Scrutinising South African fresh fruit export logistics

CONTACT DETAILS: +27 79 877 3777 /
DURATION: Two years
LEAD INSTITUTION: Fresh Produce Exporters’ Forum
Beneficiary: All fruit sectors

Logistics is an integral part of the South African fresh fruit export chain. It is imperative that this part of the chain functions efficiently (from pack house to port) to avoid delays and ensure the smooth running of the export process. In 2008, the challenges experienced in South African fresh fruit export logistics motivated the Fresh Produce Exporters’ Forum (FPEF) to initiate a collaborated study with the Commonwealth Secretariat (Comsec). Research findings were published in the Comsec report in 2009 and distributed amongst industry stakeholders and other relevant role-players for review.

Recommendations by Comsec to the South African industry

The South African fresh fruit export logistics chain was compared with those of Chile and New Zealand, mainly because these two countries compete for the same Northern Hemisphere markets with the same fruit varieties. On the whole, South Africa did not compare favourably.

  • The South African railway system provides the only apparent competitive advantage over Chile and New Zealand. However, the current railway system has to be upgraded before rail freight can be utilised to the benefit of the fruit export industry.
  • Information technology in the South African supply chain should be upgraded to enable the electronic processing of all documentation, including export and phytosanitary certificates.
  • New packaging standards should be set and all packaging formats should be updated, including pallets.
  • Continual innovation is important to bring about new technology, methods, ideas and products. The industry should find ways to generate the necessary funding from government, the public or private sectors to make this possible.
  • Congestion in port terminals and the functioning and service delivery of South African ports is of major concern. Privatisation of container handling capacity will improve efficiency. The creation of a logistics hub in remote inland zones can alleviate congestion in port cities and terminals.
  • Two shipping lines dominate South African container services, but their capacity is inadequate to meet peak demand. Ocean freight tariffs should also be reviewed to ensure that South African exporters are charged fairly.
  • Comsec regards problems in the South African port sector of such a severe nature, that it has urged the need for a shipping strategy. The Commonwealth has agreed to fund a study that will focus on South African trade with Europe.

Industry response to Comsec recommendations

  • Information technology in the supply chain was addressed in an electronic data flow project, reported on in this book under PHI-1.
  • Several projects were initiated to bring innovation and improvement in the design and manufacturing of South African fruit packaging. Some are addressed in this book under PHI-1 and PHI-2.
  • The Tonnage off Tar project addressed the issue of rail freight extensively under PHI-1.
  • The Post-Harvest Innovation Programme is a public-private scientific research initiative and financed by government in support of continual innovation in the South African fresh fruit industry.
  • Comsec analysed the challenges experienced by the South African shipping lines and provided the fresh fruit export industry with a comprehensive shipping report. In June 2010, South African Reefer Shipping Services: Time for a Rethink, was published.
  • Should all the Comsec recommendations be addressed and successfully implemented, it would improve efficiency in the cold chain and reduce claims. This would increase South African competitiveness on a worldwide scale.