Transnet Signs 11 Private Operators to Run Freight Rail as South Africa Launches Major Logistics Reform to Boost Exports
Transnet has opened its freight rail network to private operators in the country’s most significant rail reform in decades, aiming to restore efficiency to a logistics system that has long constrained exports and economic growth.
The state-owned logistics group has concluded agreements with 11 private rail operators who will begin running services across key freight corridors linking mines, industrial hubs, and major ports.
Historic shift in rail operations
The reform effectively ends more than a century of exclusive state control over freight rail operations and marks a major structural shift in South Africa’s transport sector.
The private operators will gain access to 41 routes across five major freight corridors transporting coal, iron ore, manganese, fuel, containers, and general cargo.
Among the approved operators are ARC South Africa, Grindrod, TLD Marine, Sharp Logistics, Minrail, Interlinks, and Motheo Logistics, among others.
South Africa manages Africa’s largest freight rail network, spanning more than 20,000 kilometres and connecting key mining and manufacturing regions to export ports.
Addressing a long-standing logistics crisis
The reform comes after years of severe operational challenges, including infrastructure deterioration, cable theft, vandalism, corruption, and chronic underinvestment.
Freight volumes on the rail network have declined significantly over the past decade, forcing exporters to rely more heavily on road transport, which is more expensive and less efficient.
Major mining firms, including Glencore and Kumba Iron Ore, have repeatedly warned that rail bottlenecks have constrained exports even during periods of strong global commodity demand.
Industry estimates suggest that logistics inefficiencies have cost the economy billions in lost export earnings and weakened investor confidence.
Boosting export capacity and economic growth
Transnet said the entry of private operators is expected to add around 24 million tonnes of freight capacity initially, with potential expansion to 52 million tonnes over the next five years.
The government aims to increase annual rail freight volumes from about 180 million tonnes to 250 million tonnes by 2030 as part of broader efforts to strengthen trade competitiveness and economic growth.
Some operators are expected to begin services later this year, while others will phase in operations through 2027.
Several companies are already raising capital to acquire locomotives and wagons, with some investment plans reaching hundreds of millions of dollars.
Investment push and infrastructure reforms
Transnet is also reviving its rolling stock leasing platform, LeaseCo, to lower entry barriers for new operators and improve access to locomotives and wagons.
Transnet Rail Infrastructure Manager CEO Moshe Motlohi described the agreements as a turning point for the sector, noting that the reforms create a more competitive and functional rail market.
Policy debates and industry tensions
Despite strong investor interest, the reforms have sparked debate over procurement policies linked to planned infrastructure upgrades.
Business group Guma has challenged Transnet’s procurement approach for certain rail equipment, arguing that direct engagement with foreign manufacturers could disadvantage local and black-owned firms.
The Black Business Council has also called for greater inclusion of domestic suppliers in state infrastructure projects.
If successfully implemented, the reform could significantly improve South Africa’s export competitiveness by restoring reliability to a rail system that underpins mining, agriculture, and industrial production.
Stakeholders widely view the opening of the network to private operators as one of the most important structural reforms in South Africa’s logistics sector in decades.
