Transnet is now counting the costs and has begun with the implementation of recovery plans across its operations as the industrial action left untold damage to the country’s economy. Photo: Phando Jikelo/African News Agency (ANA)
Much to the relief of the business industry, the Transnet strike has officially come to an end after two weeks of disruption to operations that are a lifeblood to South Africa’s economy.
However, Transnet is now counting the costs and has begun with the implementation of recovery plans across its operations as the industrial action left untold damage to the country’s economy.
The South African Association of Freight Forwarders (SAAFF), which represents more than 300 clearing and forwarding agents, said yesterday that its members incurred logistics costs of nearly R7 billion over the 11 days of industrial action at the ports.
SAAFF said South Africa also lost the opportunity of moving R65.3bn worth of goods, with a possibility that some would be moved later but the rest are gone forever.
SAAFF CEO Dr Juanita Maree said while they were pleased that a wage agreement had finally been reached, the hard work would only start now.
Maree said most port terminals were operating at productivity levels that were somewhere between medium and normal levels.
“In the aftermath, beyond the strike, barring any further destruction, a complete restoration of normal functionality will only happen in early 2023, as the consequences of one day's worth of stoppage have been shown to result in anything up to 10 days needed for recovery,” Maree said.
“Restoring normality can only happen if we learn from this experience and adopt better operational practices to improve our logistics performance.”
Western Cape MEC for economic opportunities Mireille Wenger said industry experts had stated that it may take anywhere between six and 10 weeks to clear the significant backlog that has built up at their ports.
Wenger said they were engaging with freight forwarders, exporter associations and transporters about increasing the utilisation of the night shift to help clear the backlog.
“November marks the start of the table grape exporting season, which is a substantial export earner, and which generated almost R9.8bn in 2021 in exports to the rest of the world,” Wenger said.
“Ensuring our ports are working efficiently is, therefore, a top priority.”
Transnet has confirmed that it was focusing on clearing backlogs created as a result of the industrial action. However, the company would not be lifting the force majeure just yet.
This could lead to another slashing of South Africa’s growth forecast when the Finance Minister Enoch Godongwana tables his Medium-Term Budget Policy Statement next week, as well as by the SA Reserve Bank when it announces its final rates decision for the year in November.
“If goods can't move, the economy stops. And if the economy stops, the impact is hugely negative for anything related to the movement of cargo – including time, cost, and service reliability,” Maree said.
“With the economy's circular flow, ordinary South Africans will suffer in the end – the very individuals who went on strike against a wage offer way below the inflation figure.”
The strike officially came to an end when the majority United National Transport Union (Untu) on Tuesday signed a collective agreement for 6% wage increases with Transnet.
However, the South African Transport and Allied Workers Union (Satawu) negotiating team has refused to sign and/or be a party to the collective agreement, even though it called off the industrial action on Wednesday and went back to work yesterday.
The Cabinet yesterday welcomed the end of the strike and the commitment by Transnet to focus on clearing backlogs which negatively impacted the sectors that are dependent on its services.
“Cabinet expressed its gratitude for the support and co-operation given by business during the strike,” said Cabinet spokesperson Mondli Gungubele.
“It encourages a continuous relationship between Transnet management and labour for the benefit of the company and the economy of the country.”
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