By Eamonn Ryan
As South Africa grows its agri-exports, global competition and non-tariff barriers remain significant obstacles.
At a recent panel discussion hosted by Professor Johann Kirsten and organised by Creamer Media, sector leaders examined the strategic advancements driving this performance.
Key insights came from:
- Wandile Sihlobo, chief economist at Agbiz
- Mmatiou Kalaba, executive director at BFAP
- Boitshoko Ntshabele, CEO of Citrus Growers Association of Southern Africa
- Jabu Mdaki, CEO of Transnet Port Terminals
Battling non-tariff barriers and port efficiencies
The European Union’s stringent sanitary and phytosanitary (SPS) measures, such as those related to False Codling Moth (FCM) and citrus black spot, continue to pose significant challenges for South African citrus. Ntshabele revealed the immense cost of compliance and waste associated with these regulations, estimated at an annual R3.7-billion. Resolving this issue through the World Trade Organization’s dispute settlement process is a priority to bolster the profitability of citrus growers. The implications for the cold chain are substantial, as precise temperature and pest control measures are embedded in these regulations, adding layers of complexity and cost to exports.
Ntshabele expressed an optimistic outlook on export terminals, noting that recent Transnet investments and operational improvements have led to constructive discussions and noticeable progress. He reported that Transnet has increased personnel, delivered additional equipment and is undertaking upgrades, resulting in swift dispatch of fruit from ports. This improved efficiency directly enhances cold chain integrity and speed by reducing dwell times and potential quality degradation for perishable exports.
Mdaki of Transnet Port Terminals detailed significant advancements in upgrading terminal infrastructure and operations. Key investments include new, technologically advanced RTGs, straddle carriers and Ship-to-Shore cranes at major ports like Durban and Cape Town. These new cranes feature anti-sway technology, allowing operations at higher wind speeds (up to 90 km/h), thereby reducing downtime and ensuring a more consistent flow of goods, including those requiring cold chain management.
Transnet is also focusing on its human element, as Mdaki stated. The introduction of productivity-aligned incentives has significantly improved staff morale and will continue. Additionally, substantial improvements in network systems have reduced debilitating outages, which previously hampered terminal operations.
Mdaki highlighted strong private sector interest in Public-Private Partnerships (PSPs) at export terminals, in response to the Minister’s Request for Information (RFI). He noted significant enthusiasm for partnering in initiatives aimed at rapidly transforming terminals into world-class operations. These partnerships are crucial for boosting port capacity and efficiency, thereby supporting the growing agricultural export sector and its vital cold chain.
A key development for operational turnaround was the establishment of the National Logistics Crisis Committee (NLCC). This committee fostered unprecedented collaboration, with industry leaders, including those from organisations like SAF, now directly involved in problem-solving committees. Mdaki emphasised that this direct, hands-on engagement has replaced a more adversarial dynamic, leading to open communication and a shared commitment to resolving challenges.
Streamlined procurement and enhanced efficiency
Government support, through the relaxation of certain procurement rules and regulations, has been instrumental in improving operations. Mdaki acknowledged that while challenges persist, these changes have significantly helped. Lengthy procurement processes have been transformed into “revenue generation processes,” drastically shortening turnaround times for acquiring spares and service providers.
The efforts have yielded tangible results in improved port performance metrics. Mdaki shared that the Minister’s objective is for container terminals to achieve a Gross Crane Hour (GCH) of 30 moves per hour. Starting from a low base of 11 GCH in Cape Town, none of Transnet’s terminals are now below 15 GCH, with Cape Town at a comfortable 17 and Eastern Cape terminals around 21. These enhanced GCH figures directly lead to improved ship working hours, quicker vessel turnarounds and make South African ports more attractive to vessels.
Furthermore, investments in technology are upgrading systems and network infrastructure. Mdaki noted a significant decrease in network outages, which previously caused considerable disruptions, thanks to the support of internal ICT teams.
The consensus among the panelists is that while challenges remain, the crisis has catalysed investment in necessary infrastructure and processes. The collaborative spirit, improved procurement and technological advancements, coupled with robust cold chain monitoring, are setting the stage for sustained growth and efficiency in South Africa’s critical agricultural export sector.