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Freight cost increase raises major concerns in South Africa

Increases in freight costs are raising eyebrows in South Africa. In particular, these costs are going to pose a significant problem for the entire fruit industry,  especially grapes, whose export season starts in November. Container freight rates are expected to increase by 30% to 40%. Blueberries and stone fruits might see a similar increase.

The perception is created that the companies are trying to maximize their profits after the Covid-19 interruptions. Paul Hardman, Citrus Growers’ Association (CGA): “Freight rates have risen by 40% since 2020 The industry expects that there will be further increases of between 50% and 75% in 2022. If the costs of transporting the fruit exceed the yield on the farm, the possibility of in exporting certain markets has been challenged.”

The export volumes are not yet affected, but effects on the target countries are to be feared. “The costs of labor, packaging material and logistics are increasing exponentially. It is important that our customers understand the real cost of making a high quality grape box. Producers, exporters and end customers need to team up to ensure that sales prices take account of these rising costs. Only in this way can we continue to operate successfully in the future,“ says Brett Gosling, Chairman of the Northern Transvaal Table Grape Association.

Source: agrotexglobal.com


Photo source: Dreamstime.com


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