REVIEW OF DURBAN PORT OPERATIONS 2013

Statement: the 2013 citrus season in the Durban port was fraught with logistical problems from the onset of the season. Congestion, bottlenecks and inefficiencies led to massive losses (Cost and Quality) being incurred...

Average Southern African Citrus Supply Chain Costs (Average June - August)

Consider the following, in South Africa:1. There has been a 300% increase in electricity costs over 4 years,2. There has been a 60% increase in Diesel costs over 3 years,3. There has been a 52% increase in labour costs – 102% by 2015

2007 (Jun - Aug)

2008 (Jun - Aug)

2009 (Jun - Aug)

2010 (Jun - Aug)

2011 (Jun - Aug)

2012 (Jun - Aug)

2013 (Jun - Aug)

2014E (Jun - Aug)

R 0

R 20

R 40

R 60

R 80

R 100

R 120

R 140

R 0

R 2

R 4

R 6

R 8

R 10

R 12

R 74.85

R 84.51 R 85.58 R 88.79R 93.76

R 102.29

R 116.75R 122.87

On Farm Cost (15 Kg Eq. Carton)Ave Transport Cost (650 Km)Ave RSA Port CostAve EU Freight Cost

Ran

d p

er

Cart

on

Ran

d p

er

US

D

(70% Increase 2007 - 2014E = Estimated peak Jun - Aug)

Overview of Some of the Symptomatic Problems

Herewith an overview of the symptomatic problems encountered in the Durban port for the 2013 season:

1. The PPECB inspection data suggests there has potentially been a 15% increase in citrus production from the northern region of ~10million cartons YTD, Early season Grapefruit arrived in port from week 16 with a strong focus to Japan,

this was mostly directed to the FPT facility which became bottlenecked, Navel (late) production appeared to be higher than previous years with earlier

production of Valencia’s between week 28 – 31.

2. Durban has potentially handled 100,000 additional pallets YTD, Maputo decreased by an estimated 25,000 pallets.

3. Cold store capacity in Durban has factually decreased, In 2010 Durban cold store capacity = 62,500 slots In 2013 Durban cold store capacity = 52,500 slots (333 Logistics decreased by

6,000 slots, 328Ice did not handle citrus in 2013 a loss of 6,000 slots). In 2012 introduction of 1,000 slots at SAFT Bayhead, In 2013 introduction of 1,000 additional slots at CCS Bayhead.

4. Durban suffers from infrastructural inadequacy,1. All cold stores that receive citrus in the Durban area are located in busy industrial zones. This

obstructs the free movement of inbound trucks and containers to facilities, often leading to congestion and grid lock,

2. Only two cold stores in Durban are equipped with mobile racking, fixed type drive-in racking is not suited to citrus containerization due to order picking,

3. Some cold stores are affected by the ‘High Cube’ pallet syndrome in which there are inadequate slots – cold stores are having to remove top layers, store and then rebuild the pallet at load out.

Overview of Some of the Symptomatic Problems

Herewith an overview of the symptomatic problems encountered in the Durban port for the 2013 season:

5. The railings data suggests that there are approximately 350-400 road trucks that arrive in Durban loaded with citrus per day. There is no management and coordination of trucks being routed into Durban thus leading to frequent periods of congestion,

6. An increase in DAFF inspections caused severe bottlenecks due to the backlog of railings to be cleared from intake areas making way for new railings to be received efficiently, Inspections for CBS RMS protocols i.e. 4 days from PPECB inspection to arrival in

port, Increased inspections for protocol markets (steri shipments) i.e. China, Lack of DAFF resources to adequately conduct the required inspection rates, High number of problematic or erroneous consignments with document problems,

incorrect sample document, incorrect labelling and packaging of cartons for specific markets.

7. The PPECB data suggests there has been a 25% increase in the number of containers that have been routed out of the port in 2013 YTD. There were 7,700 additional containers that were routed out of Durban. Containerization by virtue leads to operational problems, Lack of integrity of supply from the various container depots to cold stores

disrupts operations, Most container depots are not operational 24/7, limiting container supply to cold

stores, The sheer number of trucks carrying containers that arrive simultaneously at cold

stores lead to congestion and delays, In 2013 there have been frequent occurrences of a lack of plug-in points at DCT

and added to this frequent wind delays. Both these problems led to container trucks being delayed at DCT and therefore cannot deliver full containers to DCT, in turn preventing empty containers being collected and transported to cold stores.

