South Africa, the largest economy in Africa, is suffering a
series of strikes that is not only crippling its economy but also how the world
views the country. Starting within the mining industry, the strikes have now
spread to the public sector and the trucking industry. The possibility of it
spreading to rail and port workers is strong as the South Africa Transport and
Allied Workers Union has applied for permission to expand the strike to these
workers.
After Asia, Africa is the fastest growing region in the
world and is home to a growing middle class. South Africa is considered an
entry-point for many international companies interested in expanding into
Africa. However, the risks surrounding the current turmoil and rising costs have resulted in growing
concern for many companies contemplating such a move. In fact, the strikes have
exposed South Africa’s persistent issues of widespread poverty and unemployment
despite the end of apartheid over eighteen years ago. It also raises a question concerning the region overall - how much will this affect the growth of the overall region?
Every industry has been affected by the strikes, including the
automobile industry which represents 10% of South Africa’s manufacturing
segment. After a three day strike by The National Union of Metalworkers, Toyota
agreed to increase wages by a reported 5.7%. During the strike, the company
lost 2,428 vehicles worth of production, about 14% of its monthly average. Despite
this and to show its commitment to the country, Toyota opened a new parts
distribution warehouse in Ekurhuleni, Gauteng, South Africa. The facility holds
more than 2.2 million parts pieces worth more than 350 million rand ($42
million) and supports 268 local suppliers.
Now in its third week, strikes by more than 20,000 truck
drivers demanding higher wages has halted the delivery of goods across the
country. According to General Motors, “the transport workers strike has
disrupted material supply activities in our vehicle assembly facility.” The
trucking strike has halted the delivery of goods throughout the country and as
a result food and fuel shortages have been reported. Shell noted that it would
not be able to honor contracts to deliver fuel near Johannesburg because of the
trucking strike. If rail and port workers strike, the situation will only
worsen.
South Africa faces a complete collapse of its economy if the
issues surrounding the strikes are not resolved soon. Prior to the strikes, the
economy was already suffering due to declining demand from its
largest trade partner the European Union. Now, it faces a direr situation as
its currency plummets and manufacturing comes to a halt.
Although little word is coming from the logistics community,
one would suspect that many of these providers are in constant contact with customers but also at a standstill
particularly as the country’s entire transportation infrastructure is likely to
come to a halt.
An update: It was announced on the 9th that about 15,000 truck drivers will return to work on Wednesday. This, after employers agreed to raise wages by at least 10%. However, members of the South African Transport and Allied Worker's Union will not resume work and are still in negotiations.
Second update: Good news, it appears the trucking strike is now over per this article from Mail & Guardian.
An update: It was announced on the 9th that about 15,000 truck drivers will return to work on Wednesday. This, after employers agreed to raise wages by at least 10%. However, members of the South African Transport and Allied Worker's Union will not resume work and are still in negotiations.
Second update: Good news, it appears the trucking strike is now over per this article from Mail & Guardian.
