Squeezed Strike threatens to sour citrus exports
Wildcat action by PE stevedores could cost billions of rands
● SA is set to have billions of rands worth of international citrus fruit exports and retail contracts cancelled because of a growing strike at the country’s harbours.
“It is already happening. Retailers in Canada, Europe and the UK are not interested in hearing about SA’s strike excuses. They want their products and if they don’t get them they are going to continue to cancel contracts here and go elsewhere to secure their fruit,” warned Mark Jensen, managing director of fresh produce exporters South African Fruit Promoters.
Jensen’s warnings come after a five-week wildcat strike and go-slow by stevedores — who load and unload ships — at Port Elizabeth and Coega harbours.
Also hard hit has been the vehicle manufacturing sector.
Andile Dlamini, spokesperson for Volkswagen SA, said the car manufacturer relies on the Ngqura terminal for the delivery of parts. The company lost a day’s production, which affected 680 cars, and had to transport parts from Cape Town and Durban by truck to continue working. He added that employees were sent home as they could not work for three shifts due to the go-slow.
Workers, who are now threatening to embark on go-slows at the country’s other harbours, downed tools in the Eastern Cape over pay and promotion disputes. Stevedores are refusing to offload and load dozens of cargo ships anchored off Port Elizabeth. With the strike set to continue, ships travelling to the affected Eastern Cape harbours are diverting to Durban and Cape Town to dock.
But Justin Chadwick, CEO of the Citrus Growers Association, which has pleaded with the government to intervene in the crisis, said the Eastern Cape strike was now affecting Durban and Cape Town harbours.
“The crisis is mushrooming. The ports’ cold-storage facilities are overloaded, with the ports under-capacitated in terms of power supply to containers requiring cold storage. And now this strike is happening.”
The strike has hit the country’s R20bn-ayear citrus industry hard. Farmers, who have experienced bumper crops this year, are now considering stopping picking.
That, say citrus industry insiders, would potentially cripple the industry, spark mass job losses and see tons of fruit left hanging on trees and potentially rotting.
Jensen said that with Port Elizabeth’s cold-storage facilities completely full, farmers were collectively spending an extra R100m a week to transport fruit to Cape Town and Durban. “Farmers, who would usually spend R120 to get a pallet of fruit to the ports in PE, are now spending R600 per pallet to get them to Cape Town and Durban. They have no other choice. The PE cold-storage facilities are full. Either they spend the extra on transport or their fruit doesn’t get to market.”
He said Eastern Cape citrus farmers, especially those from the Sundays River and Gamtoos River valleys, which are internationally renowned for their soft-skinned fruit, were particularly hard hit.
“The soft-skin fruit has a limited shelf life. Overseas retailers require the fruit on their shelves within a week. For Canada, we are meant to supply 24 shipping containers of fruit every week, but cannot. The delays are leading to major quality problems, especially as the fruit is taking upwards of seven weeks to reach their destinations.
“We have vessels anchored offshore unable to load while other ships are now bypassing the Eastern Cape harbours altogether. That’s because shipping companies cannot afford the astronomical costs of the loading delays.
“Farmers are in dire straits and face catastrophic financial losses.”
Jensen said the entire industry felt helpless. “None of this is of our doing, yet farmers, farm workers and suppliers are bearing the brunt of this action, which both Transnet and the unions say is illegal.”
Unions Satawu and Numsa say they are not involved in the strike. United National Transport Union spokesperson Sonja Carstens said Untu received a message that the go-slow was illegal and Transnet had a right to dismiss workers, which led to the suspension of 11 people, of whom three were Untu members.
Transnet issued a statement saying it had a court interdict to stop the strike at the Ngqura container terminal. On Friday Transnet spokesperson Molatwane Likhethe said there had been a marked improvement in the performance at the container terminals at the Ngqura, Durban and Cape Town ports since Thursday.
“There are still areas of concern with regards to equipment failure, absenteeism and adverse weather in areas such as Cape Town and Ngqura,” said Likhethe. He added Transnet has a recovery plan, including additional shifts, to address backlogs.
Hannes de Waal of the Sundays River Citrus Company, SA’s biggest citrus shipment packing company, said the strike had had a massive effect on their exports.
“Usually we process and sell 500,000 cartons of citrus weekly, which includes organically grown fruit. That’s now dropped right down. The irony is that the citrus industry has expanded in Eastern Cape because of access to two new container terminals. While we have these wonderful facilities we cannot use them because of the strike.
“If this strike action continues for another two weeks we will have to stop the packing [for export]. That would see huge amounts of fruit being lost due to over-maturity. Our potential losses, from that alone, would be R60m a week.
“This strike has left our country’s reputation in tatters, with our competitors in Argentina, Spain and Egypt capitalising on our crisis,” De Waal said.