South African workers strike hits cargo movement, industries voice concerns

Industries including shipping, mining and trading have voiced concerns over how the ongoing strike action by port and rail workers in South Africa their business.

PHOTO: Above view of Durban Harbour, South Africa. Getty Images

Workers at South Africa's state-owned logistic company Transnet have been on strike since last week over pay hike disputes. The impasse has worsened after workers, represented by the United National Transport Union (UNTU), rejected a revised pay offer from Transnet's management.

Transnet said today it has improved its pay hike offer to 4.5%, up from from 3-4% earlier. This would come with additional 5.3% annual increases over the next two years.

However, the UNTU union has declined the offer and vowed to continue the strike.

Continuous strikes and escalation of disputes between workers and Transnet has sent shivers through industries in South Africa. The situation has already started to affect cargo movement in ports across the country.

But bunker operations are still running normally, a source says.

The Minerals Council South Africa has urged the two parties to resolve the pay dispute speedily as the strike is hurting South Africa's mineral exports and wider economy.

“According to our estimates, bulk mineral exporters are losing R815 million ($44 million) worth of exports per day because they are unable to rail and load 357,000 tonnes of iron ore, coal, chrome, ferrochrome and manganese onto ships daily,” the industry body said in a statement today.

On average, South Africa exports around 476,000 mt/day of bulk minerals.

“We estimate that just 120,000 tonnes of minerals worth R261m ($14million) are being exported daily. Major mineral export harbours are operating at between 12% and 30% of their daily averages,” it said.

Container shipping giant A.P. Møller – Mærsk has also initiated a contingency plan for its cargo operations in South Africa to mitigate the impact of the strike.

In a statement on its website, Maersk says the workers strike has brought all terminals and rail services to “an operational standstill.”

Based on the current situation “we had to make two services diversions to ports outside South Africa. We have vessels alongside with containers still to be discharged that are heavily delayed and, with minimal gate and rail activity, we will not be able to deliver sold transit times and delivery dates,” Maersk said.

Transnet declared force majeure at its ports on last Thursday.

By Shilpa Sharma

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