South Africa's Citrus Growers’ Association (CGA) has warned that the demand for export containers is likely to be high between April and October this year.
This is due to the fact that citrus growers and deciduous and subtropical exporters will during this period compete strongly for available containers.
“The estimates received by the Variety Focus Groups of the citrus industry (162m 15kg cartons) indicate that 95,000 reefer containers will be needed to export this year’s citrus crop,” said the CGA. “When we include the deciduous and subtropical fruit volume, it equates to 120,000 reefer containers needed between April and October.”
The CGA noted that the forecast for the season and the equipment required to service export markets had been discussed with port authorities for some time, as well as with shipping lines.
Further investigation identified the global challenge in the repositioning of reefer equipment to where it is most needed.
“Since there is such a high demand for general freight movement out of China to the US, South America and EU; with exorbitant freight rates being charged due to the high demand, (shipping) lines are forgoing allocating space on vessels to reposition reefer containers,' the association continued.
The CGA said it seemed there was a 'perfect imbalance' in trade flows causing an equipment stockpile in China.
“The severity of this issue has affected the deciduous exports from the Western Cape with devastating consequences on exports,” the association confirmed.
Mitchell Brooke and Deon Joubert of the CGA recently met the major shipping lines to discuss these challenge, as well as port operations and capacity.
“The probability of reefer equipment shortages is being closely monitored and there are likely to be higher freight costs as South Africa competes in the current global freight demand cycle.
“Specialised reefer ships are being employed and additional vessels can be brought in based on demand, so growers and exporters must use these opportunities wisely. Exporters are cautioned to ensure market prices can cover the higher cost of freight.”
The CGA added that capacity and infrastructure would be tested to the limit if the export volumes met the forecasts, and that Transnet’s ability to manage the flows through the ports would be paramount to achieving success in 2021.