Overview of Some of the Symptomatic Problems

Herewith an overview of the symptomatic problems encountered in the Durban port for the 2013 season:

8. DCT Pier 1 & 2 and Maydon Wharf vessel stacks for the receiving of containers at the terminals frequently firm in parallel causing a demand for a high volume of containers to be packed at the cold stores over a 3-4 day period. Cold stores are unable to complete the required volume of containers to be packed per vessel per stack. The inability for cold stores to load out as required causes capacity constraints, There are 12 main reefer container services from the Durban port, when stacks

open in parallel for many of these services at once, it creates operational problems. This is a weekly occurrence in Durban,

The SAECS and MSC Europe services receive up 1,000 containers a week between the two arriving vessels. Stacks for these two specific services overlap continuously thus creating a demand for a high volume of reefer containers to be packed over a 3-4 day period,

CGA initiated a teleconference between DCT and industry to try resolve these continual problems, there was no change to the status of stacks opening in parallel – a complex resolution.

Overview of Some Possible Resolutions

Herewith an overview of proposals to potentially overcome the continual logistical problems encounted in Durban:

1. Implementation of CGA Logistics and Infrastructure Proposals: Development of a Joint Planning Tool, Logistics Park and Central Control Centre for

Durban, see: CGA – Durban Integrated Transport Management System (ITMS) Proposal,

Revitalization of Maputo for citrus exports, see: CGA – Maputo Port Review 2013, Prospects for Citrus Exports,

Expand the use of rail transportation of reefer containers from the Limpopo province, see: CGA – Rail Transportation Review 2013, Prospects for Citrus Exports,

2. Request from TNPA / Transnet Property for the utilization of the old DIA site to facilitate truck staging and possibly reefer container staging,

3. Development of a cold store in Durban or the adaption of an existing cold store with the ability to meet the operational demands of containerization,

Location suitable to allow efficient access, Mobile racking for better operational efficiency meeting the demands for

containerization, A mirror image of the Coega port development – cold store and container depot

located side by side,

4. The packing and pre-staging of reefer containers prior to stacks, This permits a continuous flow of containers to be packed not limited to stack

dates, Some exporters choose to do this to ensure continuity in throughput at cold

stores,

5. Encourage Durban cold store groups to reach an agreement on possible shared slot utilization. i.e. steri capacity. This could mitigate congestion from the required DAFF inspections

Overview of Some Possible Resolutions

Herewith an overview of the proposals to potentially overcome the continual logistical problems encounted in Durban:

6. Reach out to packhouses for correctness and accuracy of consignments , sample documentation, carton labelling and packaging.

7. DAFF to assess the resource requirements in Durban to adequately meet the demands to prevent operational bottlenecks,

6. DAFF CBS RMS has extended the 4 day protocol to 6 days,

8. Work alongside DCT to implement measures to better facilitate citrus container exports through Durban,

6. DCT Pier 1 & 2 to increase plug-in capacity in accordance with the demand,6. Pier 1 increase to 1,200 plugs and Pier 2 to 1,850 plugs

7. Implement stack planning techniques to improve the throughput of reefer containers in Durban,

8. Address infrastructural, equipment and operational challenges leading to delays / gridlock in receiving citrus reefers,

9. Implement a central container loading forecast database to be issue to DCT and stakeholders daily – planning

9. Encourage producers in the northern region to pack citrus into containers at the packhouses directly and/or through central inland cold stores.

6. The EC and WC regions have been doing this for the past few years.

10. CGA to implement a central control centre to gather logistics data which can be analysed and distributed to key stakeholders.

