Cape Town - While an agreement between the United National Transport Union and Transnet has been reached in attempts to put an end to the two-week strike, the backlog in the berry value chain will take weeks to clear, resulting in hundreds of millions of rand in further losses for the sector.
More than 80 containers of berries destined for European markets have been sitting at the ports, with the strike currently costing the industry more than R134 million a week and putting thousands of jobs at risk.
This was according to BerriesZA’s chairperson, Justin Mudge, hours before Transnet announced a three-year wage agreement on Monday.
The wage agreement entails a 6% increase in the basic wage for levels H to L, and 6% on the annual cost-to-company package for level G during year one. The agreement also includes a 5.5% increase in the basic wage for year two and a 6% increase in year three.
Employees will also receive an increase in the medical aid subsidy, in line with the increases in the basic wage, over the duration of the agreement.
The increase to the medical subsidy for the 2022/23 financial year will be implemented from October 1, 2022. There will also be an increase in the housing allowance commencing from the 2023/24 and 2024/25 financial years.
The agreement is applicable for the period April 1, 2022 to March 31, 2025.
Transnet spokesperson Ayanda Shezi said the ports authority’s immediate priority would be to clear all backlogs across the port and rail system.
“Even if a solution to the current impasse is found in the next day or two, the backlog in the berry value chain will take weeks to clear, resulting in hundreds of millions of rands in further losses for the sector,” said Mudge.
He said despite the Transnet executive team indicating that they would put contingency plans in place to ensure critical goods would continue being exported during the strike, that did not materialise.
“That this scenario was not adequately planned for in advance points to poor leadership at the ports authority, which has put South Africa’s entire economy at risk.
“This includes the livelihoods of 30 000 workers in the berry industry, with at least 90% of these employees being economically vulnerable women in rural communities.”
Western Cape agriculture MEC Ivan Meyer said the labour dispute undermined the considerable growth the berry industry has experienced over the past few years, which has resulted in 33% growth in the area used to produce berries in the province.
Head of Ports, Transport and Logistics at law firm Bowmans, Andrew Pike, said though it was almost impossible to quantify accurately what the true cost of the strike will be, the impact will be felt throughout the economy.
“At a time where unemployment is at its highest levels ever and the man in the street is reeling under the weight of inflation and the cost of living, the strike will almost certainly aggravate these crises,” said Pike.
Shipping expert Brian Ingpen said the country could not afford a strike in the most important sector in the economy – transport, and particularly in the harbours through which over 90% of South African trade passes.
“The already inefficient ports and rail system have cost the country’s mineral exporters millions of rands in lost earnings while delays to some citrus exports could see the product deteriorate to the point that the fruit becomes unsuitable for export.
“This comes at a time when the rand is weak and therefore export earnings for the agricultural and mining sectors could have been exceptional. The spin-off in terms of lost taxes and of foreign reputation for future sales should also be factored in.
“Strike action in the ports has led to extensive, costly delays to ships.
On Monday, 39 ships were anchored outside Durban harbour and 36 vessels outside Richards Bay. Other ships have diverted from local ports or are slow-steaming, hoping to arrive once the strike is over and the backlog has been cleared.
Angered by delays and the enormous costs they incur following the strike, some ship operators or shippers could take their business elsewhere. Jobs are lost in the process, and it takes years to regain lost ground – if at all.
Additional costs are passed down the line to the consumer,” said Ingpen.
Cape Times