Transport Minister Barbara Creecy has announced the South African government’s plans to rejuvenate the logistics sector as a pivotal component of the country’s economic growth strategy. She outlined these initiatives at the launch of the World Bank’s report, “Driving Inclusive Growth in South Africa: Quick Wins with Competitive Markets and Efficient Institutions.” The report provides strategies to boost market competition and institutional efficiency to strengthen the national economy.
Logistics Crisis Management
To address the challenges in the logistics sector, the government has established the National Logistics Crisis Committee (NLCC), which includes representatives from the Presidency, various government departments, and the private sector. The NLCC’s mandate involves securing key logistics corridors vital for export and economic growth, tackling backlogs and congestion at critical border crossings, easing congestion on national highways like the N1 and N3, and mitigating issues such as cable theft and maintenance backlogs at Transnet.
“This collaboration has led to modest improvements in our logistics performance,” said Creecy.
Freight and Rail Sector Goals
The Department of Transport and Transnet have set a target to increase freight movement on the Transnet network from 150 million tonnes in the 2023/24 financial year to at least 250 million tonnes by 2030. Central to this goal is the revitalization of the rail sector, which began with the Cabinet’s approval of the White Paper on National Rail Policy in March 2022.
The Rail Policy introduces structural reforms aimed at promoting private sector investment, maximizing the rail network’s use, and implementing robust economic regulation to ensure equitable access and proper management. A Private Sector Participation (PSP) Unit, being developed in collaboration with the Development Bank of Southern Africa, will facilitate and coordinate private investments in critical rail projects.
Investment Opportunities
The department is currently issuing Requests for Information (RFIs) to gauge potential investment interest in the rail and port sectors. This initiative aims to share project information with the public and collect insights on opportunities for third-party involvement.
Creecy stressed that all rail and port infrastructure will remain under government ownership. She also highlighted ongoing consultations with organized labor to refine the freight logistics roadmap. “We cannot continue with the status quo, where derailments and port blockages cost our economy billions of rands and put thousands of jobs at risk,” she said.
Enhancing Port Efficiency
Addressing port inefficiencies, Creecy noted that Transnet has launched a recovery plan to boost and stabilize port and rail volumes. War rooms for specific corridors and commodities have enabled collaboration between Transnet and the private sector, focusing on derailments and unplanned maintenance.
The recovery plan includes short-, medium-, and long-term investments in replacing and refurbishing critical port infrastructure like cranes, gantries, and straddles. Collaboration with original equipment manufacturers (OEMs) has ensured the availability of spare parts for essential machinery, contributing to reduced ship waiting times and improved truck queue management.
Achieving Ambitious Targets
Creecy reiterated the government’s commitment to achieving the logistics sector’s targets, aiming to restore performance to pre-pandemic levels. The goal is to move 250 million tonnes of freight annually on the Transnet network by 2030 and to enhance crane moves per hour at ports from the 2024 average of 16 to 30 by 2030.
“Meeting these ambitious targets will require significant private and public investments in infrastructure, rolling stock, and digital systems. Success depends on a strong partnership between government and the private sector, leveraging technical expertise, global best practices, and shared funding,” she concluded.
