South African supply chain needs to help fruit growers cover costs
Retailers need to realize the days of making a 20-30% guaranteed mark-up are no longer sustainable, South African fruit growers claimed at the inaugural Cool Logistics Africa Conference last week.
Delegates heard that with 38-40 service providers in the export supply chain, there simply wasn't enough money to go around.
Grower returns are currently not covering costs and last year the South African container industry reported ZAR6 billion (US$770.7 million) in losses.
Citrus Growers Association (CGA) chief executive Justin Chadwick, said deflated fruit sales returns, escalating production costs and inefficiency at port level was threatening the country's fruit industry.
"The goose that is laying the golden egg, and sustaining the 40 service providers is on its last legs. Without product everybody is out of business."
But he described South Africans as "innovative" and able to find solutions.
"There are huge challenges in the logistics field, but plans are being made and business will continue. People in the fruit industry have a passion for their business which drives the industry thought adversity. And there seems to be a genuine interest in how their decisions impact on the primary producer."
Transnet National Ports Authority chief executive Tu Morwe, also spoke and assured delegates there would not be a repeat of 2010's port strike and associated cargo losses of more than ZAR100 million (US$12.8 million).
Chadwick said one of the main themes which came out of the conference was the need for the industry to share information, plans and work together.