Transnet backlog costing fruit exporters billions

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JIMMY MOYAHA: Fruit exports that are on their way out of South Africa to the tune of R1 billion are currently sitting at various ports, or rather more specifically, the Port of Cape Town, as we have some delays in a build-up of containers. This is causing a delay in the ability to export and ship these fruits out of the country.

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We are going to take a look at this with the Transnet Port Terminals chief executive, Jabu Mdaki, to try and get a sense of what is going on and see how it’s been unfolding. Jabu, lovely having you on the show. Thanks so much for taking the time.

Perhaps you can give us a sense of how long this backlog has been in place, or some of the factors that have been causing this.

JABU MDAKI: Good evening, Jimmy. The challenges that we are experiencing started back in November.

If one looks at the weather pattern for the month of November and December, you will note 379 hours in November lost due to weather and high winds.

In December, we lost 331 hours, and that means we could not operate under those conditions.

That really started putting us on the back foot because, inasmuch as we have invested in equipment that can work in high wind like the RTGs [Rubber-Tyred Gantry] that we launched last year, those can operate up to 90km/h. The wind speeds that we have seen are in excess of 100km/h.

In some instances, we are seeing wind speeds of 120km/h, which then makes it impossible for us to operate.

That is where we started seeing the backlog.

JIMMY MOYAHA: Jabu, obviously there is no expectation that Transnet Port Terminals has control over the weather. Can we perhaps take a look at some of the other factors that are contributing towards this?

How is this having an impact on the business and your operations as Transnet? Is it creating friction in terms of the movement of those containers in and out of the port?

How is it practically and logistically affecting you, and by extension, of course, the exporters?

JABU MDAKI: It has a huge impact on us because it means that we are not able to service our customers and get their fruit out on time.

We have been working with the industry to prepare for a successful season this year, but unfortunately, because of those factors, we could not perform.

I must say that over and above those factors, there are some internal issues that we had to grapple with, which we are dealing with.

Throughout the time that we have been dealing with those issues, we have kept the industry informed as to what our plans are and the changes that we are effecting to ensure that we improve the situation within the Port of Cape Town.

JIMMY MOYAHA: Jabu, you mentioned that you have kept the industry abreast of what is happening. It seems there are some participants within the industry who say that a lack of communication has been evidenced on the part of Transnet Port Terminals.

Take us through some of the challenges that you have been facing internally so that we can get a better understanding of what it is that you are grappling with.

We understand that some of those challenges might be sensitive to discuss at this stage, but give us a sense of what it is from a governance and management perspective, are there breakdowns in equipment? Give us a sense of what you are grappling with here.

JABU MDAKI: I think if one were to break this down, first of all, I have already spoken about the weather, and as you correctly point out, it is outside of our control. It is also a fact that we have invested heavily on the land side of the equipment, which is the RTGs.

On the water side, where you have ship-to-shore cranes, equipment that interacts with the vessels loading containers, we still have older equipment on that side.

We are still grappling with breakdowns in that part of the equipment. Nothing that we can say is not manageable, but it does impact us.

For the period of December, we also had to grapple with some personnel issues that we had to work through and resolve. Those issues are something that we have been quite open about when discussing with the industry and the actions that we are taking.

We also saw fit during this period to bring in leadership that will assist Cape Town to ensure that we accelerate the recovery in terms of improving performance. Not even improving it, but taking it to the level that we desire.

To that effect, we are treating it as a project.

We have appointed Earle Peters, who some of you might know led our recovery during the congestion in Durban in 2023.

He is now leading our recovery efforts in the Port of Cape Town.

This is in anticipation of the imminent retirement of our long-serving executive, Mr Oscar Borchards. We want to make that transition as smooth as possible so that Earle can come on board and start implementing some of the initiatives that headquarters and the recovery team can implement immediately.

That initiative has been well received by the industry. We are meeting with them twice a week to keep them abreast of developments. We also highlight the areas where we are struggling and what our plans are to correct that.

JIMMY MOYAHA: Jabu, before I let you go, has Transnet put in place alternatives for exporters at the moment? We understand that some of the developments and changes might take a while to take effect. Are there alternative measures for those exporting out of the affected ports, or is it more of a sit-tight, we’re going to get this done as soon as we can?

JABU MDAKI: We are able to work with the industry.

One of the outlets that we have, which is part of our project, is to utilise terminals in the Eastern Cape, the Ngqura Container Terminal, as well as the Port Elizabeth Container Terminal.

They have done a phenomenal job handling the volumes that have been redirected to the Eastern Cape.

I must be the first to acknowledge that this comes at a cost to the industry, because there is additional transportation involved to get the fruit there. However, the vessels and containers that have been redirected to the Eastern Cape have been handled optimally, and that has served us well.

The objective now is to ensure that Cape Town is able to handle all the vessels directed there.

At the moment, I am happy that we are seeing vessel diversions decreasing.

All the vessels that need to go to the Cape Town Container Terminal are now going there, and we are seeing gradual improvement. This is appreciated by the industry and the shipping lines.

The fact that the shipping lines have decided to reduce diversions and go directly to the Cape Town Container Terminal shows that the initiatives we have taken are bearing fruit.

JIMMY MOYAHA: Transnet is putting in place measures to reduce the backlog of fruit exports currently sitting at the Port of Cape Town and to ensure that these backlogs are cleared and that these fruits are exported.

We will leave the conversation on that note. Thanks so much to the chief executive of Transnet Port Terminals, Jabu Mdaki, for joining us.

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