Strikes at South African rail and port provider Transnet are causing significant supply chain disruption and are threatening wider economic chaos, business groups have warned.
Strikes by members of the South African Transport and Allied Workers Union and the United National Transport Union, representing more than 30,000 port workers, started on Monday (10 October).
Transnet has claimed its port terminals are still working but admitted the strikes were impacting container and car terminals at Durban port, which handles 65% of South Africa’s container volumes.
Mining companies including Thungela Resources, Jupiter Mines and Kumba Iron Ore said the strike was likely to hit the production and export of coal and iron ore, as well as manganese production.
Mineral exports have been affected by a series of stoppages at Transnet’s ports. Minerals Council South Africa said stoppages would cost the sector $44m per day – a fresh blow to the country’s attempts to benefit from high prices for raw materials.
Business groups have warned of massive economic fallout if the dispute is not resolved quickly.
Road Freight Association CEO Gavin Kelly said he believed “there was no movement of trade” at the ports.
Transnet said on Thursday (13 October) it had tabled a new three-year wage offer to unions to avert the strike.
“The negotiations have been a delicate balancing act for the company – mindful not only of the affordability and sustainability of the wage increases for the business, but also having full appreciation of the cost pressures that employees face currently,” Transnet said.
It said its new offer included 4.5% wage increases along with a higher medical aid allowance and back pay increases.
“While the parties have not settled on this offer, engagements are ongoing. The company remains committed to concluding the wage negotiations speedily and amicably, in the interests of employees, the company and the economy,” it added.
Juanita Maree, CEO of the South African Association of Freight Forwarders’ (SAAFF), said the dispute was having a devastating effect on the country’s economy – “much worse even when compared to the ongoing energy crisis”, she added.
She said SAAFF research showed that it could have a financial impact of between R100m and R1bn ($5-55m) per day.
However, the overall costs were likely to be even higher, she added, as inactivity at ports was blocking more than R8bn worth of trade each day.
Maree said decision-makers did not seem to understand the full implications of the strike.
“A one-day loss in port activity results in a minimum of 10 days of recovery, operationally. However, the economic loss has a ripple effect on the economy, resulting in further foreign revenue loss at a time when our balance of trade is steadily deteriorating,” she said.
“Therefore, our estimates are conservative at best and losses will likely run more into the billions per day.”
Maree said the strike was throttling the economy and called for urgent, decisive action from the government.
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