Logistics costs in South Africa consume more than 50% of the value of the country’s physical economy – the roughly 800 million tons of goods that physically move through the economy every year.
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On average, more than half of all commodities’ value disappears into logistics. This thing doesn’t work. And that’s not rhetorical flourish. It’s data.
And our biggest catastrophe is rail, which no-one is fixing fast enough. While bulk commodity lines, manganese in particular, have shown recovery, general freight rail volumes continued to decline last year, despite the significant work of the national logistics crisis committee and the arrival of new Transnet leadership.
The recovery, where it exists, is sluggish and concentrated entirely in bulk. Containers are not moving. This matters enormously because of a target that hangs over the entire sector: Minister of Transport Barbara Creecy’s goal of 250 million tons on rail by 2029.
Roughly half of what is still missing to reach that target will have to come from containers, or it will not come at all. We need to solve this problem on containers.
This is the platform on which this is going to be solved, or you, minister, are going to miss your target. This is not a political provocation. It is arithmetic.
I have spent over two decades building the intellectual case for spatial logistics planning, organising freight movement around hubs, freight villages and consolidation centres, rather than letting the country’s awkward geography dictate ever-rising costs.
South Africa’s economic heartland sits 600km from its primary port. This distance is not going away, but its cost can be dramatically reduced via intelligent intermodal infrastructure.
My team identified 15 years ago the “missing rail link” – the DC-to-DC corridor connecting manufacturer to retailer via rail. I’m still using that same slide in presentations, because the solution still hasn’t been built.
My prescription: rebuild the general freight rail network, develop freight villages along key corridors and plan for the domestic intermodal container market – a segment which is double the size of the international container market and almost entirely untapped.
India’s first two freight villages, as conceived and proposed by the World Bank, are under construction in Varanasi and Kolkata.
In our case, the Durban-Gauteng corridor is the obvious priority: a quarter of South Africa’s total national logistics cost sits on that one route. SA must become a regional container hub or risk being bypassed entirely.
Ultra-large container vessels (ULCVs) carry more than 24 000 TEUs (standard cargo containers), with Durban’s capabilities terminating at the 13 500 TEU mark. Shipping lines can only route ULCVs to accommodating ports, with Durban missing the cut.
The north-south corridor is being replaced by east-west trade flows. Dar es Salaam is expanding at a pace, while the Nacala-Lobito and Maputo-Walvis Bay corridors are already preferred routes.
South Africa predicted these shifts 15 years ago. Both South Africa and Durban largely stood by as it materialised. This put South Africa and Durban at risk.
The Southern African Development Community needs eastwest corridors. SA must decisively redefine Durban’s role or risk being sidelined.
Besides targeting the Port of Ngqura, known as Coega Harbour, the solution is to reconfigure Durban substantially to handle these vessels, use it as the sub-Saharan redistribution hub – it already handles 22% of all sub-Saharan boxes – and develop extended gate infrastructure, including new inland dry ports near Johannesburg to effectively expand port capacity without building into the sea.
South Africa wastes R100 billion annually through poor last-mile and long-haul logistics planning. This is not a projection of potential gain, it is a measure of ongoing loss, money that leaves the economy every year because freight moves inefficiently, containers sit idle and roads carry freight that should be on trains.
The newly formed Container User Forum can help close the “integrative gap”- the space between knowing what needs to be done and coordinating the actors required to do it. It has been done in the bulk sector, through the Richards Bay Coal Terminal and the Iron Ore Users Forum.
The container sector has lacked an equivalent body, until now. As a matter of urgency, though, we need to rebuild the rail network, develop a national spatial plan for freight villages and implement collaborative container fleet planning.
These are not abstract policy wishes. They are actionable, sequenced and supported by two decades of modelling.