Local food companies are “fighting a war on multiple fronts” as the impacts of crumbling infrastructure, power outages and soaring input costs weigh on food prices and threaten food safety, warns import-export business Hume International.
Based in Port Elizabeth, Hume International is a local leader in the importation and distribution of frozen foods and other food products, importing over 180 million kilograms of food from five continents in 2021 alone. Founder and MD Fred Hume notes, however, that the past few years have been some of the most challenging in the business 25-year history.
“Supply chain management within the food industry is a highly complex, intricate process at the best of times, which requires meticulous attention to detail to ensure that we source the best quality of food at the right price that arrives at the right time for clients,” he says.
“But on top of global challenges such as rising food prices, fuel price hikes and soaring shipping costs, which are impacting purchase prices, we’re also grappling with unique local challenges such as load shedding, congestion at ports and deteriorating road and rail infrastructure, which are causing major transportation delays.”
Dilapidated rail networks have seen a growing number of companies turn to congested and overburdened roads for freight transportation over the past decade. For example, Statistics South Africa figures show that in April 2012, 17.1 million tonnes of freight were transported by rail and 37.9 million tonnes by road. In April 2022, 14.5 million tonnes of freight were transported by rail and 58.9 million tonnes by road – a leap of more than 50%.
More recently, the estimated R7 billion in damage to infrastructure in the Port of Durban caused by the April and May floods has had a knock-on effect on other ports over the past three months, further aggravating logistical issues and delays at several local harbours. And these delays have only been exacerbated by ongoing load shedding and the loss of traffic lights throughout the country.
In total, transportation delays are currently forcing companies to store food at cold store facilities on average seven to ten days longer at a cost of around R5,000 to R6,000 per day per container. These then amount to millions in added expenses for companies, adding a few rand extra to each and every item of food for consumers, explains Hume.
“This is particularly worrisome at a time when higher fuel and food expenses globally are already driving up prices,” he says.
Strain on cold stores
Beyond their impact on transportation delays, power outages are also a source of major concern for temperature controls and food safety, with more than 1,246 hours of loadshedding in 2022 so far alone.
With cold stores operating at peak while awaiting freight transportation, numerous facilities are being forced to continuously run diesel generators to prevent any interruptions to cold chains as a result of load shedding, adding another layer of costs to supply chains.
Notably, Hume International subsidiary company Ziqenye Food Services is home to the only meat, poultry and seafood import and export-approved commercial cold store facility in the Eastern Cape.
In response to the threat of power outages, the company has invested some R2.5 million over the past six years towards installing solar power at its cold store, ensuring that long-term stock is stored safely below -17°C, while packaging and sampling facilities for microbiological testing is maintained beneath 10°C. Likewise, it has upgraded its advanced software systems for added layers of food safety, introducing capabilities such as enhanced traceability and the automatic monitoring of upcoming product expiry dates.
“We are fortunate to have been in the position to make this type of investment already, but a lot of other cold stores around the country are coming under enormous strain as riots, flood damage, and now load shedding hit profitability,” says Hume.
“The situation is dire, and in the interest of food security, government urgently needs to act to solve infrastructure troubles and the issues at Eskom as soon as possible.”