Strikes at South African rail and port provider Transnet are causing major disruption to the supply chain and 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, which represent over 30,000 port workers, began on Monday 10 October.

Transnet said its port terminals were still operating, but admitted the strikes affected container and car terminals at the port of Durban, which handles 65% of container volumes in South Africa.

Mining companies including Thungela Resources, Jupiter Mines and Kumba Iron Ore said the strike was likely to affect coal and iron ore production and export, as well as manganese production.

Mineral exports have been affected by a series of shutdowns at Transnet ports. The Minerals Council South Africa said the shutdowns would cost the sector $44 million a day – another blow to the country’s attempts to benefit from high commodity prices.

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 trade movement” at the ports.

Transnet announced Thursday, October 13 that it had tabled a new three-year wage offer to the unions to avoid the strike.

“The negotiations have been a delicate balancing act for the company – mindful not only of the affordability and sustainability of salary increases for the company, but also of the full appreciation of the cost pressures to which employees are currently facing,” Transnet said.

He said his new offer included wage increases of 4.5% as well as a higher medical aid allowance and increases in back wages.

“Although the parties have not yet accepted this offer, commitments are ongoing. The company remains committed to concluding wage negotiations quickly and amicably, in the interests of the employees, the company and economy,” he 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 compared to the current energy crisis”, he said. she adds.

She said SAAFF research has shown this could have a financial impact of between R100 million and R1 billion ($5-55 million) per day.

However, the overall costs would likely be even higher, she added, as inactivity at ports blocked more than R8 billion of trade every day.

Maree said policymakers didn’t seem to understand the full implications of the strike.

“A loss of one day in port activity leads to a minimum of 10 days of recovery, operationally. However, the economic loss is having a ripple effect on the economy, leading to further loss of foreign income at a time when our trade balance is steadily deteriorating,” she said.

“Therefore, our estimates are conservative at best and losses will likely run into billions a day.”

Maree said the strike was strangling the economy and called for urgent and decisive action by the government.

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