Civil Unrest Causes Widespread Disruptions to the Movement of Goods and Business Operations in South Africa

Civil Unrest Causes Widespread Disruptions to the Movement of Goods and Business Operations in South Africa

Executive Summary

  • Protests broke out in the provinces of KwaZulu-Natal and Gauteng, South Africa’s economic power houses, shortly after the country’s former President Jacob Zuma was taken into custody on July 7.
  • The unrest quickly escalated into the worst violence since the end of Apartheid in the early 1990s, and severely disrupted business and manufacturing sites as well as air-, sea-, road- and rail freight movement in both provinces. 
  • The Port of Durban, one of Africa’s busiest seaports, has been reporting operational disruptions at all of its terminals since July 12, and continues to be impacted by staff shortages and Transnet has yet to restart a key rail line; operations at the nearby Port of Richards Bay were temporarily shut, but have since largely normalized.
  • Road freight movement has been severely impacted with key trade routes, most notably the N3 highway connecting the Port of Durban to Johannesburg, being blocked and dozens of cargo trucks torched.
  • A number of companies announced production impacts as they struggled to move goods in and out of their facilities or keep their workers safe amid the unrest.  
  • Looting and break-ins have been particularly widespread, with hundreds of stores, distribution centers, and warehouses in both provinces being targeted by rioters; large amounts of goods, such as medical supplies, electronic appliances, and clothing have been stolen.
  • As of July 16, protests begun to subside in Gauteng, but tensions remained high in KwaZulu-Natal and further disruptions to supply chain flows across South Africa and beyond remain possible in the days to come.
  • With significant damages to infrastructure, businesses, and cargo trucks, some long-term effects on supply chain flows across South Africa should also be anticipated in the coming months.

On July 7, protests began to break out across South Africa’s eastern province of KwaZulu-Natal after the country’s former president Jacob Zuma was taken into custody to begin a 15-month jail sentence for contempt of court following his refusal to attend a corruption inquiry. The discontent of Zuma’s supporters quickly spread to South Africa’s economic hub, the Gauteng Province, and has since turned into riots and widespread looting that is considered the worst outbreak of violence since the end of Apartheid in the early 1990s. While Zuma’s arrest caused the initial outbreak of protests, the ongoing unrest has been fueled by years of economic disparities, rising unemployment rates, and a lack of service provisions by the government, all of which have been further exacerbated during the global COVID-19 pandemic. 

Most of the unrest has been concentrated in the provinces of KwaZulu-Natal and Gauteng, where disruptions to the movement of goods via air, road, rail, and sea as well as impacts to business and manufacturing operations have been widespread. However, pockets of unrest started to break out in at least two other provinces as police and military troops, which were deployed by the government on July 12 to support the outnumbered police forces, struggled to contain the unrest. More than a week into the protests, the situation has begun to calm down in Gauteng, but tensions remained high in KwaZulu-Natal as of July 15. As such, further disruptions to supply chain flows across South Africa and beyond should be expected as long-simmering social and political tensions continue to erupt.

South Africa unrest
Figure 1: Snapshot of the two most affected provinces and ongoing events in the area. Source: Everstream Analytics.

Riots and looting severely affect South Africa’s main economic hubs

So far, the civil unrest has largely been limited to Zuma’s home province KwaZulu-Natal, where South Africa’s largest container gateway – the Port of Durban – is located, and Gauteng Province, which is home to the country’s biggest city and economic center Johannesburg. Together, both provinces account for roughly half of South Africa’s total economic output. In the past days, highways have been blocked and local businesses, manufacturing sites, and warehouses have been looted or burnt across big cities and smaller towns alike. As key trade routes remain blocked and businesses not yet damaged in the unrest closed down, the movement of goods in and out of the country has been severely disrupted across South Africa and beyond.

