Transnet declares force majeure on strikes

South Africa’s state-owned ports and freight rail operator declared force majeure after workers started a strike over wages, the third time Transnet has taken this drastic measure since July last year.

“At this time, we anticipate that portions of our operations will be scaled down,” Transnet said in a notice to its customers. “Transnet Port Terminals is open to having consultations with customers who are willing to engage with our executive team to find practical means aimed at overcoming the effect of this force majeure event.”

The South African Transport and Allied Workers Union and the United National Transport Union both declared strikes at Transnet last Thursday after months of wage talks deadlocked. 

Transnet on Wednesday doubled its offer to 3% in a bid to head off the work stoppage. The proposed pay increase is well below local annual inflation of 7,6 percent.

Transnet’s rail and ports network is key to South African exports of bulk commodities such as coal, iron ore, chrome and manganese. A strike threatens to constrain distribution of some of the commodities amid surging demand globally. Companies including Thungela Resources, the nation’s biggest shipper of thermal coal, were already stockpiling the fuel due to bottlenecks on the rail system.

The South African ports are also crucial for shippers from landlocked African countries including the Democratic Republic of Congo, Zambia and Zimbabwe.

Transnet said in the notice it will try to mitigate the impact of the force majeure, a step resorted to when unforeseen events prevent it from meeting contractual obligations, by activating back-up measures and finding external, temporary resources to ensure operations continue. – Bloomberg

The company will seek to “invoke contingency plans and source external stand-in or temporary resources to ensure that the operations continue across the various terminals,” Transnet said.

Bloomberg

Transnet declares force majeure on strikes

South Africa’s state-owned ports and freight rail operator declared force majeure after workers started a strike over wages, the third time Transnet has taken this drastic measure since July last year.

“At this time, we anticipate that portions of our operations will be scaled down,” Transnet said in a notice to its customers. “Transnet Port Terminals is open to having consultations with customers who are willing to engage with our executive team to find practical means aimed at overcoming the effect of this force majeure event.”

The South African Transport and Allied Workers Union and the United National Transport Union both declared strikes at Transnet on Thursday after months of wage talks deadlocked. Transnet on Wednesday doubled its offer to 3% in a bid to head off the work stoppage. The proposed pay increase is well below local annual inflation of 7,6 percent.

Transnet’s rail and ports network is key to South African exports of bulk commodities such as coal, iron ore, chrome and manganese. A strike threatens to constrain distribution of some of the commodities amid surging demand globally. Companies including Thungela Resources, the nation’s biggest shipper of thermal coal, were already stockpiling the fuel due to bottlenecks on the rail system.

The South African ports are also crucial for shippers from landlocked African countries including the Democratic Republic of Congo, Zambia and Zimbabwe.

Transnet said in the notice it will try to mitigate the impact of the force majeure, a step resorted to when unforeseen events prevent it from meeting contractual obligations, by activating back-up measures and finding external, temporary resources to ensure operations continue.

The company will seek to “invoke contingency plans and source external stand-in or temporary resources to ensure that the operations continue across the various terminals,” Transnet said.

Bloomberg