What does the fruit export process look like today and how has it changed over time?
When transporting your fresh fruits to any part of the world, it is important to know how these processes have changed over time and how to deal with the changes. Although the sector is relatively informal, the expectations of buyers are high and the export process must be done with precision. To make sure you export your fruits safely, many steps are followed and as time changes the processes also change.
To make sure that your product reaches its final destination in a good condition, pay extra attention to how to manage risk, especially with the use of technological tools.
We recently had a CargoRant Podcast with a seasoned risk expert in the fruit business. – Antonella Da Cunha – CRM Prof is an independent Risk Advisor and consults at Capespan and various other global companies in the Fruit, Logistics, Farming and Insurance sectors.
Antonella Da Cunha said at first, vessels were the only form of transportation and you could export just about 5,000 pallets at any one time because there was no containerization. There were just one or two ports of loading and one or two ports of discharge. She added.
“It was so low, storage limits were enormous. For example, storage limits of 20,000 to 25,000 pallets in Durban and Cape Town were built and the supply of seasoned products was always done. It was Eurocentric, particularly with the US coming second and slowly”
How the fruit exporting process changed.
In the early ‘90s and the early 2000s, the east was not a big market. It’s now a huge market. It was mostly Eurocentric and the US. Those were the private predominant markets. Then came containerization, then came deregulation, then came an option for a door to door as we know it today.
“So instead of managing 5,000 pallets on any one vessel, you were managing 3000 or 300 or 200 containers on any one vessel, which in those days, a lot of people would say it’s like managing 200 vessels because it’s become documentation for 200 containers, customers for 200 containers, and logistics of 200 containers,” she said.
This was the biggest change because exporters were trying to do things the old way in a new way and then it became an open market because suddenly you were competing with the fruit from Peru, as well as your next-door neighbour who was exporting the same grapes from the same area to the same customer at the same time.
After a few decades, everybody had learned how to export and the relationships involve because obviously, you’re exporting a living product. So you need to know:
- The relationship with your buyer.
- The technicalities around the shipping process.
- Governance around the fruit trade.
- What happens with day-to-day plants?
- What happens with refrigeration breakdowns?
- How Marine Insurance functions.
- Did your buyer have the right Marine Insurance?
So all of these things after 10 years, everybody learned them, and then suddenly it was an equal playing field.
The changes depend on those managing the trading process. If you have;
- A technical person
- The sales relationship person
- The insurance person
- The risk person
- The finance person
Then you will survive the changed process and overcome a majority of the risks involved. If you don’t have these trading experts managing your export process, you will make mistakes like all other businesses.
The fruit trade isn’t a copy-paste business. It took, as long as a decade, farmers were scared to export and export agents did not come easily. Those that started coming in were new and had to learn the ropes. So, a lot of people lost a lot of money over a long time. The correction in the market in terms of adapting, as we called it probably only came in about 2009, 2010.
It takes a while to get into the group to know what solution you have and how the market functions. What worked last year might not work this year. If the price in the market was great last year, this year it might not be great. If your customers paid you last year, maybe this year, they won’t pay, which is another added risk. So this is how the fruit export process changed over time.
When transporting your fresh fruits to any part of the world, it is important to understand how the fruit export process look like today and how it changed over time. This will help in managing your export process.