Transnet strike causes dire situation for industries across the board

The strike at Transnet has left large cargo waiting at terminals and goods stuck in vessels at ports, hampering the supply ahead of the festive season.

CEO of South African Association of Ship Operators and Agents, Peter Besnard, said there was currently a huge backlog of containers at the ports, which have not been processed due to the strike.

Besnard said at the Durban Container Terminal operations had been suspended while the New Pier 1 terminal in eThekwini was also not operational.

“The industry is losing millions as some plants are running out of stock and will have to shut and place staff on short time. There is millions of rand worth of goods destined for South Africa on the water for the Christmas peak season that may not reach the stores if the strike doesn’t end,” he said.

Besnard said by Tuesday morning there were six container vessels, 18 bulk carriers, one multi-purpose vessel, three tankers and two carriers that are just waiting to be offloaded. These are carrying goods from China, Europe, South America and the US.

“Today [Wednesday] is day six of the strike and the last strike in 2010 that was said would never happen lasted 17 days and took seven months to recover. It is a desperate situation,” he said.

He said importers of the goods could face penalties from the suppliers.

On Friday thousands of Transnet workers downed tools demanding above-inflation wages. The strike has shut down the movement of goods on rail operations at ports. AgriSA executive director Christo van der Rheede said the strike could not have come at a worst time.

“We know that the berries exporters are getting ready to export their fruit within a week or two. It will be a massive setback for the berry industry if they are unable to export. There is also citrus fruits that are still being exported, we cannot afford to lose that citrus as a result of the strike.

“There are tractors at the harbours that the farmers require for the coming summer grain season, it is important that those implements are delivered in time for farmers to prepare the fields for the next summer grain harvest,” Van der Rheede said.

He added that farmers still required fertilisers and other inputs which were imported by ship.

“Due to the economy that is so fragile, we cannot afford any delays and other disruptions at our national ports,” he said.

COO of the Steel and Engineering Industries Federation of SA, Tafadzwa Chibanguza, said although it was difficult to quantify the impact, the results would be dire.

“We are a sector that is heavily dependent on trade. We export 30% of our production … We import about 40% to 50% of our intermediate goods.

“Any disruption at Transnet affects us severely. On imports, it affects the supply chain and your ability to make products. On the export side there is a reputation harm because a lot of these clients plug into very intricate global supply chains. Your inability to supply your customers causes reputational harm,” Chibanguza said.

Chibanguza said steel producers could face serious supply problems as the commodities were not moving.

On Monday, Kumba Iron Ore said the estimated impact on production was 50,000 tonnes per day for the first seven days of the strike.

Chibanguza said the production of steel requires constant supply of inputs – iron ore and cooking coal – for the furnaces. If that supply was disrupted, producers could face major breakdown.

“If you are running a business, for you to be sustainable you need to continue producing… If you are not producing your unit costs increases because you are not selling which threatens your viability that can lead to companies downsizing,” he said.