Why logistics matters more than ever for South Africa’s economy

South Africa’s trade, transport and logistics systems are not operational sidelines, but core economic infrastructure, determining whether growth is enabled, constrained or systematically undermined. That’s according to DR JACOB VAN RENSBURG…

Trade, transport and logistics (TTL) in South Africa are often discussed in operational terms: cargo shipped, vessels delayed, trains derailed, terminals congested, tariffs adjusted. Yet, at a more fundamental level, TTL systems are economic infrastructure. They are the connective tissue through which production meets consumption, through which comparative advantage is realised and through which economic growth and development are either enabled or constrained.

This distinction matters. In global literature on logistics performance and trade outcomes, a consistent empirical result has emerged: improvements in logistics performance yield growth dividends that far exceed their direct cost. A fundamental economic multiplier is present here.

Conversely, persistent logistics inefficiencies act as a structural tax on the economy, compounding over time. Logistics, in this sense, behaves less like a sector and more like a platform – one upon which the rest of the economy either stands firmly or stumbles. Logistics, indeed, touches all economic activity.

A world defined by uncertainty, not equilibrium

The global trade and logistics environment over the past few years has moved decisively away from notions of equilibrium and predictability. Instead, uncertainty has become the dominant structural condition.

At a geopolitical level, 2025 underscored how quickly trade routes, energy markets and supply chains can be destabilised. Conflict in and around the Red Sea has disrupted one of the world’s most critical maritime corridors, while tentative ceasefires have left shipping lines navigating between risk mitigation and service restoration. The Suez Canal – once assumed to be a stable artery of global trade – has become variable rather than constant.

Energy markets, too, remain exposed. Uncertainty around global oil trade, shifting alliances and political volatility in oil-producing regions continues to feed through into bunker costs, freight rates and inflationary pressures. Even seemingly distant geopolitical events – from heightened rhetoric around Greenland’s strategic value to political instability in parts of Latin America – ripple through insurance markets, risk premiums and routing decisions. Although South Africa is not actively involved in these developments (for example, trade with Venezuela is incidental rather than structural), second- and third-order effects will undoubtedly reach our shores.

Overlaid on this is a renewed era of tariffs and trade frictions. The escalation of tariff measures, particularly between the United States and China, has reintroduced a degree of policy-driven fragmentation into global trade that many firms had assumed was behind them. Supply chains optimised for cost efficiency are now being re-evaluated through the lenses of resilience, redundancy and political alignment.

Yet amid this volatility, the global logistics system has also demonstrated resilience. Air cargo, for instance, performed better than expected, buoyed by e-commerce, perishables and high-value goods – a trend from which South Africa has also benefited. Airlines, by many accounts, ended the year stronger than anticipated. Schedule reliability, while still imperfect, improved in several trades, even as order books for vessels and aircraft reached record levels.

The global picture, then, is not one of collapse but of constant firefighting – both physical and metaphysical. Logistics operators are no longer simply moving goods; they are continuously managing risk in a world where yesterday’s assumptions no longer apply.

South Africa: from crisis narrative to cautious reconfiguration

Against this backdrop, South Africa’s logistics story has begun to shift – not towards triumphalism, but towards cautious credibility.

Only a year ago, the prevailing narrative was one of systemic failure: ports underperforming, rail volumes collapsing, infrastructure ageing and confidence eroding. These critiques were not unfounded. Measured against historical benchmarks, many key performance indicators had fallen well below pre-pandemic levels, and the economic cost of logistics inefficiency was increasingly visible in trade statistics, inflation data and business sentiment.

What has changed since then is not that the problems have disappeared, but that the response has become more coherent. A necessary evolution is underway in the restructuring of South Africa’s logistics network. The policy direction – particularly around private sector participation, concessioning and the reconfiguration of roles between the state and private operators – has moved from abstract debate to implementation. Work undertaken through the Department of Transport’s (DoT’s) private sector participation unit – including requests for information and requests for qualifications across rail, ports and associated infrastructure – signals a shift from rhetoric to architecture.

At its core, this evolution recognises a simple but often resisted truth: no modern, high-volume logistics system operates effectively without a clear separation – and alignment – between who owns infrastructure, who operates it, who regulates it and who uses it. Where these functions blur, inefficiency follows.

The Durban Gateway Terminal: a symbolic and practical milestone

Perhaps the most visible manifestation of this shift is the establishment of the Durban Gateway Terminal, following the joint venture between Transnet and International Container Terminal Services – with Transnet retaining a majority share.

Beyond the technicalities of shareholding structures, the significance of the Durban Gateway Terminal lies in what it represents. It marks a tangible break from a closed operational model towards a hybrid framework that blends public ownership with private operational expertise, performance incentives and global benchmarking.

That this development attracted positive attention in international supply chain media is not incidental. In a year-end review by The Loadstar – framed around “the good, the bad and the ugly” of global supply chains – South Africa was cited as a rare global “win”. Such recognition, particularly in a media environment not known for generosity, signals how far the country has come in restoring credibility to its reform agenda.

Symbolically, the Durban Gateway Terminal functions as a proof point. Practically, it introduces new expectations around throughput, reliability, labour integration, technology adoption and accountability. Importantly, it also resets the reference frame against which future concessions and partnerships will be judged.

The road ahead: integration, speed and governance

Milestones, however, are not destinations. The more demanding phase now lies ahead.

South Africa’s domestic freight task is enormous, growing and structurally skewed towards road transport. Meeting this demand sustainably requires a genuinely synchro-modal approach – one in which road, rail, ports and air cargo are orchestrated as an integrated system rather than competing silos. This is not merely a technical challenge; it is an institutional one.

A shift from road to rail, long acknowledged as necessary, cannot be achieved through exhortation alone. It requires reliable service, predictable pricing, fit-for-purpose infrastructure and aligned incentives across the supply chain. Similarly, the development of freight villages and logistics hubs must move beyond conceptual diagrams towards operational reality, creating seamless touchpoints where cargo can transition efficiently between modes.

Throughput speed at port terminals remains a central constraint. Here, the familiar quartet applies: infrastructure, technology, processes and people. Investment in equipment and digital systems is necessary, but insufficient without process redesign and skills development. Technology must function as an enabler, not an overlay – integrated into planning, execution and performance measurement rather than bolted on as an afterthought.

In the weekly Business Unity South Africa (BUSA) and South African Association of Freight Forwarders (SAAFF) Cargo Movement Reports, a recurring theme emerges: marginal gains matter. A slight improvement in crane productivity, a reduction in truck turnaround time or a modest increase in schedule adherence can collectively unlock disproportionate economic value. Logistics, like a finely tuned orchestra, rewards coordination far more than isolated virtuosity.

A philosophical pause – and a caution

There is a temptation, when progress becomes visible, to declare victory prematurely. South Africa is not yet out of the woods. On most metrics, throughput levels have not fully returned to pre-pandemic records. Systemic resilience remains fragile and global volatility continues to test even the most robust supply chains.

The philosopher Heraclitus famously observed that one never steps into the same river twice. Logistics systems, too, are in constant flux. The challenge is not to restore an imagined past equilibrium, but to build adaptive capacity for a future defined by uncertainty.

South Africa’s recent progress suggests that such capacity is being assembled – slowly, imperfectly, but deliberately. The task now is to sustain momentum, deepen reform and resist complacency. Trade, transport and logistics will not, on their own, deliver economic growth and development. Without them functioning effectively, growth will remain constrained, uneven and vulnerable.

In that sense, logistics reform is less about moving boxes and more about moving the economy – one measured step at a time.