Nearly R1bn is lost every day because South Africa’s transport system is failing. The real question is who, if anyone, the sector is actually working for.
At the inaugural national transport conference, President Cyril Ramaphosa acknowledged what many small business owners have known for years: the logistics system is inefficient, costly and holding back growth.
When the system fails, it is small businesses that feel it first and hardest. It shows up in their daily operational realities, like higher delivery costs, delayed stock, lost customers and shrinking margins.
South Africa still relies heavily on road freight, with around 69% of goods transported by road. That concentration places enormous strain on already fragile infrastructure, and when our roads deteriorate, congestion builds and inefficiencies creep in. The impact moves quickly through the value chain and ultimately into the price consumers pay.
Today, businesses are facing an additional layer of pressure due to ongoing instability in the Middle East, which is driving up fuel costs, possibly by as much as R7.80 a litre, disrupting supply chains and adding further uncertainty to an already strained operating environment.
What is often overlooked is how much of this cost is structural. By some estimates, 20%-25% of the fuel price is made up of taxes and levies. This means when fuel prices rise, the pressure is built into the local system, and for many SMEs any increase will push them to breaking point.
What is often overlooked is how much of this cost is structural. By some estimates, between 20% and 25% of the fuel price is made up of taxes and levies.
At the same time, the government is pushing ahead with reforms. There is a clear intention to reposition rail as the backbone of the transport network, with new players entering the system and ambitious targets for expanded freight and passenger capacity.
On paper, this signals progress, but in practice the benefits are not yet reaching the businesses that need them most.
Many of these reforms remain structured in ways that favour large, established players with the capital, scale and access to take advantage of new opportunities. SMEs, by contrast, are often left trying to participate in a system that was never designed with them in mind. This is the critical gap.
We often speak about infrastructure investment as if it will automatically translate into inclusion, but in truth it does not. South Africa is expected to spend more than R1-trillion on infrastructure, much of it in transport and logistics, but unless that investment is intentionally structured to include smaller players, the benefits will remain concentrated.
Access to funding illustrates this clearly. There are entrepreneurs who have spent years building logistics businesses, investing millions of their own capital, yet they still struggle to access institutional funding. In some cases, they are required to put forward significant upfront capital simply to be considered. For most SMEs, that is a monumental barrier to entry.
Globally, there are examples of how smarter, more inclusive logistics systems can ease these pressures. In countries like Germany, collaborative freight networks and digital load-sharing platforms have enabled smaller operators to share routes, consolidate loads and reduce empty return trips. The result is lower costs, improved efficiency and greater participation by smaller players in the logistics value chain.
In South Africa, this kind of collaboration remains underdeveloped but it represents one of the most immediate opportunities to reduce costs and improve resilience. SMEs are already dealing with immediate constraints, and their very survival depends on adaptability. Businesses that are managing to stay competitive are becoming more deliberate in how they operate, and collaboration is crucial.
If we are serious about building a transport system that supports inclusive growth, then SMEs must be part of its design, not an afterthought. That means addressing structural cost drivers, improving safety and reliability across key corridors, and expanding access to funding, particularly for emerging and black-owned businesses. It also means ensuring that infrastructure reforms are efficient and inclusive by design.
There are encouraging signs but infrastructure alone will not fix the system. If we don’t address who the system works for, we risk building something that looks right on paper but fails in practice. Without the right direction, even the best-built system will struggle to reach its correct destination.
• Mtwentwe AGA (SA), is MD of Vantage Advisory and host of the SAICABIZ Impact Podcast
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