• Two unions will strike at Transnet.
• The unions are in dispute over a 1.5 percent pay increase.
• A strike could affect the export of minerals and other cargo.

Two labor unions have said that employees at South Africa’s state-owned logistics company Transnet will begin walking off the job starting on Thursday due to a pay disagreement. This might block the export of important minerals and other cargo.

Due to a lack of locomotives, poor maintenance, vandalism, and theft of its equipment, Transnet has been running below capacity, which has cost miners billions of rand in lost income. A strike would have an impact on South Africa’s ports, which are also run by Transnet, and would shut down freight train services.

The largest labor union at the corporation, the United National Transport Union (UNTU), announced that it has given notice to start industrial action on Thursday. South African Transport and Allied Workers Union (SATAWU), the other Transnet union, announced it would join the strike starting on Monday.

Transnet’s offer of a 1.5 percent pay increase starting on October 1 was deemed inadequate by both unions.

In a statement, the UNTU stated that Transnet “must deliver a pay rise offer that is aligned with the increased cost of living, cost of housing, medical bills, housing, and, of course, the consumer price index (CPI) that is currently running at 7.6 percent.”

The COVID-19 outbreak and the rise in the cost of goods like bread as a result of disruptions in the global supply chain caused by Russia’s invasion of Ukraine have both contributed to recent increases in living expenses in Africa’s most industrialized economy.

Former President Thabo Mbeki forewarned in July that the situation would lead to a “Arab Spring-type insurrection” in the nation.

Any salary raise above what it is already offering would not be sustainable, according to Transnet.

“Transnet has often emphasized that its wage bill currently accounts for more than 66 percent of its monthly operational expenses. Given the current operational and financial performance, this is not sustainable, the company declared in a statement on Tuesday.

Transnet has requested additional negotiations with the unions from the Commission for Conciliation, Mediation and Arbitration (CCMA), a state body that handles labor disputes.

Both UNTU and SATAWU stated that their plans to strike would not be impacted by the mediation, which is scheduled to begin on October 12.

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