MAPUTO PORT REVIEW 2013Prospects for Citrus Exports

Outline: the Maputo Citrus Corridor, extending from Swaziland, Onderberg, Nelspruit, Karino, Hoedspruit to Letsitele produces and exports 0.6 million tons of citrus annually. 90% of which is currently being transported on average an additional 460km’s to the Durban port for export...

1 of 4 Strategic Logistics

and Infrastructure Projects as

Proposed by:

Background From the onset of the 2007 citrus season, citrus produced in the northern regions; which geographically would naturally be routed out of the Maputo port, the majority of which has been diverted to the Durban port for export. During the 2013 citrus season, in which there has been a 10% increase in citrus production from the northern areas, has seen a severe decline in volumes being routed through Maputo. The main reasons for the diversion of citrus away from Maputo to Durban is seen to be the following : The withdrawal of break-bulk shipments from SA to the Middle East, at present

the majority shipped in containers from Durban, A dramatic swing of exports to Europe, UK, Mediterranean and Russia in

Specialized Reefer vessels, to containerized shipments from Durban port, A vast differential in Freight costs favouring containerized shipments from

Durban where services are not presently offered in Maputo, The transportation cost differential between transporting to Maputo and

Durban is not in accordance to the geographical location of the port relative to production. In most cases producers can transport to Durban at a lower cost base than Maputo,

With the advent of selective market access from Maputo, risk exposure is greater when transiting Maputo without sufficient market diversion opportunities (shipping),

The withdrawal of the VSA between NYKCool and Seatrade on the Europe and UK trade,

The DAFF CBS Risk Management System induces cold chain protocols to Europe, thus increasing risk exposure (Phytos) where there is limited cold store capacity in Maputo,

Limitation of containerized shipping services from Maputo to key citrus markets.

MAPUTO PORT REVIEW 2013Prospects for Specialized Reefer Ship

Operators

Outline: the Maputo Citrus Corridor, geographically favouring Maputo, should by nature be capitalizing on Maputo as the preferred port for exports. The Specialized Reefer Ship operators should be capitalizing on the competitive advantage in servicing this port for citrus exports, in lieu of increasing competition from container lines...

Durban and Maputo Export Volume by Mode

SRS market share declining rapidly

Durban and Maputo Export Volume by Market

SRS Growth Potential

Note containerization volume increase from Durban to Northern Europe, UK, Russia and Southern Europe...

Maputo Citrus Corridor Annual Production

Weekly production of citrus from the Maputo Citrus Corridor is the

equivalent of 5 SRS vessels worth.......

Why then is it not possible to achieve 1 full and completely

loaded SRS vessel (incl. On deck containers) in Maputo per

week........

(Week 18 – 38)

Includes: Swaziland, Onderberg, Karino, Nelspruit, Hazeyview, Hoedspruit and Letsitele.

Strategic Partnerships to Achieve Synergies

Synergy = The interaction of two or more agents or

forces so that their combined effect is greater than the

sum of their individual effects

Facilitation ProcessMediationCoordination

InfrastructureTransportCoordination

Dedicated Shipping Service

Equipment 360 Quality

SRS lines partnership is strategically important to

provide a dedicated shipping service to Maputo

Denotes Producers &

Exporters

Packhouse to Market Transit Summary

Comparison of shipping Break-bulk ex Maputo vs. Containers ex Durban

Notes:1. The updated schedule takes into account the

merger of the Maersk Med feeder service to the SAECS service,

2. The data suggests the lead time to Europe could potentially be 10 days less by way of SRS shipping from Maputo,

3. The data suggests the lead time to Russia could potentially be 14 days less by way of SRS shipping from Maputo.

4. Considers a dedicated SRS service from Maputo.

EUR Logistics Costs Comparative Summary

Comparison of shipping Break-bulk ex Maputo vs. Containers ex Durban

Notes:1. SRS – Maputo (1)

takes into account a possible USD15 SRS Freight reduction and R100 reduction for ambient loading,

2. Costs must always be calculated using carton values to take into account “High Cube’ pallet ratios.

Co-loading cargo for Northern Europe, UK and Russia, 1 VSA vessel per week between week 18 – 38 loaded full and complete, Under deck: ~5,000 plts p.w x 20 weeks = 100,000 pallets p.a. On-deck containers: ~50 FEU containers p.w x 20 weeks = 1,000 FEU containers p.a = 20,000

pallets p.a. Total pallets = 120,000 pallets p.a.

Service Maputo as a single port and service Durban , PE and Cape Town ports independently,

Proposing a possible USD15 per pallet reduction in SRS EU Freight Rate to equalize the total EUR logistics cost, based on a full load from Maputo,

The SRS freight rate is severely disproportionate to compete in the total cost chain, SRS EU All-in = ~USD288 per. std eq. plt. Container EU All-in = ~USD5,700/FEU = USD248 per. std eq. plt. Differential of ~USD40 per.plt.

