South Africa port staff union agrees to pay deal, end strike

South Africa’s state-owned ports and rail operator reached a three-year wage deal with its biggest labor union, with its members agreeing to immediately call off a strike that caused a costly slowdown of exports of minerals and other goods.

Transnet SOC Ltd.’s offer to pay workers raises of as much as 6% and improve housing and medical benefits was accepted by the United National Transport Union, which represents 24,992 workers, or 54%, of those who were party to the wage talks. 

The union started the industrial action on Oct. 6 and other groups later joined in, slowing some port and rail operations and bringing others to a standstill. The impasse with the other unions remains ongoing, although the accord will apply to their members.

“The company’s priority in the immediate is clearing any backlogs across the port and rail system -- prioritizing urgent and time-sensitive cargo -- and implementing recovery plans, working with industry and customers,” Transnet said in an emailed statement on Monday. 

Backdated Increases

The agreement, which was negotiated by the Commission for Conciliation, Mediation and Arbitration, will run from April 1 this year until the end of March 2025, and the increases will be backdated, it said. 

The South African Transport and Allied Workers Union said it hadn’t met with Transnet since pay talks collapsed last week. 

“We received an offer from the CCMA which was rejected by our members,” Anele Kiet, the union’s deputy general secretary, said by phone on Monday. “We don’t have a mandate to sign the 6% offer, so we will continue with the strike up until our members tell us to do something different.”

Mining companies have been particularly hard hit by the strike, with lobby group Minerals Council South Africa estimating that daily shipments of iron ore, coal, chrome, ferrochrome and other bulk minerals fell by three-quarters. That cost companies about 815 million rand ($45 million) a day, it said. Fruit producers expressed concern that their harvest would rot on the docks.

The rand extended gains, rising as much as 1.9% against the dollar.

The strike was another blow for South Africa’s economy, which contracted in the second quarter. Output has been weighed down by the under-performance of state-owned companies such as Transnet and power utility Eskom Holdings SOC Ltd., which regularly implements electricity outages because it’s unable to meet demand.

Even before the strike, producers complained that Transnet’s inadequacies were curtailing sales at a time when prices were surging. The Minerals Council estimates that exports could be increased by 151 billion rand a year “if all rail and ports systems were optimally and efficiently run at design capacity.”