The perishable industry within the African Continent is experiencing challenges in both the marketing and logistical value chain as a result of the disruptions caused by the COVID-19 pandemic. At the beginning of July, the African Continent had reported 478,467 confirmed positive COVID-19 cases, with the countries most impacted countries being South Africa (SA) and Egypt representing almost 41% and 15% of COVID-19 positive cases respectively.
The South African perishable industry reported increased productions in most of the fruit types and grain commodities. The increased productions combined with good quality and phytosanitary standards has positively impacted both local market and export supply chains. However, the disruptions caused by COVID-19 throughout the value chain negatively impacted the industry.
Within SA, many businesses were terminated during the national lock down due to the inability to sustain and afford business ventures. This had resulted in increased numbers of unemployment, thus leaving many households in a state of helplessness.
Most SA airports were placed on lockdown resulting in no exports through these hubs. The only airport within SA permitted to operate international flights is OR Tambo International Airport in Gauteng. The South African flower industries are in dire straits due to market closure and limited international flights. The main South African export market to Netherlands, flowers, was closed and reports indicate that this market is dumping their flowers. It has been reported that perishable airfreights have reduced by 40% and flowers by 60% across the globe.
Global trade is being slowed down by the sluggish recovery of China’s logistics sector from the pandemic. The initial build-up of containers at the Chinese ports has created logistical problems around the world, such as the availability of refrigerated containers used in sea freight, being drastically reduced. Within SA, the shipping lines had reported extremely low levels of refrigerated container stocks, which had a negative impact on agricultural and perishable exports. This problem was compounded by the growing number of staff at container depots testing positive for COVID-19 which further negatively impacted operations.
The South African seaports had remained operational during the pandemic. However, their human resources were negatively impacted resulting in low productivity and many hours of down time. One of the major container terminals in SA had reported that approximately 50% of staff were absent from work due to the pandemic. This had resulted in delays in vessels within SA and shipping lines adding a congestion surcharge to container shipments, further adding costs to the industry.
However, there have been some positives from the crisis:
- A decrease in silo mentality within operations between all sectors, including Government and private industries.
- An improvement in agility within organisations and re-purposing of operational and business models.
- Business has conducted strategy reset exercises and reviewed growth and innovation platforms to be open to diversification, especially within the perishable industries
- Business unusual prevails and the industries are now working in close collaboration
- Working from home has become the latest trend within SA and many countries
- Communication and information sharing drastically improved
- An urgent drive to digitalise processes
Posted on August 5, 2020
by Vjan Chetty