by the conflict between Russia and Ukraine. Rina Hertog, Country Manager for South Africa at the international shipping company Hillebrand, announced at a Vinpro workshop that Cape Town Harbour lost 96 operational days during the business year 2021/22.

This led to a backlog of over 1,000 trucks waiting to clear their goods, putting pressure on workers loading freight onto ships. The long turnaround times resulted in many cargo ships bypassing the Cape Town port altogether. Hertog stated that no improvement is expected soon: “A lack of space and containers worldwide, disruptions due to geopolitical and civil instability, as well as high shipping rates will persist through 2022 and become very volatile in the coming months.

“Additionally, 50% of the global shipping fleet does not meet the CO2 emission targets set by the International Maritime Organization, which will come into force in January 2023. This could necessitate many ships using smaller harbor facilities and moving at reduced speeds.”

Du Preez indicated that the quality of the fruits is being compromised due to these logistical challenges, with cautious estimates indicating that the stone fruit industry is losing nearly 10% of the financial value of all fruits. This adds up to around 1.6 billion rand for the apple and pear industry, not including additional expenses like a drastic increase in logistics and transport costs.

Quantifying the impact on the wine industry remains challenging, but Christo Conradie, manager of Vinpro's wine business, mentioned that this adversely affects exporters' cash flow, leading to quality losses and bottlenecks for necessary imported goods like bottle closures and packaging materials.

Both industries are actively seeking support from various government representatives at national and provincial levels to enhance infrastructure, equipment, and productivity efficiency.

Representatives from Vinpro are also closely collaborating with shipping company Maersk and are planning to meet with Rajesh Dana, the Cape Town Harbour manager, to discuss infrastructure and logistics processes.

“By improving the flow, we can at least convince shipping companies not to bypass Cape Town Harbour,” Conradie stated.

Hortgro, alongside Agbiz, the South African table grape industry (SATI), and the Fresh Produce Exporters' Forum (FPEF), has engaged strategist Angelo Peterson to assist in strategic discussions with senior Transnet officials and aims for a public-private partnership by the end of June.

The goal of Hortgro is to separate the roles of “landlords” and port operators and work towards the privatization of the harbour.

Du Preez emphasized that the procurement and maintenance of equipment will be of central importance in the short to medium term, as well as the regulation of responsibilities and relationships between landlords, operators, and other logistics service providers.

(Farmer’s Weekly 8 April 2022)