Transnet strike is ‘more devastating than load shedding’

The South African Association of Freight Forwarders (Saaff) has called for the urgent resolution of the Transnet wage negotiations to maintain the supply chains.

The association said the ongoing impasse between recognised unions and Transnet is devastating to the economy — much worse even than the ongoing energy crisis.

South Africa’s logistics utility Transnet declared force majeure on Thursday after their workers downed tools and embarked on a strike over wages.

The strike comes after the United National Transport Union (Untu) and the South African Transport and Allied Workers Union (Satawu), turned down Transnet’s offer of a wage rise of three to four percent, saying it was below South Africa’s annual inflation rate, which was 7,6% in August.

Members of Untu downed tools on Thursday and it is believed that Satawu members are due to join in the strike from Monday.

Saaff said they have learned during the pandemic that it is essential for supply chains to be maintained at all times.

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It said research shows that logistics delays to the supply chain cost our economy between R100 million and R1 billion per day.

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However, it said, when calculating the total economic cost, the final impact is far higher and more devastating than that.

Dr Juanita Maree, chief executive officer of Saaff said that according to the latest SARS merchandise stats, R343 billion worth of goods were traded (imports and exports) in August.

If we consider that 70% of merchandise is processed via the ocean modality, the current inactivity blocks more than R8 billion worth of goods each day. Combined with the ripple effect, the impact is more than the country can absorb, given the current economic climate.
The unintended consequences of the port strikes will be far worse than our energy crisis if left unattended, as the shock to our economy could not have come at a worse time.
A one-day port activity loss results in a minimum of 10 days of recovery.

“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.

Maree said the strike was throttling the economy to the point of no return.

She said international trade remains an essential driver of economic growth and development — and, importantly, job creation. Maree said facilitating trade must occur on shared infrastructure via shared responsibilities from all parties.

Any failure to facilitate trade has dire consequences for every South African, said Maree.

Against the backdrop of low growth, high unemployment, and rising living costs, we are doing an injustice to ordinary South Africans by leaving this catastrophic situation unattended.