Durban Port Statistics 2013 YTD

Durban Port Statistics 2013 YTD

Durban Port Statistics 2013 YTD

Durban Port Statistics 2013 YTD

Durban Port Statistics 2013 YTD

Durban Port Statistics 2013 YTD

Durban Port Statistics 2013 YTD

Durban Port Statistics 2013 YTDAssessing the Durban Vessel Loading Dates

Date Week Day SEAS2 SAECS FAX MIDASE MSCEM-EU MESA SAFARI MSCME MSCCS - FE ASA AMEX MSK/SAF MED O OP P

19-Aug-13 Mon 100 MSK 2 50 1 100 1 MERCURY 1

20-Aug-13 Tue CMA CGM 1 MSC 4 INVERNESS 2 BERNARD 2 2000 1

21-Aug-13 Wed TOPAZ 1 SAFMARINE 3 AGRIGENTO 4 120 2 MSC 2 A 2 1

22-Aug-13 Thu 1 NOKWANDA 3 500 4 MAERSK 1 CURITIBA 2 150 2 NWC/UK/RS

23-Aug-13 Fri EXTENSION 1 350 3 EXTENSION 4 SEBOROK 1 150 2 MSK 1 BALTIC 1

24-Aug-13 Sat MAERSK 1 EXTENSION 3 4 75 1 SUNNY 1 VILNIUS 1 HOLLYHOCK 1

25-Aug-13 Sun DUBROVNIK 1 EXTENSION 1 AMAZON 1 50 1 2500 1

26-Aug-13 Mon 100 1 JING PO HE 1 100 1 MAERSK 2 1

27-Aug-13 Tue EXTENSION 1 15 1 WEYMOUTH 2 1

28-Aug-13 Wed 1 MSC 4 NINGBO 1 250 2

29-Aug-13 Thu XIN DA 1 SAFMARINE 3 12H00 1 ATHOS 4 HS 2 EXPRESS 1 NWC/UK/RS

30-Aug-13 Fri YANG ZHOU 1 NOMAZWE 3 700 4 HAYDN 2 50 1 NWC/UK/RS TASMAN 1

31-Aug-13 Sat 100 1 400 3 120 2 MSK DUTY DEADLINE ICE 1 MERMAID 1

01-Sep-13 Sun EXTENSION 3 SELETAR VICTORIA 2 RUNNER 1 2500 1

02-Sep-13 Mon CAP 1 3 ITAL 1 75 1 PRAHA 2 250 2 2500 1 1

03-Sep-13 Tue JACKSON 1 FLORIDA 1 MSC 4 150 2 50 2 1 MED 1

04-Sep-13 Wed 100 1 15 1 ANTALYA 4 SAGITTA 2 BROTONNE 1 1 DUTY DEADLINE GREEN 1

05-Sep-13 Thu 700 4 120 2 BRIDGE 1 MYTILINI 1 HONDURAS 1

06-Sep-13 Fri CAP 1 MAERSK 3 2 MSC 1 100 1 MAERSK 2 2500 1

07-Sep-13 Sat SAN MARCO 1 GATESHEAD 3 ITAL 1 MAERSK 1 JOANNA 1 VISBY 2 NWC/UK/RS

08-Sep-13 Sun 100 1 400 3 FORTUNA 1 SENANG 1 100 1 ICE 1

09-Sep-13 Mon EXT 1 EXT 3 15 1 75 1 GLACIER 1

10-Sep-13 Tue MALLECO 1 DUTY DEADLINE EXXT 1 2500 1

11-Sep-13 Wed 100 1 DAL 3 DUTY DEADLINE BUXTAURUS 2 CAMILLA 2 1

12-Sep-13 Thu 12H00 1 STELLENBOSCH 3 BELGICA 1 MSC 4 150 2 KOTA 1 50 2 1

13-Sep-13 Fri 300 3 LUOBAHE 1 30 1 METHONI 4 2 MSC 1 LAHIR 1 2

14-Sep-13 Sat DUTY DEADLINE 15 1 ER 1 500 4 MAERSK 2 LUCIANA 1 12H00 1 MSC 1 CLAIRE A 2

15-Sep-13 Sun 1 ELSLETH 1 DUTY DEADLINE INNOSHIMA 2 CMA CGM 1 150 1 ROSARIA 1 150 2

16-Sep-13 Mon CSCL 1 30 MSC 2 150 2 BAUDELAIRE 1 50 1 2 RS

17-Sep-13 Tue OCEANIA 1 MOL 1 SUSANNA 2 75 1 50 TAMA 1

18-Sep-13 Wed 1 CULLINAN 1 200 2 HS 2 BUDAPEST 1 RS HOPE 1

19-Sep-13 Thu 1 DEBUSSY 2 MAERSK 1 PORTUGAL 2 BRIDGE 1 BALTIC 1 1

20-Sep-13 Fri CONSTANTINA 1 150 2 SEMBAWANG 1 150 2 MSC 1 KOTA 2 JASMINE 1

21-Sep-13 Sat 1 ANTONIO 1 100 1 2 IVANA 1 LIHAT 1 RICKMERS 2 1

22-Sep-13 Sun 1 SCHULTE 1 150 1 50 1 MALAYSIA 2

38

36

37

35

34

Maydon WharfFPT

(Units = Pallets)Pier 2 Units =

(FEU's)Pier 1 (Units

= FEU's)

ESTIMATING THAT 1,000 CITRUS REEFERS WERE STACKED T PIER 2

Durban Port Statistics 2013 YTD