Pressure mounting for privatization of port of Cape Town
While it is clear that privatization is the only solution to the challenges in the Cape Town port, Tru-Cape Fruit Marketing has welcomed steps taken by the Western Cape government to mitigate risks for the current fruit harvesting season.
“I am positive about the future of our industry. There is a new generation of producers with energy, passion and the mindset to overcome challenges, but the one thing that we cannot fix ourselves is the port,” said Calla du Toit, pome fruit producer from Ceres and procurement manager at Tru-Cape Fruit Marketing.
“I believe the South African food industry is at a point where we can be truly competitive in the global food business, but we are frustrated and we need help to solve the issues in the Cape Town port,” Du Toit said, adding that time is running out, and that industry can’t afford another three to five years before they see results.
Stakeholders from Tru-Cape, Ceres Fruit Growers, Two-a-Day Group, Dutoit Agri and Link Supply Management recently met with Alan Winde, premier of the Western Cape, Mireille Wenger, Western Cape provincial minister of finance and economic opportunities, and other government officials to discuss the road forward for Cape Town’s port, which was recently ranked 344th out of 348 ports in the Container Port Performance Index, published by the World Bank in collaboration with S&P Global.
Inefficiencies in the port
At this meeting, held at the offices of Dutoit Agri in Ceres, Chris Knoetze, managing director from Link Supply Chain Management, pointed out that the inefficiency of the port of Cape Town is costing the economy billions of rands every year.
“There is no investment in infrastructure. There are no rubber tyred gantry cranes (RTG’s), straddle carriers, terminal trucks and chassis on the ground to move the containers and get a flow of the containers into the vessels and get it loaded from the vessels.”
Other problems include the poor maintenance of equipment and the loss of specialized skills in Transnet, impacting on the organizational capability to adjust and make plans when wind cause delays.
According to a benchmarking study recently published by the Port Regulator of South Africa, anchor waiting time (time vessels spend outside the port) increased by 500% between 2016 and 2022. During the same time crane moves (productivity queue side) reduced by 50% and the turnaround time of vessels takes 150% longer.
The consequences of inefficiency is directly impacting on ocean freight rates.
“Research shows global rates reduced world wide by 30% since 2021, but South Africa did not see the same sharp reduction in ocean freight rates. Our competitors benefit from these lower rates, reducing our global competitiveness,” mentioned Knoetze.
Acceleration of pressure for privatization
Min. Wenger said 55% of agriculture exports come from the Western Cape, so being able to get those products to market is an essential part of growing exports. She described several steps her department undertook in the past few months to bring the urgency of the matter under the attention of national government. She recently reported the port of Cape Town to the Port Regulator of South Africa, as she believes the regulator has a role to play in the efficiency of ports.
Glen Steyn, economist tasked with the ease of doing business for the port of Cape Town, called for the acceleration of pressure on private sector participation.
“We developed a framework which was given to the National Finance Minister, Enoch Godongwana,” he said, adding that identifying the right partner for the particular situation in Cape Town, is critical.
“Cape Town is a cool port and we need to focus on the cold chain and refrigerated containers. We have to select our private sector partner accordingly.”
Min. Wenger mentioned that her department successfully argued for an agriculture leg of the National Crisis Committee on Logistics. According to Steyn this will be crucial for selecting the right private sector partner.
Steyn also announced that four diesel mechanics and mill wrights were appointed for the season to maintain heavy lifting equipment in the port.
“We also got a commitment for seven new RTG’s and they should be in the terminal during the first week of December.”
Premier Winde commended the agricultural sector for the growth and investment that still takes place, despite massive uncertainty.
“If you unblock the blockage (in the port), it probable means thousands of jobs in the whole value chain, from planting to processing and logistics and transport. We have to get the narrative right.”
For more information, please contact Lucille Botha at email@example.com or visit www.tru-cape.com. Follow Tru-Cape on X (@TruCapeFruit), Facebook (@Tru-Cape Fruit Marketing) and Instagram (@trucapefruit).
After a meeting about the dire situation in the port of Cape Town, industry stakeholders and members of Western Cape government visited Dutoit Agri’s cherry packhouse in Ceres. From left to right: Francois Malan, managing director: Ceres Fruit Growers, Jacques du Preez, general manager: trade & markets at Hortgro, Willem Coetzee, chief executive officer: Dutoit Agri, Alan Winde, Western Cape premier, Roelf Pienaar, managing director: Tru-Cape Fruit Marketing, Mireille Wenger, Western Cape Minister of Finance and Economic Opportunities, Gysbert du Toit, head: marketing at Dutoit Agri, and Attie van Zyl, managing director of Two-A-Day Group. Photo: LUCILLE BOTHA