Following a strike that throttled the exporting of key commodity crops, Transnet workers affiliated with the United National Transport Union (Untu) have accepted a three-year pay-rise offer from Transnet. While the move has been widely welcomed by exporters, South Africa’s agriculture sector is far from out of the woods.
Last night, the state-owned logistics company announced that a three-year wage agreement has been reached with Untu, the majority union.
According to BerriesZA chairperson Justin Mudge, the strike was holding the entire agriculture sector at ransom. He is, however, relieved that an agreement has been reached with Untu and hopes that the South African Transport and Allied Workers Union (SATAWU) will follow suit.
In a post on LinkedIn, Mudge wrote, “I must, however, stress that we are by no means out of the woods and the next 10 to 14 days will be absolutely critical in returning our exports to normal.”
In a media release, Transnet said now Untu members had ended their strike, their main priority was to clear any backlogs across the port and rail system.
“[Also,] prioritising urgent and time-sensitive cargo, and implementing recovery plans, working with industry and customers,” Transnet said.
Mudge, who is also a blueberry producer and the managing director of Chiltern Farms in the Western Cape, said that preference needed to be given to perishable products.
“And especially berries and early stone fruit as this is critical to the sustainability of these industries. We would ask that shipping lines, ports and all the logistics providers work in concert to bring normality to our exports,” he pleaded.
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‘Backlog is a major risk’
Meanwhile, Thabile Nkunjana, an economist with the National Agricultural Marketing Council (NAMC), said the immediate end of the strike bodes wells for Mzansi and its trade relationship with the United Kingdom and other European markets.
Nkunjana is of the view that the longer the strike continued, the riskier it would have been to maintain the country’s hard-earned position to export to these and other agricultural markets.
In fact, Chile and Argentina could easily overtake South Africa as the preferred supplier of fruit.
“Those countries are in a good position to step in while South Africa is still having labour issues to deal with, so the biggest risk is the loss of markets in the United Kingdom, Middle East, and European Union.
“Another risk we cannot run away from is the backlog of [shipping] containers that continue to arrive daily [at Transnet ports.] They are not attended to. A day’s worth of containers coming through and not being attended to could lead to ten working days to reduce one day’s backlog – another delay to get the produce to markets,” Nkunjana explained.
Besides the berry industry battling because of the Transnet strike, peach exports are also at risk as it was scheduled to be shipped from South Africa early in October. And although pineapples were a year-round fruit, it also could not reach its targeted market on time.
“We must remember that those markets are doing business and they really do not care about issues that the country is facing. It takes a lot of time to negotiate markets and to develop trust, so strikes like this are putting us in a bad light,” said Nkunjana.
Fruit SA chief executive Fhumulani Ratshitanga agreed that these issues put the fruit industry at risk.
“Increase in freight costs further put pressure on the profit margins of producers, making us uncompetitive. Ports issues have many other implications one of which is the compromise on produce quality in cases of delays as well as potential of vessels bypassing our ports,” she said.
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