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Home»Economics»Slow Progress on South Africa’s Logistics Reforms
Economics

Slow Progress on South Africa’s Logistics Reforms

By CharlotteJuly 29, 20263 Mins Read
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Speedier implementation could boost the country as a regional trade gateway.

Freight rail and port reforms being implemented by South Africa can boost the country’s role as a trade gateway between Africa and the Middle East, a key Southern African export and source market for commodities, including minerals, fertilizers, and fuel.

South Africa launched logistics reforms in 2020 to prop up an economy dragged down by freight rail, port, and electricity supply logjams. President Cyril Ramaphosa’s (pictured) administration recently issued a progress report, noting that reforms in the key freight-rail sector are underway but moving slowly. 

Boosting Regional Trade Competitiveness

There’s every reason to speed up the process, said Lerato Mzezewa, senior operational risk analyst at Fitch Group’s BMI advisory. Accelerated and effective implementation of freight rail reforms can “improve the movement of Gulf-sourced inputs into South Africa and the wider Southern Africa region while helping exporters move bulk, refrigerated, and containerized” cargo, she said.

“This would strengthen South Africa’s competitiveness as a trade gateway, particularly for firms that require dependable port logistics and inland distribution alongside maritime capacity,” she added. “South Africa’s revived freight rail and port infrastructure will support South Africa-Middle East trade by improving the domestic movement of seaborne cargo between ports, inland production centers, and end users.”

Gulf markets accounted for about 11% of South Africa’s total imports in 2025, totaling approximately $11.6 billion; the Gulf supplied 60% of the country’s crude and refined petroleum imports.

Private Operators Step In

As part of the reform process, South Africa recently finalized contracts with 11 private rail operators. Opening core rail corridors to third-party private-sector players strengthens “the investment proposition by shifting rail recovery away from sole public-sector dependence toward a more competitive, multi-operator” environment, said Matteo Addonizio, head of infrastructure research at BMI. 

The moves aim to attract sustained private capital investment in the freight rail sector and support the medium-term recovery of freight rail volumes. The new operators are expected to move an additional 24 million tons of freight rail capacity across coal, manganese, containers, fuel, and general freight. Freight rail volumes rose to about 168 million tons in 2025 from 160.1 million tons in 2024. However, this remains below the 200 million tons of capacity required to improve transport logistics for South African freight rail users.

South Africa’s freight rail and port inefficiencies have significantly affected heavy freight movers, including bulk commodity miners like Kumba Iron Ore, which ships key steelmaking ingredients to China and the Middle East.

Kumba has had to reconfigure its business to “align production more closely with Transnet’s constrained rail” and port capacity, according to a company spokesperson. “Aging infrastructure and inadequate maintenance practices impact the reliability and efficiency of logistics channels, which directly impacts our operations.”

Logistics inefficiencies are not South Africa’s only vulnerability.

The regional powerhouse is also vulnerable to global fuel price fluctuations stemming from the war in Iran, whose effects continue to ripple through supply chains and cost ecosystems across the continent. An overreliance on imported crude oil and refined fuels, alongside a freight system that moves roughly 80% of goods by road, compounds South Africa’s situation, said Jee-A van der Linde, senior economist at Oxford Economics Africa.

Tawanda Karambo is a contributing writer based in South Africa.



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