Business Pleads with Government to Unlock Trade at Eastern Cape Ports

By: Home International on 01 November 2022

Business Pleads with Government to Unlock Trade at Eastern Cape Ports

The Department of Agriculture, Land Reform and Rural Development (DALRRD) urgently needs to appoint more state veterinary inspectors in Gqeberha or grant businesses’ request for a special concession.

This is according to Hume International, who warns that administrative restrictions on the number of shipping containers that food distributors can import or export are driving up prices, causing supply chain blockages, and strangling trade and economic development in the Eastern Cape. But despite calling for a concession since May this year, the company’s pleas have fallen on deaf ears.

Fred Hume, the Managing Director of Hume International, notes that unlike businesses in other regions such as Durban or Cape Town, companies that deal with frozen meat and dairy products in Gqeberha are limited to a set number of imports and exports per day.

“Rules unique to Gqeberha mean that the state veterinary inspector must be present when unpacking or packing containers with animal-based products. But each company is only allocated one visitation per day, which means that the number of containers that meat distributors in the area can import or export is limited to their number of loading bays – in our case seven,” he explains.

“By contrast, Durban and Cape Town do not require state inspectors to be present at the time of unpacking, and businesses can perform multiple unpacks on each loading bay every day.”

Figures from the Eastern Cape Socio-Economic Consultative Council reveal that trade remains the third most important sector in the Eastern Cape, accounting for 17.1% of provincial gross value added (GVA) in the second quarter of 2022.

However, despite the April floods which impacted operations at the Durban port, the province’s trade sector contracted as much as R1.1 billion between the end of March and July, signalling businesses’ inability to benefit from heightened demand for imports and exports at the port.

“We would simply invest in expanding our cold storage facilities and building new loading bays in the area, but this requires DALRRD approval first to secure the necessary inspection services. And the department seems reluctant to grant any businesses this approval, as despite their claims to the contrary, they only seem to have sufficient capacity for current needs – not for any business growth or expansion,” he adds.

For example, Hume International had planned to invest in expanding its cold storage facilities in 2021, and had even purchased the necessary land, but shelved the project when it became clear that the company would not be able to obtain additional inspection services.

In addition to curtailing investments, the result of local trade restrictions is that despite high global oil prices, many food distributors are being forced to offload meat products in Durban and send these products via road to Gqeberha at considerable expense to keep production lines running smoothly, driving up prices. Likewise, meat exporters in East London send their products to Durban for shipping rather than the nearby Port of Coega or Port Elizabeth harbours – even as Durban experiences additional backlogs in the wake of the recent Transnet strike.  

“The solution is simple – the department either needs to appoint more state veterinary inspectors to Gqeberha, or if the issue is financial constraints, then grant a concession to businesses in the area.

“This concession would allow us to pay for an assignee to perform the necessary inspectorate services ourselves, who would then simply report to the department. There is precedent for this type of concession, as the department granted temporary approval for this arrangement during the July riots in 2021,” he says.

“The benefits would be considerable, reducing transportation expenses on food prices while significantly improving supply chain efficiency within the province. It would also encourage local investment, and stimulate a range of secondary activities such as port haulage and cold stores.”