South Africa Freight and Ports Make Gains, but Crime, Funding, and Infrastructure Issues Slow Recovery
South Africa is making strides toward overhauling its struggling transport systems, but recovery in the logistics sector is being hampered by ongoing challenges, including crime, asset failures, funding constraints, institutional gaps, and port inefficiencies, according to Business Leadership SA (BLSA).
In its Quarterly Review (QR) released on August 12, BLSA commended initiatives such as the 2023 Freight Logistics Roadmap (FLR) and Operation Vulindlela, which aim to support economic reforms and logistics recovery.
However, the review notes that while structural reforms are ambitious, implementation remains uneven, and operational breakdowns continue to restrict exports and hinder economic growth.
The review highlights progress in Transnet’s freight rail unbundling, including the creation of the Transnet Rail Infrastructure Manager (TRIM) in October 2024, led by acting CEO Moshe Motlohi, and the Transnet Freight Rail Operating Company (TFROC) under Russel Baatjies.
Backed by a R47 billion National Treasury guarantee, the split is intended to end Transnet’s integrated monopoly and enable third-party rail access.
TRIM has already made 209 million tonnes of capacity available, attracting 98 slot applications from private operators.
Other milestones include private sector participation (PSP) initiatives funded by the Development Bank of SA and National Treasury, focusing on key corridors such as the Northern Cape, Richards Bay, and Gauteng–Durban intermodal route.
Transnet is also advancing port concessions in Ngqura, Gqeberha, Cape Town, and Richards Bay, including a 25-year liquid bulk concession at Cape Town awarded to FFS Tank Terminals.
Yet challenges remain. Durban Pier 2 privatisation is stalled due to High Court litigation, while overall operational performance remains below targets, with freight volumes reaching 161 million tonnes by March 2025, short of the 170-million-tonne target and well below the FLR’s 193-million-tonne goal.
Additional constraints include:
Crime: Cable theft caused R4 billion in damages in 2024, with 1,300 incidents on the Northern Corridor.
Asset failures: Ageing infrastructure and manual systems leave 394 locomotives idle due to spare parts shortages, a R70 billion fleet management issue.
Funding and institutional gaps: Transnet’s debt is projected at R151 billion in 2025, with R17 billion in annual debt service costs, and limited capacity within the DoT, TRIM, and PSP unit.
Port inefficiency: In the 2024 World Bank Container Port Performance Index, Cape Town ranked last globally (405th), with other South African ports also underperforming.
BLSA concludes that while structural reforms and sector milestones are encouraging, resolving operational, funding, and security challenges is critical to achieving sustainable logistics recovery.
