While SA’s logistics and transport systems continue to buckle under the weight of inefficiencies and infrastructure decay, leading ports and logistics provider Grindrod is thriving.
Over the past five years, its valuation has soared by more than 230%, a striking contrast to the dire state of much of the country’s transport network.
Grindrod’s story is one of strategic foresight, but it also serves as a stark reminder of the costs of neglecting infrastructure. As the private sector steps in to fill the gaps, SA’s state-owned enterprises face increasing pressure to reform or risk being sidelined altogether.
Grindrod’s interim results, released in August, highlighted its operational success, particularly in its ports and terminals division. The Port of Maputo, where the company has a significant presence, grew its handled volumes by 18% to 6.9-million tonnes, driven by demand for chrome.
Dry bulk terminals handled 8.4-million tonnes of cargo during the period. This includes a rebound in volumes at Richards Bay, where the company recorded 1.6-million tonnes, up 20% from the previous year, despite setbacks from a fire that disrupted operations.
At the heart of this growth is the company’s ability to leverage the inefficiencies at SA ports. Durban, once the star of Transnet’s port portfolio, has become notorious for backlogs, delays, and poor service.
This has led many commodity traders, mining houses, and logistics operators to reroute their cargo through Maputo in Mozambique. Grindrod’s Maputo port is strategically positioned near SA’s industrial hubs — Gauteng and Mpumalanga, and is well-placed to service mining exports, particularly chrome and coal.
In 2023, Grindrod’s Maputo terminals handled record volumes of 12.6-million tonnes, a 28% increase from the previous period, as shippers sought alternatives to SA’s congested ports, Business Day previously reported.
However, Grindrod’s strategy extends beyond ports. The company’s logistics arm is set to benefit from rail reforms. With the transfer of Transnet from the department of public enterprises to the department of transport, there is hope that rail infrastructure will improve.
In anticipation, Grindrod has been rebuilding locomotives and expanding its rail capacity. The company wants to deploy these assets along key corridors, including the Maputo corridor.
Grindrod’s rail operations are not limited to SA and Mozambique. The company has also secured rights to run trains in the Democratic Republic of Congo (DRC), Zambia, and Zimbabwe, and is scaling its operations across SA. However, its significant growth opportunity lies in gaining access to SA’s rail network.
Grindrod’s ability to pivot around SA’s infrastructure failures has been central to its growth, but the company is facing its own challenges.
Margins in its ports and logistics divisions have been under pressure, partly due to a shift from higher-margin coal and iron ore to chrome. The flooding in Mozambique earlier this year also temporarily disrupted its operations at the port and on railway lines to Maputo
Transnet’s ports and rail lines are struggling with outdated infrastructure, corruption, and mismanagement. Durban, once Africa’s busiest port, has been hit by everything from severe weather events to labour unrest, which resulted in prolonged delays.
For industries reliant on seamless transport — such as mining, manufacturing, and retail — the impact has been devastating. Many companies have faced higher costs, missed export opportunities, and disruptions to their supply chains.
The contrast between Grindrod’s success and the struggles of state-run entities such as Transnet reflects the broader weaknesses in SA’s infrastructure strategy. The government’s reluctance to fully embrace private sector partnerships has hindered investment and innovation in key sectors.
While reforms are under way, including a R47bn recovery plan for Transnet, it remains to be seen whether these efforts will be enough to restore confidence in SA’s logistics capabilities.
For now, Grindrod’s focus on Maputo and its ability to offer integrated pit-to-port solutions puts it in a unique position to capture market share as more businesses turn to alternative routes.
The question now is whether SA’s broader logistics sector can follow Grindrod’s lead — or if the country’s infrastructure woes will continue to weigh down the economy.
With Michelle Gumede
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