Transnet results: cautious optimism, but realities remain

Transnet’s latest results suggest long-awaited progress in stabilising operations. But with debt still mounting and structural reforms unresolved, freight forwarders are balancing optimism with hard-nosed realism, as JULIA TEW reports.

When Transnet released its 2025 year-end financial results in early October, the Southern Africa Association of Freight Forwarders (SAAFF) surprised many by striking a positive tone in its response. “For the first time in years, throughput performance across all major sectors showed improvement, reflecting progress in stabilising operations. Evidence suggests the downward spiral has been arrested,” the organisation said in its press release. For an industry battered by inefficiencies, disruptions, and infrastructure decline, this was welcome news.

But optimism in South Africa’s freight and logistics sector has always been of the cautious variety. Debt, governance failures, and systemic challenges still cast a long shadow over Transnet’s ability to support efficient trade. 

Mineral exporters Kumba Iron Ore and Thungela Resources are just two of the companies that have been forced to curtail production as a result of these shortcomings. For freight forwarders – who depend heavily on the parastatal’s infrastructure and reliability – progress may be real, but so too are the constraints.

WHAT’S GOING RIGHT

SAAFF is correct to point out that operational performance has improved. Port throughput is stabilising, delays have been reduced in certain corridors, and incremental gains in rail volumes are being reported. For freight forwarders, even small efficiency improvements ripple positively across the supply chain: reduced dwell times at some ports mean quicker clearances, more predictable scheduling, and lower costs for clients.

Another reason for cautious optimism is the shift in tone from Transnet’s leadership. A greater willingness to engage with private operators, pursue partnerships, and act on long-standing inefficiencies signals recognition that the organisation cannot solve its problems in isolation. 

“We are having robust conversations with our customers and constructive engagements, as we want things to work,” said Transnet group CEO Michelle Phillips at the results event. “Interactions in the Logistics Crisis Committee are going very well.” 

SAAFF agrees that “industry-government collaboration is the cornerstone for recovery”. Examples supporting this collaborative approach include the 10-year partnership agreement Transnet Port Terminals recently concluded with Liebherr to acquire port equipment, and the multi-stakeholder approach to the environmental impact assessment process adopted for the proposed expansion of container-handling facilities at Durban Port.

THE HARD NUMBERS

Optimism must, however, be measured against financial reality. Transnet remains burdened with debt and irregular expenditure. According to transport economist and FOCUS contributor Nick Porée, the parastatal’s debt is estimated at R135 billion, with contingent liabilities and Treasury support pushing the exposure significantly higher. 

Even assuming Transnet generates R10-15 billion annually over five years, Porée argues, the maths simply doesn’t add up. The organisation’s cash flow is insufficient to both service this debt and fund the infrastructure rehabilitation so urgently required.

This raises uncomfortable questions about sustainability. If Transnet cannot meet its financial obligations while also modernising, the risk of continued reliance on state bailouts looms large – an option that may be less feasible as the Department of Transport itself warns that government finances are overstretched.

STRUCTURAL MYTHS, MARKET REALITIES

Another issue is the often touted vision of a large-scale modal shift from road to rail. For decades, South African policymakers have promised that rail will take trucks off the country’s congested roads. But Porée is among those who argue that this vision is, at least in part, a “mythtake”. 

Only modest tonnages – such as 15 million tonnes of bulk and 20 million tonnes of breakbulk – are realistically transferable to rail. Many modern freight flows, fragmented and time-sensitive, are better suited to road, which offers flexibility and speed that rail cannot match in its current form.

This doesn’t mean rail has no role to play. Bulk commodities and long-distance freight corridors such as the proposed iron ore line remain ideal for rail, serving as conveyor belts to the ports. Supporting this belief is Minerals Council South Africa CEO Mzila Mthenjane. He told delegates at the recent Africa Down Under conference in Perth that the logistics reform process was gaining traction, evidenced by the 11 private train operators approved to run 41 rail routes in South Africa, including all its major mining corridors. The successful companies will provide an additional 20 million tons of capacity a year over the next five years, Mthenjane estimates.

But the expectation that rail will absorb hundreds of millions of tonnes of cargo is unrealistic, warns Porée, without major structural reform, technological investment, and, critically, competitive pricing.

GOVERNANCE AND REFORM

Perhaps the toughest challenge lies in governance. As Porée bluntly states, many SOE boards, including Transnet’s, remain inflated and unaccountable. Past mismanagement has left scars – both financial and reputational – that industry alone cannot heal. Without greater transparency, accountability, and commercially driven leadership, operational improvements risk being fleeting.

Here, the question of structural reform looms large. Splitting infrastructure management from operations, creating independent regulators, and pursuing long-term concessions with global operators are among the options experts suggest. For freight forwarders, what matters is not the ideology behind reform but the outcomes: reliable, cost-effective services that enable them to compete in global trade.

FREIGHT FORWARDERS: AT THE MERCY OF TRANSNET?

The hard truth is that freight forwarders cannot simply bypass Transnet. Ports, rail, and much of South Africa’s logistics backbone are state owned. Forwarders are therefore directly exposed to Transnet’s weaknesses. Add to that international tariffs, geopolitical instability, and rising fuel costs, and the picture can feel disheartening.

Yet forwarders are not entirely powerless. Their role as coordinators and integrators in the supply chain gives them influence: they are often the first to identify bottlenecks, the loudest voices pushing for reform, and the innovators who find workarounds when systems falter. The growth of digital platforms, supply chain visibility tools, and alternative routing strategies has demonstrated how adaptive the sector can be. Jupiter Mines, for instance, has turned to using road haulage to move manganese from its Tshipi mine and is exporting through East London Port and Namibia’s Port of Lüderitz. 

By collaborating through associations like SAAFF, forwarders can also exert collective pressure, ensuring government hears industry concerns. “Unpredictable, unavoidable volatility reinforces the imperative of strengthening SA’s logistics network and getting our own house in order,” reiterates Dr Jacob van Rensburg, SAAFF’s head of research & development.  

A BALANCED OUTLOOK

Taken together, the picture is one of progress mixed with persistent challenges. SAAFF is right to highlight improvements and the importance of collaboration. But Porée’s analysis is equally important: without deep structural reform, financial discipline, and realistic expectations about rail and port capabilities, the green shoots may wither.

For freight forwarders, the message is clear. While they cannot control Transnet’s governance or the global trade environment, they can remain agile, innovative, and vocal. Collaboration – however slow – does move the needle. And cautious optimism, grounded in realism, may be the most valuable mindset of all.