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SOCIAL UNREST = CARGO LOSSES


UNDER ATTACK


Violent attacks and social unrest jeopardize cargo security in South Africa’s economic hubs


Although South Africa is among the three largest economies in Sub-Saharan Africa and is often used as a gateway into the wider region, intermittent attacks on foreign truck drivers and a recent outbreak of severe civil unrest in two key provinces showcase the persistent security threats to the movement of goods in parts of the country.


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


Protests broke out in the eastern province of KwaZulu-Natal in early July after South Africa’s former President Jacob Zuma was taken into custody on July 7 to begin a 15-month jail sentence for contempt of court. The discontent of his supporters quickly spread to one of the country’s most populous regions, the Gauteng Province, and resulted in riots and widespread looting that is now viewed as the worst outbreak of violence in decades.


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 hub Johannesburg


as well as its administrative capital Pretoria, account for roughly half of South Africa’s total economic output together. Although pockets of violence broke out in other parts of the country, most of the unrest remained concentrated in these provinces, where disruptions to the movement of goods as well as impacts to business and manufacturing operations were widespread. For more than a week, protesters blocked key highways and torched cargo trucks, while local businesses, manufacturing sites, warehouses, and distribution centers were looted or burnt down in big cities and smaller towns across both provinces.


Warehouses and production sites face looting and destruction amid riots


Early on, manufacturing sites and warehouses became targets for looters and rioters across KwaZulu-Natal and Gauteng alike. For example, LG Electronics confirmed that its factory in Durban was set ablaze after rioters looted its manufacturing and distribution facilities in the area. Around the same time, the UPL Chemical Plant in Cornubia, a town north of Durban, was torched amid the unrest.


Some of South Africa’s biggest companies, such as its largest primary steel producer


‘Within days, the widespread riots caused severe disruptions to road freight movements along some of the country’s key trade routes as protesters set cargo trucks ablaze and made entire sections impassable.’


ArcelorMittal South Africa, and its largest crude oil refinery run by Shell and BP South African Petroleum Refineries Ltd, announced a series of force majeure declarations as security concerns and blocked transport routes disrupted their operations for several days. Overall, the unrest caused disruptions in a range of industries as manufacturing sites in sectors including oil and gas, automotive, and paper manufacturing were forced to temporarily suspend operations as companies struggled to transport goods in and out of their facilities and keep their workers safe.


Lootings and break-ins such as the one seen at the LG Electronics factory were particularly widespread, with rioters targeting hundreds of stores, distribution centres, and warehouses in both provinces. Easily transportable items, including medical supplies, clothing, liquor, food, and electronic appliances, were particularly affected as goods were stolen from more than 800 facilities. According to initial estimates, financial and structural damages could amount to more than R5 billion (USD 285 million; EUR 245 million) for the retail industry alone. Among the affected companies were some of the country’s major retailers such as Massmart Holdings Limited, Clicks Group Limited, Cashbuild Limited, and Mr. Price Group Limited.


Protesters attack cargo trucks and block key parts of South Africa’s road network


South Africa’s economy relies heavily on road transport, with more than 80% of freight being moved by road and almost half of all road freight being transported along the N3


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