Transport Minister Unveils Bold Reforms to Revive Freight Rail Sector

South Africa’s Minister of Transport, Barbara Creecy, has announced a series of critical reforms aimed at reviving the country’s underperforming logistics and freight rail sector. Over the past few years, inefficiencies in the rail network have placed a heavy burden on the economy, costing as much as R1 billion daily, according to recent media reports. The government, together with key stakeholders, is now focusing on addressing these challenges to restore the sector to its full potential.

Addressing the Crisis

Creecy, speaking at the Rand Merchant Bank Think Summit 2025 in Johannesburg, revealed that the government is actively working with the private sector to improve the country’s rail and port logistics systems. She highlighted Transnet’s recent move to issue a R17 billion concession contract to five private sector partners, with the aim of funding, constructing, and operating liquid bulk terminals at the Port of Richards Bay. This initiative is part of a broader strategy to tackle bottlenecks and inefficiencies, and to improve the long-term sustainability of South Africa’s logistics infrastructure.

Transnet, the state-owned transport company, has made significant progress in its efforts to enhance the country’s freight corridor infrastructure. According to Creecy, business and Transnet have been collaborating to improve maintenance and security on key freight corridors, with a view to boosting investment in the rail network. In the short term, the government is focused on finding mechanisms that can continue to attract private sector investment while the long-term reform agenda takes shape.

Creecy noted that Transnet would also submit bids to the National Treasury’s budget facility for infrastructure, specifically aimed at the maintenance and refurbishment of the national rail network and selected terminals. This approach is aligned with the goal of stabilizing port and rail volumes, which remain a challenge despite recent improvements.

Progress in Freight Volumes and Equipment Refurbishment

One of the key successes highlighted by Creecy is the increase in freight volumes to 161 million tons per annum as of March 2025. While this still falls short of the target of 220 million tons by 2030, the increase represents a positive trend and indicates that the recovery plan is gaining momentum. Transnet has also rolled out a comprehensive recovery plan aimed at stabilizing freight volumes and improving the efficiency of South Africa’s logistics network.

As part of this recovery initiative, Transnet has established “war rooms” for specific corridors and commodities. These dedicated task forces enable Transnet and its private sector partners to collaborate and share expertise to address logistical challenges such as derailments and unplanned maintenance. Moreover, the replacement and refurbishment of critical port equipment, including cranes, rubber-tyred gantry (RTG) cranes, straddles, and haulers, is underway. This has led to significant improvements in port operations, including reduced ship waiting times and shorter truck queuing times.

Creecy praised the ongoing collaboration with original equipment manufacturers, which has ensured the availability of spare parts for essential machinery. This cooperation has resulted in tangible improvements in port operations, contributing to a smoother logistics experience for both domestic and international trade.

Collaborative Efforts in Cape Town and Richards Bay

In Cape Town, the close cooperation between Transnet, fruit growers, and other logistics stakeholders has led to the eradication of delays that plagued the port last year. Despite an increase in wind stoppages this year, the port is meeting its shipping plans, with no vessels waiting to berth due to operational inefficiencies. This is a significant achievement, as it highlights the positive impact of stakeholder collaboration on operational outcomes.

Meanwhile, at the Port of Richards Bay, a truck holding facility has been established in collaboration with the local municipality. This initiative has alleviated congestion on the N2 and surrounding roads, facilitating smoother access to the port. The truck holding facility is part of a broader effort to tackle logistical bottlenecks and improve the efficiency of the country’s freight transport system.

National Logistics Crisis Committee and Policy Developments

In 2023, the South African government, together with the private sector, established the National Logistics Crisis Committee (NLCC) to focus on urgent action to improve the performance of Transnet’s rail and port network. The NLCC has prioritized several critical areas, including enhancing the performance of key freight logistics rail corridors, addressing congestion at strategic border crossings, and tackling maintenance backlogs. These initiatives are complemented by efforts to combat cable theft, which has long been a problem for the sector.

At the policy level, interventions in the logistics sector are guided by the National Rail Policy of 2022 and the National Freight Logistics Roadmap of 2023. The National Rail Policy is particularly noteworthy, as it enables the introduction of open access to the rail network and encourages private sector participation. This shift aims to foster competition, which in turn will improve the quality and efficiency of rail services, reduce transportation costs, and maintain state ownership of the network.

Plans for Private Sector Involvement and New RFIs

Another critical development in the rail sector is the release of the Request for Information (RFI) on five key rail and port corridors. This RFI is designed to gather information from stakeholders in the rail and port logistics sector to inform the development of Requests for Proposals (RFPs) that Transnet plans to issue by August 2025. In June, the government plans to issue an RFI for passenger rail, covering areas such as signaling, depots, rolling stock, and high-speed rail corridors. The information collected will be used by the Passenger Rail Agency of South Africa (PRASA) to issue RFPs in October 2025.

These developments represent a major shift in South Africa’s approach to rail and port logistics, as the government continues to work closely with the private sector to enhance the country’s infrastructure and attract long-term investment. While challenges remain, the recent reforms and the commitment to improving the efficiency of the logistics sector offer a hopeful outlook for South Africa’s transport and freight industry.