South Africa lost business confidence and access to key trade routes after days of chaotic violence following the jailing of former President Jacob Zuma. Days of protests erupted into violence in KwaZulu – Natal, following the jailing of former South African president Jacob Zuma. The arrest triggered days of civil unrest including protests, arson, and looting of businesses.
On Monday, July 12, there were reports of a shopping mall being looted and set on fire, warehouses looted, and major roads being blocked. The Wall Street Journal is reporting that at least 72 people have been killed while the Associated Press reports that more than 400 people were arrested as the South African security forces attempted to stop the violence.
After days of violence that is now spreading across South Africa, the South African logistics company Transnet that oversees the operations of the country’s ports and terminals declared force majeure on July 12 announcing that it is suspending terminal operations in both the ports of Durban and Richards Bay. The company cited concerns for the safety of their employees and the inability to travel safely in the cities, but the company denied a report of looting at the ports.
A supply chain is broken
The Telegraph reported that more than 35 lorries had been burned and damaged on the road before reaching the rest of the continent. The N3 highway, which is the thriving travel route for trade between Cedara and Harrismith, has now been shut as a precautionary measure. The closure could threaten to cut off essential supplies such as food and medicines.
The country’s Road Freight Association warned that N3 closures could cost billions if the disruption continues to spread and even lead to countries turning away from South Africa, as a trading hub.
The German carrier Hapag-Lloyd has announced that its terminals have been impacted and they have published: “We understand that given the situation, there will be an impact on your cargo planning and for that, you have our support as we navigate through these difficult times together,” said the company in its statement.
The Danish shipping powerhouse, Maersk has also announced that the impact of South Africa unrest has resulted in some of its depots being shut down and terminals operating with “skeleton staff”.
“We realize that some cargo owners will temporarily cease operations during this period resulting in the disruption of Imports and Exports,” commented the Copenhagen-based box line.
Therefore, Maersk has decided that no detention will be invoiced from 12 to 19 of July.
Force Majeure Declared
Transnet declared force majeure on the NATCOR rail line and it suspended the operations of the country’s ports and terminals.
South African media also reported that Shell and BP South African Petroleum Refineries have also declared a force majeure. The operations reportedly are responsible for 35 percent of South Africa’s refinery capacity.
Two weeks ago, before the latest rounds of violence, mining giant Rio Tinto also declared a force majeure on customer contracts at its Richards Bay Minerals project.
South African President Cyril Ramaphosa addressed the nation and in a series of Tweets has appealed for calm and a return to order. He is vowing that they will not hesitate to arrest and prosecute the perpetrators. He has said they will do everything to guard against the threat of violence, intimidation, theft, and looting.