Logistics sector is the backbone of SA’s real economy

South Africa’s relative advantages in road networks, logisticsexpertise and strategic planning should position it to overcome the substantial challenges ahead. (Photo: Supplied)

By Lindsey Schutters

21 Apr 2025

There are three key government initiatives driving change in the economy, and the transport warriors have been ready and waiting.

The electrical, mechanical and structural engineers who design and develop those massive wind turbines sprouting on mountaintops throughout South Africa love to poke fun at the civil engineers responsible for anchoring them to the ground.

But the joke is actually on the logistics industry and its interconnected network of sea and road freight forwarding, which get saddled with the burden of safely getting all the components from all over the world to the final resting place.

Despite its critical role in South Africa’s economy, logistics often operates in the shadows.

“There’s no appreciation for it,” says Nikita Reddy, head of logistics at ESL Freight. She is referring to the challenges the sector faces, particularly with the renewable energy boom exposing gaps in infrastructure for transporting large components.

“We’ve been moving huge loads for hundreds of years. This is nothing new,” Reddy adds, noting the industry’s resilience.

South Africa’s logistics infrastructure has evolved from the continental hub handling specialised mining and resource extraction machinery for the continent, but the need for specialised equipment in a range of budding industries remains critical for the future.

The unsung hero of the energy transition

Logistics expertise in practice South Africa’s relative advantages in road networks, logistics expertise and strategic planning should position it to overcome the substantial challenges ahead. (Photo: Supplied)

As the country accelerates its transition to renewable energy, its logistics infrastructure faces unprecedented challenges. Transporting massive wind turbine components requires specialised equipment, extensive planning and expertise few countries in Africa have.

“Mountaintop is a different conversation,” Reddy says. “With the abnormal loads and the guys who have specialised remote modulated trailers, [the problem is] there are only a handful of them.”

Despite this, the logistics sector has demonstrated remarkable resilience and adaptability. The country’s well-designed road network – spanning more than 22,000km and 18 major highways – provides a solid foundation for the complex transportation requirements of renewable energy projects.

“I feel that South Africa is fairly well equipped for logistics, probably better than most actually realise because the challenges we have are bigger than most areas,” she says, referring to the unique capabilities local logistics companies have developed.

Government’s push for private sector participation

President Cyril Ramaphosa and his administration have recognised that state resources alone cannot meet the infrastructure demands of the country’s energy transition, and a significant portion of his most recent State of the Nation Address was dedicated to this challenge.

“We will mobilise private sector investment in our transmission network to connect more renewable energy to the grid,” Ramaphosa said.

This sentiment has been echoed by Minister of Electricity and Energy Kgosientsho Ramokgopa, who recently announced the Independent Transmission Programme to facilitate private investment in transmission infrastructure. “Our renewable energy assets are not fully exploited as a result of the constraints on the transmission side,” Ramokgopa said.

“The Eskom balance sheet and the sovereign balance sheet are not sufficient to carry the kind of investments that are required in this space.

“In terms of the Transmission Development Plan … we will need to modernise and expand transmission by about 14,000km. And for us to be able to do this, we need about R440-billion.”

He was frank about the lack of money: “The state is not in a position to provide that kind of support. So, we are introducing the Independent Transmission Programme.”

Minister of Forestry, Fisheries and the Environment Dion George has also publicly supported these initiatives, saying Ramokgopa’s “bold move to unlock private investment in transmission lines is exactly what I alluded to – a practical, impactful step to harness our renewable potential and secure a cleaner future for all South Africans”.

Important transport sector reforms

The push for private participation extends beyond the need to clear bottlenecks in the energy sector – the economy-crippling issues at South Africa’s ports and Transnet are well known.

The Transport Ministry launched a request for information seeking private sector engagement in rail and port freight logistics projects in March. “Together with Transnet, the government has received numerous unsolicited proposals from the private sector offering investment, skills and expertise to support the rehabilitation and reform of our struggling rail and port systems,” Transport Minister Barbara Creecy said when it was announced.

Global investment interest

Industry experts have long predicted this shift towards greater private sector involvement in African logistics.

Arnoud Dekkers, head of business development for the Middle East and Africa at cargo and freight services company DHL Global Forwarding, said South Africa needed to look at the rest of the continent from a “long-term strategic investment” perspective and focus on the importance of establishing strategic partnerships in the region.

Dekkers said the mining logistics market alone is “projected to grow from $462-billion in 2025 to $617-billion in 2030. So, that’s a compounded annual growth of 5.95%.”

His insights into international investment trends are particularly relevant.

“Gulf states have invested around $53-billion in African projects to date, presenting key opportunities, obviously, to harness these capitals for sustainable infrastructure and mining inventions,” he said.

Dekkers acknowledged the substantial presence of China too: “They’ve come with the backing of a number of financial investments to develop the infrastructure. That’s also to develop the transport, develop processing plants. All that is obviously critical to the mining value chain…”

Not just a node in the belt and road

Reddy has also noticed a rising red tide in the renewable energy supply chain, with significant investment coming from Chinese companies establishing large warehousing facilities for solar equipment in South Africa.

“They [Chinese-owned local companies] are just importing volumes – I’ve never seen that volume of solar equipment or solar components shift in one space ever,” Reddy said, underscoring the scale of solar component importation.

However, she is a strong advocate for more local manufacturing. “I’m personally trying to lobby the government to try to break some of the IP deals that we have because we can be manufacturing these turbines, these motors, in South Africa.”

Mountains can be moved

As South Africa navigates its complex energy transition and infrastructure development challenges, the logistics sector stands as a crucial enabler. With R440-billion needed for the Transmission Development Plan alone, the integration of private sector investment and expertise is not just beneficial, but essential.

Other African nations struggle with geographical and infrastructure limitations, whereas South Africa’s relative advantages in road networks, logistical expertise and strategic planning should position it to overcome the substantial challenges ahead.

Reddy’s perspective captures the essence of South Africa’s logistics sector: pragmatic, resilient and ready to literally move mountains – or at least move massive wind turbines to the tops of mountains. The joke might be on logistics companies, but they’re the ones with the last laugh because they enable South Africa’s renewable energy revolution.

“We as innovators and change-makers need to stand forward,” Reddy said, “and we need to be like, you know what guys, I’ve got an idea here.” DM

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R35.

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