PE port strike hampers vehicle and citrus exports

 

Transnet has obtained a court interdict to stop illegal strike action by employees at the Ngqura Container Terminal after it severely disrupted production at the Volkswagen South Africa (VWSA) manufacturing plant in Uitenhage and caused a crisis in the citrus industry in the Eastern Cape.

The go-slow at the Port Elizabeth terminal resulted in VWSA losing three shifts and the production of 680 VW Polos and Polo Vivos. It also saw the Citrus Growers Association calling on trade and industry minister Ebrahim Patel to intervene on behalf of the industry to prevent the industrial action in the port from developing into a deeper economic crisis.

Molatwane Likhethe, a spokesperson for the transport state-owned enterprise, said the order by the Labour Court in Port Elizabeth was issued to all operations employees at Ngqura Container Terminal and also ordered workers to increase performance levels at the port, which has been hit by a ‘go-slow’ for the past two weeks.

Read: Go-slow at port hits SA car and commodity exports

Likhethe said operations at the Durban Container Terminal and Cape Town Container Terminal had also improved, adding Transnet was aware of the challenges this had caused to various industries across the country.

Mohammed Mahomedy, the acting group chief executive at Transnet, said they were working around the clock to find solutions, including prioritising urgent cargo.

“We are also continuing to refine our contingency plans to minimise the impact to the economy,” he said.

Lost production

Andile Dlamini, a spokesperson for VWSA, said on Monday that its plant was able to produce normally on Thursday, Friday and at the weekend but the situation was not looking positive from Tuesday.

“Today we are fine but beyond today we don’t know what will happen. We are still battling to get vessels to berth so they can offload.

“The only reason we were able to produce [towards the end of] last week [was] because of [a] vessel managing to berth and offload containers with our parts,” he said.

Dlamini added that VWSA was trying to get a vessel to offload its containers in Cape Town and then, at significant unplanned cost, transport them by road to Port Elizabeth.

He said the vessel normally docked in Cape Town, where it offloaded containers for customers in the Mother City before sailing to Port Elizabeth.

But Dlamini said the risk was that if the vessel got to Port Elizabeth and the situation at the port had not improved, they would again have to wait for a slot for it to be unloaded.

The go-slow in the port has not yet affected the production of Isuzu Motor SA, the other vehicle manufacturer in the city.

Denise van Huyssteen, the corporate affairs, business strategy and legal executive at Isuzu Motors SA, said at this stage they still had sufficient inventory to build vehicles but if the go-slow continued for much longer, it was likely to disrupt their operations.

Van Huyssteen said they were also very concerned about the impact the go-slow was having on their suppliers who were currently awaiting material.

‘Highly damaging’

“Disruptions of this nature are highly damaging to our industry and we call upon the relevant stakeholders to urgently resolve this impasse.

“Additionally, going forward, the port needs to improve its operational efficiencies to support the importation and exportation of goods. This is key in positioning our city as a reliable supplier of goods to other markets,” she said.

Dave Coffey, MD of Shatterprufe and deputy president of the National Association of Automotive Component and Allied Manufacturers (Naacam), said the automotive component industry was experiencing delays of up to 10 days with containers coming in and going out.

Coffey said component suppliers had the risk of running out of components coming in, which in turn could affect the original equipment manufacturers (OEMs) and was a challenge.

Exports under threat

In addition, from an export perspective as a direct exporter of components like Shatterprufe, there were delays in shipments into Europe and 30% of their production was exported into Europe, he said.

Coffey confirmed Shatterprufe was at the same time bidding for new business for next year “and this is not going to be good for us with these delays”.

Justin Chadwick, chief executive of the Citrus Growers Association, said the situation at the port had now reached crisis proportions.

Chadwick said citrus export production in the Eastern Cape was at its highest level with production on several varieties of citrus peaking well above average at this time.

He said the consequences of delays on vessels calling into the port were that containers of citrus were unable to be packed, which meant citrus consignments now had to be trucked at extra cost to Durban and Cape Town for export.

“These ports are, in turn, under mounting pressure and it is our real concern that the South African shipping system is in danger of imploding.

“The world citrus market is a competitive place where quality, reliability and reputation are paramount. Together with government, our industry has worked tirelessly for years to achieve a position of prominence and respect worldwide.

“But we need to guard it fiercely and developments like these pose a real and imminent threat,” he said.

Related posts

Leave a Comment