Logistics costs in South Africa

Logistics costs in South Africa reached 14.6% of gross domestic product (GDP), or 1,156 billion rand (approximately 69.61 billion USD) in 2026, according to the "State of Logistics 2026" report produced by the GAIN group with support from Absa Business Banking and the Western Cape government's Mobility Department. This is the highest level recorded in more than 20 years, exceeding the average of 10% to 12% observed between 2009 and 2018.

Transport dominates logistics expenses

Transport is the main logistics expense item, representing 59% of the total, or approximately 683 billion rand in 2026. The poor performance of the railway network has favored the use of road transport for flows that could be transported by rail. This evolution is accompanied by an 112% increase in road freight rates between 2014 and 2026, compared to 60% for rail freight during the same period.

Rising costs for transporters

Fuel remains an important component, representing 43.4% of transporters' operating costs in 2025. Other factors contributing to pressure on prices include vehicle financing, depreciation, and insurance premiums. These costs weigh on transporters and on businesses that depend on their services to supply their production sites and distribution networks.

Impact on retail and manufacturing

The internal transport of finished manufactured products, from factories to sales points and consumers, represents 31% of domestic transport costs. For retailers and companies in the mass consumption sector, delivery delays and uncertainty about delivery times complicate supply management. Maintaining precautionary stocks helps prevent shortages but ties up financial resources and incurs additional storage and management costs. The financial costs associated with stocks reach 191.4 billion rand in 2026.

Solutions for reducing logistics costs

Reducing the pressure on logistics costs requires improving the reliability of the railway network, smoothing road traffic, and strengthening coordination between the various links in the logistics chain. A return to a larger share of freight on rail could reduce dependence on trucks on certain routes, provided that available capacities, delivery times, and service quality meet the needs of shippers. These changes, however, require investments, an improvement in operational performance, and sustainable coordination between public authorities and private operators.

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