CHEP Desert Sun Trade Case Study
CHEP helps cut costs, improve quality and open new markets
Who is Desert Sun Trade?
Desert Sun Trade is the sister company of the African Food Company (TAFC) and acts as the farm’s marketing arm. TAFC is an environmentally sustainable, socially responsible banana plantation in Mozambique. The farm was established in 2010 to meet demand for premium organic bananas and uplift the local community through job creation, skills training and new technology.
Desert Sun Trade markets sells their organic bananas in South Africa, with plans to expand exports and opportunities. Their bananas are certified organic by BCS Öko-Garantie*, according to international organic agricultural standards.
The company has created more than 400 local jobs in Mozambique and is committed to the Principles and Rights at Work of the International Labour Organization (ILO) and the ETI Base Code (the Ethical Trading Initiative).
Desert Sun Trade facts
· Trading primarily in bananas
· Based in Nelspruit, South Africa
· The marketing arm of African Food Company, a farm in Chokwe, Mozambique
· Sells upwards of 10 000 tons of bananas a year
· Marketing fruit mainly to prepackers and markets
What was their biggest logistical challenge?
Desert Sun Trade needed to reduce pallet costs. The company consumed around 600pallets per month, with no reuse, at a cost of more than R60per pallet. They were also considering changing their marketing strategy to achieve higher grades and premium prices by supplying in crates, instead of single-use boxes, as they had previously.
“We were using single-use boxes to transport our bananas. Packing these boxes on pallets required costly corner pieces and bin sticks to ensure fruit quality,” says Desert Sun Trade Senior Buyer Jon Goosen. “The boxes also attracted customs duty on import into Mozambique and again when the full boxes returned to South Africa.”
How was this challenge resolved?
Desert Sun Trade approached CHEP to assist in reducing pallet costs, and CHEP crates did not only reduce costs but opened a new distribution chain for Desert Sun Trade. The specially designed CHEP crates facilitate ventilation and protect the fruit through the supply chain journey. Prepackers only accept bananas in crates, and by meeting their requirements, the company was able to fetch premium prices for their bananas.
The foldable CHEP crates also occupy far less space than other solutions when they’re not in use. This allowed the company to handle the return journeys to the farm efficiently and cost effectively, with less environmental impact.
“All of our clients, including Golden Harvest, our prepacker in Cape Town, have been very impressed with the CHEP crate. It’s smooth and well aerated, so it doesn’t damage the bananas on the long trip from the farm,” said Goosen.
What were the additional benefits?
CHEP pallet rental was another solution, which Desert Sun adopted in January 2018. They have not bought another pallet since, and overall pallet costs have been reduced by 40%.
“Because the CHEP crates are collapsible, we can (on our return trip) transport around 9 500 crates per truck – seven times the previous capacity. This saves us around 20% on costs per load, compared to crates that don’t collapse, which require more transport journeys,” says Goosen.
“The new crate system saves us 30% per crate, when compared to cardboard boxes. This translates to a 7.5% saving per banana load. All in all, our CHEP solution has helped us decrease costs and increase our product’s value add.”
* The European Organic Certifiers Council (EOCC) is an association of control bodies and authorities.