Alert: The Country Faces a Dual Port and Rail Strike Crisis…

Published 2022-10-10

A strike will bring operations at South Africa's major ports and railways to a standstill.

Against a backdrop of severe global inflation and a continuing economic downturn, transport worker strikes have been occurring with increasing frequency.

According to a recent Bloomberg report, South Africa's major ports and railways are facing the threat of a strike.

The report said that unions have sent a strike notice to Transnet, dissatisfied with the pay increase proposal made by the state-owned South African port and rail operator. If a strike goes ahead, operations at South Africa's major ports and railways will come to a standstill.

The report said that the United National Transport Union has notified Transnet that its members will stop working from October 6.

Another union, the South African Transport and Allied Workers Union, also said it would begin a strike on October 10.

Transnet operates South Africa's major ports, including Durban and Cape Town, as well as its railway network. These are vital to the country's exports of bulk commodities such as coal, iron ore, chrome and manganese.

South Africa's major coal producers are already being affected by Transnet's insufficient rail capacity.

Regarding the labor dispute behind this strike, Transnet said that its wage bill currently accounts for more than 66% of its monthly operating costs. Given the current “financial and operational challenges,” Transnet considers its offer to unions of a 1.5% pay increase and a one-off payment of 10,000 rand (approximately US$563) before tax to be reasonable.

However, the South African National Transport Union believes that the proposed wage increase must keep pace with the rising cost of living and the current inflation rate, which is 7.6% per year in South Africa.

According to people familiar with the matter, Transnet is negotiating with the unions.

Meanwhile, Transnet has applied to the South African arbitration commission in an attempt to break the deadlock in negotiations with the unions. The mediation process is expected to begin on October 12.

Edited by: Effy Reviewed and published by: Wang Yu

Alert: The Country Faces a Dual Port and Rail Strike Crisis…

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