Making Things Happen
Cool Logistics Resources Managing Director Alex von Stempel recently interviewed Andy Connell, Director A-Bar-c Services, South Africa. Andy has been involved in import and export supply chain logistics for both dry goods and perishables for over 30 years. Many of those attending previous perishable logistics events, including Cool Logistics Africa, Cool Logistics Asia and Logistics Hub in recent years, know Andy as a committed individual who can bridge the gaps between shipping and logistics, production and marketing, fiction and fact.
Despite a huge amount of problems resulting from the impact of COVID-19 on perishable logistics in South Africa, Andy Connell believes that only a joint effort between shippers, carriers, truckers, the IT sector and government can help beat COVID-19, the common enemy — with some success, it seems.
In early March, the Bureau for Food and Agricultural Policy (BFAP) set up a database for recording and prioritising bottleneck relief tools. Industry groups set up response teams internally to receive information about specific cases where the processes from farm to port were compromised.
Any problems encountered, as well as any good innovative ideas, were channeled by the response teams to the BFAP who then used direct links to government to address bottlenecks and evaluate ideas.
The COVID-19 response teams included the support of the growers, packers, transporters, shippers and the Department of Agriculture, (which was recently renamed DALRRD Department of Agriculture, Land Reform and Rural Development).
The context and the challenge
In a rapidly de-globalising world, all news becomes suddenly local even though ‘wild fires’ seem to be spreading at an alarming rate, thanks in part to the wonders of connectivity, of which the media are, of course, one of the most palpable expressions.
Whilst some governments are trying to contain social unrest others may be failing before our eyes or running away from the very forces of innovation and rejuvenation.
Yet, this may be only playing into ‘apocalyptic visions of a post-global world’, when in reality there is only one thing at stake: survival.
There is no point in discussing when and how to drain the swamp, when it is the crocodiles you need to be shooting first,” says Andy, characterising the attitude of the South African fresh fruit industry vis-à-vis COVID-19 and finding ways how to both live with and effectively combat the virus.
As South Africa is now entering the peak of the citrus season and since citrus fruit represents the largest agricultural export from South Africa, the urgency of finding solutions to move product for export is all too clear.
Packed and Shipped
This year there has good crop of lemons and demand keeps holding up, not least because of the craving for Vitamin C in countries affected by the novel coronavirus. Of the 26.5 million cartons being produced 5.2 million were exported in 2019. This year the figure rose to 6.5 million tonnes.
The lemons season started in January, a little earlier than usual and forecasts for Valencia and Navel oranges are encouraging, according. Most of the lemon crop is destined for Europe.
The government realised early on that agriculture is of cardinal importance to the economy and responded to the needs of the South African food and specifically fruit industry bodies such as the Fruit South Africa (FSA).
Farm labour is a very sensitive issue and the government recognised the need to keep exports flowing.
“We are trying to save the labourer in the field. If we cannot export efficiently, there is nothing to pick for the labourer. So he stays at home, doesn’t earn any money and is becoming a burden to the state. This would be another tragedy,” Connell says.
So a system of travel passes for migratory labour — the pickers and the packers — was issued and even though there were the inevitable cases of hold-ups due to initial confusion and ignorance at various levels of the administration the task of allowing exports to flow again was set in motion. And, of course, also the truckers were issued with travel passes as they too were considered essential workers.
Undoubtedly there have been problems on land borders and also at South African seaports.
Avocadoes were the test case, which were badly hit as the season was coming on stream just when the country went into lock down.
The problem was that the fruit needed to be packed and shipped within 5 days. As a result some boxes were rolled.
The elephant in the room
One of the biggest problems was — and still is — Connell admits, logistics. Ports run by Transnet, the South African parastatal responsible for operating most of the country’s infrastructure, rigidly followed guidelines to protect port labour, reducing port access to ships by closing berths and throttling gang sizes. Following concerted pressure by both the export and import industries, notably in conjunction with COVID-19 response teams, to extend trade not just to essential trade flows such as food, medicine and personal protection equipment (PPEs), but also to non-essential goods, restrictive practices are gradually being lifted and adjusted, thereby alleviating the bottleneck problems in Durban and Cape Town, the two major general cargo ports of the country for fresh produce. Durban and Cape Town gradually increased capacity, but according to local press reports the situation in Cape Town is still continuing. The latest shipping company replacing a main call with a feeder service to Port Elizabeth is DAL.
The reason why it was so important for both dry cargo and temperature-controlled cargo interests to come together on this occasion are the economics of container shipping: if dry cargoes, which represent well over 90% of trade, are stopped, there won’t be any reefer containers available for the country’s food export industries.
South Africa has suffered badly from blanked sailings. For example, Maersk and CMA CGM pulled services to the Middle East due to a lack of critical mass of cargo.
Carriers also started charging demurrage and detention to importers threating the survival of many other South African industries, Connell warns.
The other big problem is the weakness of the Rand against the USD affecting primarily exports. Shipping costs are calculated in dollars. With a rate of 17 Rand to the US dollar the input cost to producers has been huge.
Practical logistics solutions
On the other hand, shipping lines have been quick to react and allow import boxes to be released to shippers after pre-trip inspection, sequencing boxes covering longer distances before releasing boxes loading close by.
A further significant setback was when a fire broke out on the CMA SAO PAOLO outside Cape Town a few weeks ago. The ship had to be pulled into the port in order to allow the fire crews to get to the central hold. As a result all the deck containers, (which contain the empties) had to be cleared. This Force Majeure resulted in significant delays in Cape Town operations.
Another good example of cooperation between everyone involved in the supply chain has been the rapid adoption of E-certification, which has made a huge progress and the government has been very supportive, especially with regard to e-phytosanitary of fresh produce cargoes and e- certification of origin certificates.
“There has been more progress with e-phytos in the last 6 months than in 6 years prior to COVID-19,” as mentioned in a recent newsletter from the Citrus Growers Association.
So what is Connell’s key message to the fresh produce market and everyone involved in the trade?
· Learn how to manage inventory better
· Be patient, build buffers
· Don’t hoard unnecessarily!
Perhaps we have also become JIT junkies. Perhaps it’s time to re-think and re-build the coldchain.
The 12th Cool Logistics Resources Global Conference and Exhibition takes place 13–15 October, both as a physical event onboard the SS Rotterdam and as a virtual event that can be attended from anywhere in the world. To reserve your place today, go to our booking site https://na.eventscloud.com/website/13034/