Figure 2: Contribution to gross domestic product by province. Source: Bloomberg

Riots cut off key parts of South Africa’s road network

The unrest quickly resulted in disruptions to road freight traffic, which moves around 80 percent of goods across South Africa,[i] with some of the country’s key trade routes being cut off due to road blockades. Most notably, the N3 highway, which links the Port of Durban to Johannesburg and serves as a starting point for cross-regional trucking routes reaching as far as the Democratic Republic of the Congo, was closed on July 10 after several trucks were burned along the road. Although portions between Harrismith and Heidelberg were reopened on July 14, the movement of vehicles remained disrupted along other sections until the morning of July 16, and further delays should be expected due to higher traffic volumes following the reopening. The Government of neighboring Botswana has also advised its truck drivers to consider alternative routes to avoid the protest areas until further notice, likely further exacerbating delivery delays far beyond the borders of South Africa. Similarly, delays were reported at the Beitbridge border crossing with Zimbabwe during the unrest due to the closure of some truck companies in South Africa, which affected the proper documentation needed to cross the border. According to estimates by the Road Freight Association, more than 30 trucks have been destroyed so far, costing logistics companies around R300 million (EUR 14.7 million / USD 17.1 million).[ii] Meanwhile, the Mozambican Association of Road Transport Operators has claimed that some of the destroyed trucks belonged to Mozambican businesses transporting goods between both countries, but did not disclose any damage estimates.[iii] Industry representatives have warned that it could take the sector months to be fully operational again, even if the riots subside in the coming days.

Figure 3: Affected sections of the N3 highway between Durban and Johannesburg. Source: Bloomberg

Unrest disrupts operations at South Africa’s largest container gateway

Located in the KwaZulu-Natal Province, the current center of the unrest, the Port of Durban, one of Africa’s busiest seaport, has also been directly impacted by the violence. The port has been reporting operational disruptions due to staff shortages since July 12. The MPT Point Terminal, Durban Car Terminal, Pier 1, and Pier 2 all temporarily halted operations for several hours per day, while vessels were effectively unable to berth after mandatory COVID-19 tests could not be carried out due to health services at the port being suspended. As of July 16, the Durban Car Terminal and MPT Point Terminal are operational, but other terminals continue to function with limited resources and further delays should be expected. Just north of Durban, operations were halted at the Richards Bay dry bulk and multi-purpose terminals around July 13 as many members of staff were unable to report to work due to security concerns. However, Transnet confirmed that all shipping backlog had been cleared by the morning of July 16. By July 14, a representative of shipping operator Maersk announced that the company had closed all of its depots, warehouses, and cold stores located in Durban and Johannesburg until further notice, but has yet to activate contingency plans that would cause ships not to call at the Port of Durban. A day later, German shipping company Hapag-Lloyd confirmed that its operations in Durban were impacted, while operations continued with a reduced workforce at Port Elizabeth in the Eastern Cape Province.

Port NameStatus
Port of DurbanOperational, with limited capacity
Port of Richards BayOperational
Port Elizabeth / CoegaOperational, possibly with limited capacity
Port of Cape TownOperational
King Shaka International AirportOperational, possibly with limited capacity
Tambo International AirportOperational, possibly with limited capacity
Figure 4: Status of some air- and seaports in South Africa. Source: Everstream Analytics

A couple of days into the unrest, air freight operations in and out of the affected regions began to face disruptions. While the King Shaka International Airport in Durban shut down completely on July 13, the Tambo International Airport in Johannesburg has only been able to operate at limited capacity as its staff was struggling to access airport premises amid the unrest. At the time of writing, sources suggest that flight operations were beginning to normalize, but further disruptions and cargo backlogs remain possible as tensions in both provinces continue to simmer.

Warehouses and production sites face looting and destruction amid riots

Throughout the unrest, manufacturing sites and warehouses quickly became targets for looters and rioters across KwaZulu-Natal and Gauteng. LG Electronics confirmed on July 12 that its factory in Durban was set ablaze after its manufacturing and distribution facilities were looted by rioters. An unspecified chemicals factory was also set on fire near Umhlanga, a town north of Durban, but no damage estimates have been released yet. Other production shutdowns were announced in sectors such as automotive, oil and gas, and paper manufacturing as companies struggled to transport goods and keep their workers safe.

