Transnet strike: 95% of South Africa’s economy will be directly negatively affected

Transnet’s ongoing strike is a time bomb which will have a “catastrophic knock-on effect” on the already struggling economy, as it is SA’s economic lifeline and the state-owned ports and freight rail operator is integral to the sector.

Political and energy analyst Tshepo Kgadima said although the impact of the strike seemed small, “in the greater scheme of things, the impact on the economy might be hard to recover from”.

“Everything to do with agriculture, whether it’s input materials such as diesel, fertilizer the farmers so badly need because it’s a planting season, grains or wheat which we need to bring in, [will be affected],” he said.

“When Transnet – which is integral to the shipping industry – declares a force majeure, that is an economic catastrophe, because we are talking 95% of the economy of South Africa affected directly negatively by this strike.”

Transnet declared force majeure at its ports on Thursday, saying they were anticipating some of their operations would be scaled down.

“However, and to the extent possible, we will attempt to invoke contingency plans and source external standin temporary resources to ensure the operations continue across the various terminals,” Transnet said in a statement.

“Should the strike extend beyond the anticipated period of one week, Transnet will assess the impact of the strike on its operations and the force majeure event declaration, and communication in this regard will be forthcoming.”

However, the United National Transport Union (Untu) said members were not backing down from their demands, which include a wage increase and general improvement in their conditions of employment.

On Tuesday, Transnet doubled its wage offer from an increase of 1.5% to 3%, which Untu rejected, calling it an insult. “We want Transnet to provide us with a proposal that is aligned with our members’ needs – the current economic situation in SA, the increase in the medical aid, fuel, and CPI rate,” Untu spokesperson Cobus van Vuuren said.

“I’m not going to give you a percentage now. We will respond to whatever Transnet comes up with, because we work on mandate and we have to meet somewhere in the middle.”

The SA Transport and Allied Workers Union threatened to go on strike on Monday if members did not agree to the new offer.

The Road Freight Association (RFA) slammed Transnet’s decision to invoke a force majeure, calling it “ill-placed, wrong and irrelevant to the current circumstances”.

RFA chief executive Gavin Kelly said a force majeure was normally used when events which were totally unforeseen, unplanned and not in any way able to be deferred or be counted by an organisation, like Covid and the recent floods in KwaZulu-Natal.

Kgadima said the strike could have “a serious impact on motorists and road transport companies, affecting the distribution of fresh products if an agreement was not reached soon”.

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– reitumetsem@citizen.co.za