Growers can potentially capitalize on lower transport costs, Growers can potentially capitalize on ambient loading rates, Growers can be incentivized by lower transit times to markets, Lines market the 360 Quality assurance, Product damage and/or waste development is a severe problem (Durban).

Lines capitalize on a dedicated service to Maputo for sustainability, Combat the threat from containerization into Europe, UK and Russia, It is not foreseen that SAECS and MSC will penetrate Maputo

It’s a Win - Win for all stakeholders....

Proposed SRS Reefer Alliance / VSA Offering

MAPUTO PORT REVIEW 2013Prospects for Containerization

Outline: the Maputo Citrus Corridor, geographically favouring Maputo, should by nature be capitalizing on Maputo as the preferred port for exports. The average distance from Maputo to the hinterland should create an opportunity to transport reefer containers directly to packhouses for citrus to be packed and delivered back to the port for export. Alternatively containers can be packed in the Maputo port....

Proposed Containerized Offering in Maputo

1. The SRS vessels are by and large equipped to load a number of FEU reefer containers on-deck,

Containers can potentially be packed for Europe, UK and Russian receivers on the Reefer Alliance / VSA.

2. CMA CGM offer a weekly transhipment service MOZEX ex Maputo via: Port Kelang to Middle East on a ~45 day service and Port Kelang to Far East on a ~25

day service.3. Maersk Lines / Safmarine offer a weekly transhipment service M Express ex

Maputo via: Port Louis to Middle East on a ~33 day service and Tanjung Pelepas to Far East on a

~43 day service.4. Ignazio Messina offer a fortnightly direct service ex Maputo to:

Middle East on a ~20 day service and Mediterranean on a ~28 day service. Containers can potentially be received and serviced at MCT (FPT) and/or DP

World facilities, Containers can potentially be transported cross-border into the hinterland to

be packed directly at packhouses, Containers can potentially be staged at MCT (FPT) and/or DP World facilities

and loaded SRS on-deck post under-deck completion or on conventional container line vessels,

Growers can capitalize on lower logistics costs, Growers can capitalize on potential ambient packhouse loading in containers,

Eliminating port cold store and/or ambient stuffing costs. Use of light weight skeletal trailers to transport citrus reefer containers cross-

border, Many growers across the Northern region are already doing this and gaining

momentum. Growers can be incentivized by lower transit times to markets.

1. Quayside loading and ambient storage facility for 2,000 pallets (Under-deck cargo for the potential VSA service),

2. Fully equipped and PPECB approved reefer container depot, Wash, pre-trip, calibration and plug-in points for >100+ FEU reefer

containers.3. Cold storage facility at Matola Cargo Terminal (MCT) for 2,500

pallets and ambient storage for 500 pallets, Sufficient container stuffing bays, Approved PPECB and DAFF inspection facilities.

Proposed (MCT) FPT Offering in Maputo

1 3

2

Durban port is over utilized creating severe bottlenecks, congestion and inefficiency leading to losses – citrus diversion to Maputo is essential for the northern region,

Landside and Seafreight transport costs are escalating at an alarming rate, Maputo can potentially reduce or stabilize transport costs,

The future of the Maputo port is hinged on a strategic and sustainable partnership between producers, exporters, FPT and the Reefer Alliance / VSA to service the port ,

The SRS lines should see Maputo as a strategy against the rising threat of containerization.

A dedicated SRS VSA to Maputo is highly attainable (incentivized by a reduced freight rate),

The SRS on-deck container service is yet to be explored in Maputo, the potential is plausible with a fully serviced reefer container depot at Matola Cargo Terminal (FPT),

Investment (FPT and partners) in Maputo is essential to re-vitalize the port infrastructure – cold storage, reefer container stuffing bays and container depot,

Access to markets i.e. Northern Europe, UK, Russia, Middle East and Far East would be attainable from Maputo (SRS service and Containerization),

Ambient SRS loading in port and/or port or cross-border packhouse ambient container stuffing are avenues that can potentially reduce the cost chain (many growers are already on the band wagon),

Cross-border access and entry at Komatipoort is presently being improved. Maputo Citrus Corridor growers must act decisively now, or risk losing it for

good!

Factors to be Considered

The Maputo Port offers growers of the Maputo Citrus Corridor the opportunity to

- improve logistics costs, improve cold chain integrity, increase efficiency and

reduce transit time to key citrus markets...

Enabling a more sustainable, efficient and effective Citrus Supply Chain through the development and implementation of strategic

projects...

MAPUTO PORT REVIEW 2013Prospects for Citrus Exports