STATE-OWNED freight company Transnet is under fire from the Citrus Growers Association for shipping delays that are threatening fruit exports.
According to the Durban-based association’s website, logistics development manager Mitchell Brooke flagged Transnet as the biggest threat to the fruit export industry.
Brooke said in a letter last month that the poor state of Transnet’s operations is seriously compromising the South African agriculture and manufacturing industries and is a huge threat to the local economy.
“Operations at the port authority and terminals division have declined so severely that we are now witnessing massive delays to ships calling across the South African ports.
“Notwithstanding the disruptions from the Covid pandemic in 2020, the recent KZN looting and the cyberattack on Transnet’s IT systems in July, the present issues go way beyond that. We now know that Transnet has been the subject of mass corruption as a result of state capture,” said Brooke.
He said businesses were losing millions of rands as manufacturing and production plants have had to stop due to the backlog in the supply of components – notwithstanding the losses the fruit export industry is facing as a result of the additional cost of logistics and quality compromised due to high dwell times.
“Transnet have conceded they are broke and do not have enough capital (or access to capital) to inject into the business to sustain its operations.
“During the period of state capture, capital that should have been allocated to procure or replace items such as tugboats, pilot boats, helicopters, ship-to-shore cranes, mobile harbour cranes, straddle carriers, rubber tyre gantry cranes, reach stackers and hauliers disappeared.
“Maintenance and mid-life refurbishment of the current fleet of machinery and equipment in the ports was mostly ignored.”
Speaking during the 2021 Joburg Indaba, Transnet chief executive Portia Derby said this week that the utility was working with the agricultural and automotive sector to turn things around. Derby conceded that the entity had serious challenges that persisted.
“We have a problem of the chip supply shortage which affects autos and also directly affects us.
“The issue of container vessels between the US and China, in particular, means there are a few vessels to come down south. The hacking incidents and the looting have also not helped in terms of logistics,” Derby said.
The mining industry has also felt the pinch due to underperforming Transnet. According to the SA 2021 Mine annual survey released this week by auditing company PricewaterhouseCoopers (PwC), chronic difficulties, particularly on Transnet’s coal rail line from Limpopo and Mpumalanga operations to the Richards Bay Coal Terminal (RBCT), have crippled exports of coal and other commodities at a time when global commodity prices are booming.
The report said coal exports through the RBCT dropped to 70.2 million tons last year from 72.2 million tons in 2019.
Exxaro Resources, for example, expected to see a reduction in export volumes by 2 million tons, resulting in a revenue loss of several billion rands.
In terms of iron ore, the report said Transnet was currently working to refurbish the iron-ore export line so that trains could travel at a higher average speed than the current 30km/h.
Improvement to this line, with regular maintenance, could take the average speed to the permitted 60km/h and could provide a 10 percent improvement, or an additional 6 million tons a year, the report said.
Owing to Transnet’s underperformance, many mines have been forced to investigate road-based logistics solutions.
“As a result, more than 323 million tons were transported by road between January and June 2021 compared to just 90 million tons by rail,” the PwC report said.
BUSINESS REPORT ONLINE