A major standoff is brewing between Transnet and its two largest labour unions, the South African Transport and Allied Workers Union (Satawu) and the United National Transport Union (Untu), over wage increases. The unions are demanding pay hikes far above inflation, with Satawu calling for a 17.5% increase over three years and Untu seeking 12% in a single year. In contrast, Transnet has proposed a more conservative offer of inflation plus 4.5% in the first year, followed by inflation plus 0.5% for the next two years, amounting to a total increase of 14.5%. With inflation currently around 3%, the unions argue that the rising cost of living, including housing, healthcare, and education, justifies their demands.
Transnet, already burdened by R100 billion in debt and struggling with ageing infrastructure and operational inefficiencies, insists that its offer is fair and sustainable given its financial constraints. The company is under pressure from ratings agencies and economists, who warn that it may require government assistance to remain viable. Beyond wage increases, the unions are also demanding a moratorium on job cuts, improved medical aid benefits, and higher housing allowances. They have accused Transnet of stalling negotiations, citing concerns that management is using inflation selectively to justify its position. Union leaders warn that the dispute could escalate into strikes, similar to the industrial action seen in 2022.
Transnet’s operational and financial struggles, largely a legacy of state capture, continue to undermine its ability to function effectively. The company reported a R2.2 billion loss for the six months ending in September, highlighting its fragile position. At the heart of the dispute is the balancing act between worker demands and the company’s ability to stay afloat. While unions remain firm on their wage expectations, Transnet is urging a quick resolution to negotiations so it can focus on stabilising operations. With tensions running high, the risk of prolonged disruptions to South Africa’s rail and port logistics sector remains a real possibility.