Figure 5: Snapshot of production disruptions reported as of July 16. Source: Everstream Analytics

Additionally, a series of force majeure declarations have been announced since the unrest began, impacting some of the country’s biggest companies, including South Africa’s largest primary steel producer ArcelorMittal South Africa and its largest crude oil refinery run by Shell and BP South African Petroleum Refineries Ltd. Meanwhile, Glencore, one of the world’s largest integrated producers and marketers of commodities, has warned that it may be forced to declare force majeure as well if unrest persists, potentially affecting the company’s exports to cobalt, chrome ore, ferro-chrome, manganese ore, and vanadium customers. Lastly, Transnet SOC Ltd, a rail, port, and pipeline operator had to declare force majeure on its Natcor rail line, which moves hundreds of tons of cargo such as fuel, wheat, fruit, mining output, and vehicles between Durban and the Gauteng province every week on July 14 after its services were heavily impacted during the unrest, with services still suspended on July 16 as clean-up operations continue. Attempts to maintain or restart production as well as transport finished goods in and out of manufacturing sites may be further hampered by possible fuel shortages in the coming weeks after pipelines transporting fuel from South Africa’s coastal regions were shut off.

Looting and break-ins have been particularly widespread, with hundreds of stores, distribution centers, and warehouses in both provinces being targeted by rioters. Medical supplies, electronic goods, clothing, liquor, and food have been stolen from more than 800 facilities, with damage estimates possibly amounting to more than R5 billion (USD 285 million; EUR 245 million) for the retail industry alone. Affected companies reportedly include retailers Massmart Holdings Limited, Clicks Group Limited, Cashbuild Limited, and Mr Price Group Limited.[iv], [v] Some have warned that the thefts could also result in severe shortages of goods such as medicine and food as transport routes to resupply stocks remain closed. 

Disruptions to freight movement and business operations likely to worsen in days to come

At the time of writing, the widespread unrest began to subside in parts of South Africa, but tensions remain high in both provinces as underlying social and political conflicts continue to simmer. Further impacts on manufacturing and the movement of goods should be anticipated in the days to come as outbreaks of violence remain possible and clean-up operations get underway.

Although President Cyril Ramaphosa has pledged to restore calm in the affected areas and called on protesters to abstain from violence and looting, former President Zuma and his associates have done little to de-escalate the situation, with members of his family and his foundation publicly endorsing the unrest. As of July 16, around 10,000 soldiers have been deployed, while the government is looking into activating up to 25,000 troops to maintain calm in the country. However, violent confrontations between rioters and security forces risk further solidifying some people’s beliefs that Zuma and his supporters are the targets of a politically motivated campaign, which could trigger even more unrest.  

While representatives of the agricultural sector have warned that producers were already beginning to feel the impact of freight disruptions just days into the unrest, those doing business in the mining sector continue to monitor the situation as long-term disruptions could affect shipments of metals and alloys such as manganese ore, chrome ore, or cobalt. Although no major impacts have been reported yet, the automotive industry remains vulnerable to disruptions as well due to its reliance on the Port of Durban, which serves as one of the biggest seaports for both imports and exports in the region for the industry. Prolonged unrest could not only cause severe damages to South Africa’s domestic freight and business operations, it could also lead to knock-on effects in economies of neighboring countries such as Mozambique, Zimbabwe, or Namibia that depend on doing business with companies in South Africa or use its seaports to import and export goods. Others have pointed out that lasting unrest could shake the faith of foreign investors, and result in market share being shifted to other countries that offer greater stability and predictability.

Beyond economic damages in the region, some also fear that mass gatherings amid protests and lootings could further worsen infection rates of COVID-19 in a country that was still struggling to get its vaccination campaign off the ground shortly before the unrest broke out, triggering additional economic hardships in the weeks and months to come.

Those doing business in South Africa, particularly in the provinces of Gauteng and KwaZulu-Natal, should anticipate further disruptions to the movement of goods as well as manufacturing operations in both regions and beyond until the situation can be de-escalated. Customers are also recommended to keep abreast of the latest political and security developments in the country and to get in touch with local carriers and suppliers to assess business continuity plans for logistics and supply.

[i]West, Edward. “Freight transport in Gauteng and KwaZulu-Natal grinds to a halt.” IOL, July 15, 2021.

[ii] Regchand, Sharika. “Cost of unrest action to total logistics supply chain amounts to ‘billions’.” News24, July 14, 2021.

[iii] Unknown. “Mozambique: South African Rioters Loot and Torch Mozambican Trucks.” All Africa, July 14, 2021.

[iv] Unknown. “ Economic impact of riots and looting in South Africa and wider emerging problems.” Businesstech, July 15, 2021.

[v] Henderson, Roxanne and Naidoo, Prinesha. “Stores Close Across South Africa as Violent Riots Intensify.” Bloomberg, July 12, 2021.

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