South Africa Strengthens Logistics Sector to Drive Economic Growth

“This collaborative effort has already resulted in modest improvements in logistics performance,” Creecy stated.

The South African government is taking decisive steps to revamp the country’s logistics sector as a fundamental driver of economic prosperity. This commitment was reaffirmed by Transport Minister Barbara Creecy during the launch of the World Bank report, Driving Inclusive Growth in South Africa: Quick Wins with Competitive Markets and Efficient Institutions.

National Logistics Crisis Committee: A Collaborative Approach

To tackle existing inefficiencies, the government has established the National Logistics Crisis Committee (NLCC), which comprises representatives from the Presidency, key government departments, and private sector stakeholders.

Key objectives of the NLCC include:

• Securing strategic logistics corridors to facilitate essential commodity exports and economic growth.
• Addressing congestion and backlogs at major border crossings.
• Combatting inefficiencies in critical highway corridors, such as the N1 and N3.
• Implementing measures to curb cable theft and maintenance delays at Transnet.

“This collaborative effort has already resulted in modest improvements in logistics performance,” Creecy stated.

Freight Transport Targets and Rail Sector Rejuvenation

The government has set ambitious goals for freight transportation, aiming to increase cargo movement on Transnet’s network from 150 million tonnes in 2023/24 to 250 million tonnes by 2030.

A key driver of this plan is the revitalization of the rail sector, initiated with the Cabinet’s approval of the White Paper on National Rail Policy in March 2022. This policy introduces structural reforms to:

• Encourage private sector investment in rail infrastructure.
• Optimize the utilization of the national rail network.
• Establish an effective economic regulatory framework for equitable access to rail services.

To support private sector involvement, a Private Sector Participation (PSP) Unit is being developed in collaboration with the Development Bank of Southern Africa (DBSA). This unit will coordinate investments in key rail projects requiring capital input.

Additionally, the Department of Transport has initiated Requests for Information (RFI) to gauge interest from potential investors in the rail and port sectors.

“We want to emphasize that throughout this process, all rail and port infrastructure will remain under government ownership,” Creecy reassured stakeholders. “We are also engaging organized labor to align on the details of our freight logistics roadmap.”

Port Efficiency: A Roadmap to Recovery

Recognizing inefficiencies in South Africa’s ports, Transnet has launched a Recovery Plan to enhance and stabilize operations. This includes:

• Establishing war rooms for key corridors and commodities, allowing for collaboration with the private sector to address derailments and maintenance issues.
• Replacing and refurbishing critical port infrastructure, including cranes, gantries, and straddles.
• Strengthening partnerships with Original Equipment Manufacturers (OEMs) to ensure the availability of spare parts for essential machinery.

These initiatives have already yielded significant improvements, reducing ship waiting times and truck queuing periods at ports.

Future Goals and Investment Strategies

The South African government is committed to achieving the following logistics targets by 2030:

• Freight Movement: Increase Transnet network capacity to 250 million tonnes per year.
• Port Efficiency: Improve gross crane moves per hour from an average of 16 in 2024 to 30.

Achieving these goals will require substantial investment in:

• Infrastructure
• Rolling stock
• Digital transformation systems

“These ambitious targets cannot be realized within the existing Transnet system alone,” Creecy emphasized. “A strong public-private partnership is essential, leveraging technical expertise, global best practices, and shared investment to create a world-class logistics sector.”

A Pathway to Economic Growth

The South African government’s renewed focus on logistics is expected to reduce bottlenecks, enhance trade efficiency, and stimulate economic growth. With a combination of government oversight and private sector collaboration, South Africa’s logistics sector is on track to become a robust enabler of national prosperity.