Durban Integrated Citrus Transport Management System (ITMS)

1. Durban Integrated Citrus Transport Management System (ITMS) Objective: to develop a proactive and systematic approach to managing Citrus Supply Chain functionality in the Durban port, primarily to address transport, cold store capacity constraints and operational challenges. To achieve a more efficient and effective environment... 1 of 4 Strategic Logistics and Infrastructure Projects as Proposed by:

2. Background Since deregulation of the citrus industry, a number of changes have taken place in the citrus supply chain, the most dramatic being: • A significant change in landside transport from rail to road transport, • A dramatic swing from exports in Specialized Reefer vessels, to containerized shipments, • A vast increase in citrus export volume, • Fragmentation of the Supply Chain from a single channel (Outspan Int.) to multi channel, and • Progression from transporting citrus to ports and stuffing containers (3 phase) to stuffing containers directly at packhouses (2 phase) or inland cold stores - progressively in the Eastern and Western Cape >70% of product. These developments has resulted in huge bottlenecks specifically in the Durban port during peak season, and given rise to perceptions that the ports and cold stores are inefficient and ineffective. It is with this in mind that the CGA has embarked on an initiative to facilitate discussions with all stakeholders to find and agree on processes that will not only result in a proactive approach to supply chain management, but importantly, is aimed at creating better efficiency and effectiveness, optimising resources and infrastructure utilization and reducing costs.

3. Durban Citrus Supply Chain Challenges • 60% of total annual production is exported through Durban totalling ~800,000 pallets packed by ~165 packhouses delivered to 8 main cold stores in Durban that receive, store and export citrus. This is transported to port on ~35,000 road trucks annually. • There are ~40,000 pallets packed and transported to Durban on some ~1,500 road trucks per week in peak season (~350 per day), • There are ~2,000 export reefer containers collected from empty depots, packed at cold stores and delivered into port stacks per week in peak season. Container haulage in Durban is not controlled centrally as is the bulk exports e.g. FPT planners, • All Durban cold stores are located in busy industrial zones where access is largely obstructed, this restricts inbound and outbound traffic flows and causes severe congestion (FPT is the only facility that stage inbound road trucks out of port), • In peak season cold store capacity is generally oversubscribed and the DAFF phyto inspection process constrains the intake areas, both causing bottlenecks, • The volume of container packing in 2013 has been a major challenge for most of the Durban cold stores. High Cube pallets, fixed racking and pre-staging specific container orders constrains the free flow of pallets in and out of the facilities, • DCT’s (Pier 1, Pier 2 and MW) container stack planning causes demand peaks in a space of 3-4 days each week, 1) cold stores cannot meet the volume demand, and 2) creates artificial congestion in Durban. Weather, plug-in capacity etc can disrupt exports, • There is generally little or no coordination between the major logistics stakeholder groups to effectively manage the citrus Supply Chain in Durban (Packhouses, Transporters, Cold Stores, Exporters, Container Hauliers, Empty Depots, Shipping Lines, DCT’s, PPECB etc)

4. Durban Citrus ITMS Development Proposals The ITMS project proposal encompasses the following developments that are thought to address these challenges: • A Centralized Web Based Joint Planning Tool (JPT): this will provide an interface platform amongst logistics stakeholders to facilitate the integration of information flow internally and externally between them. This will be especially relevant for but not limited to, 1) inbound farm truck booking and staging, 2) transport management for direct SRS shipping, 3) cold store operations, capacity and resource planning and monitoring, 4) planning and monitoring haulage of reefer containers, and 5) Shipment bookings and processing. This will enhance Supply Chain functionality by inducing a state of proactive planning, management and monitoring of key Supply Chain functions through the export process. • A Central Facilitation and Control Centre (Citcom Centre): the Citrus Transport and Container Management Centre, will provide a 24-hr common-user facility in the Durban port to be used when necessary for 1) staging inbound farm trucks destined for receiving facilities, 2) staging and routing trucks for direct to ship ambient loading, 3) a dedicated reefer wash, pre-trip, inspection, calibration and pre-staging area designated to reefer containers ,4) and ambient packing facility, and 5) a reefer container port rail terminal or hub. It must be noted that in order to create a continuous flow of exports through the port and to eliminate the restriction of packing containers relative to DCT vessel stacks (firmed), the reefer park will permit containers to be packed and staged prior to stacks to allow the continual unrestricted flow of product through the port. • A Central Citrus Control Centre (C4): a 24-hr manned desk to centralize and integrate all logistical data and information necessary to evaluate and identify logistical constraints. This will be especially relevant for but not limited to, consolidating, evaluating and disseminating 1) inbound truck bookings, 2) cold store container packing plans, 3) evaluating port container stack adjustments, 4) PPECB weekly export data, and 5) port stock data.

5. Project Overview – 2 Platforms 2) CITCOM Centre: • Inbound farm truck staging area. • Direct to vessel truck staging and consignment capture. • Reefer Container Park for washing, pre-trip and pre-staging. • Reefer rail terminal / hub • 5. Ambient packing facility • 1) Web based JPT (multi platform): • Facilitation of information flows between all stakeholder groups. • Reports information to stakeholders • Provides a proactive systematic Supply Chain planning and monitoring mechanism. • 4. Facilitates export booking processing. Citrus Supply Chain Main Stakeholder Groups

6. The Durban Citrus ITMS System Functions ITMS will be a web based JPT system that can provide: An internal planning, monitoring and reporting function for citrus stakeholders. The JPT can provide an interface platform amongst logistics stakeholders to facilitate the integration of information flow between them. Manage and monitor inbound truck bookings. It will provide a live database on all citrus truck positions and record throughput times. Creates a planning tool for vessel despatches between loading terminal and cold stores. Manages and monitors container haulage bookings between exporters, cold stores and hauliers.

7. The CITCOM Centre Functions CITCOM Centre will incorporate a large truck staging area that can be used to stage inbound citrus trucks. Removes congestion at facility front gate. Trucks routed to facilities based on restrictive flows. First intake capture done prior to truck arriving at facilities. Regulates booked and unbooked deliveries. Avoids transporters obtaining fines. Truck drivers have access to better facilities. 1

8. The CITCOM Centre Functions CITCOM Centre will incorporate a large truck staging area that can be used to stage citrus trucks that are targeted to deliver direct to ships. Consignment capture prior to routing to ship. It will officiate the enhancement of ambient loading on SRS break-bulk vessels . It will provide a live tracking mechanism to monitor the positioning of trucks targeted for ships on a JIT basis. 2

9. The CITCOM Centre Functions CITCOM Centre provides an empty reefer depot for peak citrus periods and a plug-in depot to enhance pre-stack packing of citrus containers in peak season. Wash, pre-trip, inspection and storage. Pre-staging of containers prior to stacks. Enhances the ability to pack containers on a 7 day window rather than during stack dates. Steri shipment pre-staging for stabilization. 3

10. The CITCOM Centre Functions CITCOM Centre provides better functionality for reefer container trains: Collection and drop off of reefer containers for container trains, Train turnaround times improved, Pre-staging of reefer containers, Containers delivered into DCT by road during stack times, Rail hub to hub concept. 4

11. The CITCOM Centre Functions CITCOM Centre provides a PPECB approved ambient storage and container packing facility: Consolidation of ambient stores in Durban, Multi use for various exporters, agents or service providers, Full service facility, Better efficiency as reefer containers will be on hand, Plug-in points on hand means containers can be packed pre-stack. 5

12. Consultation Process • Objective: To conduct a needs and benefit analyses with citrus industry stakeholders to establish the viability of and development areas for the Joint Planning Tool (JPT), Citcom Centre and C4 proposals. Identify specific development areas to enhance internal and external logistics functionality. • Outcome: To draft a comprehensive report highlighting the discussions and feedback from stakeholders and propose a suitable way forward for identified the projects. Propose a suitable platform in which stakeholders can operate without compromising the commercial and competitive parameters, and indicate possible funding mechanisms such as, sponsorships, JV’s or commercial contracts.

13. Conclusions • Durban requires a central truck staging area to restrict, process and control all Durban truck arrivals – permanent site, • Durban requires a centralized dedicated reefer container depot to provide better integrity on empty container supply, • Durban requires a better equipped full service cold store (containers), • The Durban environment requires a Joint Planning Tool (JPT) and Citrus Central Control Centre (C4) to effectively plan, monitor and communicate citrus flows within the port, • The perception is that the onus is on the Durban cold store groups to engage in developing the JPT, logistics park and central control centre C4, • The Durban cold store groups should consider a shared logistics planning, infrastructure and capacity utilization agreement (seen to increase efficiency and capacity utilization). This is seen as paramount to ensure capacity utilization is adequately utilized, • Transnet (TNPA & TPT) are required to play an integral part in the Durban citrus supply chain, • A collective funding mechanism is necessary to implement the proposals.

14. The Durban ITMS Proposal If implemented, this will be the most progressive development in the citrus supply chain past the farm gate, since deregulation. Without which, the Durban Citrus Supply Chain will not function optimally... Enabling a more sustainable, efficient and effective Citrus Supply Chain through the development and implementation of strategic projects... A proposal by: