South Africa’s stalled shift from road to rail has become a strategic economic risk with far-reaching consequences for logistics resilience, business continuity, and national competitiveness. With freight volumes collapsing, infrastructure decaying, and customer confidence waning, Transnet Freight Rail (TFR) is now widely seen as a system in distress.
Risk professionals, business continuity planners, and logistics leaders must urgently step forward. This is not a transport issue alone, it is a direct threat to economic stability, operational resilience, and long-term competitiveness. The window to prevent permanent supply chain realignment is closing. A national recovery effort is needed, led by both government and industry, to stabilise freight corridors, modernise infrastructure, and restore private sector confidence. Strategic risk demands strategic leadership and that means investing, advising, and collaborating now, not later.
“South Africa can no longer afford the illusion that doing the same thing will yield different results,” says Volker von Widdern, Risk Principal at Riskonet Africa. “For risk professionals and supply chain leaders, the current rail model is not just underperforming, it’s a vulnerability. We need to rethink our assumptions and invest in recovery frameworks that work.”
TFR has lost 80 million tonnes in freight over the past five years, down from 226 million tonnes in 2017/18 to just 149.5 million in 2022/23. This collapse has triggered a shift of long-haul cargo back to roads, leading to over-congestion, increased infrastructure damage, and higher logistics costs across the economy.
Much of the decline stems from systemic operational failures: derailments rose 36% in the last year alone, manual train controls have surged from 50 000 to over 250 000 per month since 2018, and key export corridors are barely functioning. Mining company Exxaro, for example, reports that on one major line, only three trains a week are running due to security incidents and locomotive shortages.
Adding to the crisis is decaying infrastructure and rampant sabotage. Transnet faces a R50 billion maintenance backlog and a ballooning debt burden. Many of its locomotives are over 40 years old, and a major order for replacements was derailed by corruption scandals. Over 1000 km of copper cable was stolen in 2022/23 alone, with over 7 400 security-related incidents recorded last year, leaving vital routes inoperable.
The economic fallout is immense. Analysts estimate the country has forfeited more than R500 billion in export revenue since 2010 due to rail failures. According to industry groups, South Africa is losing around R1 billion in economic output every day due to blocked freight routes. Exporters are turning to costly road alternatives, rerouting shipments to neighbouring countries, and in some cases, scaling down operations altogether.
“In the risk management world, this is a textbook case of systemic risk,” says von Widdern. “Each derailment, each theft, each delay erodes trust, and trust is the real currency of any logistics system. If we don’t repair that trust soon, we risk losing more than just market share we risk losing the system itself.”
He says these risks should also be considered in terms of secondary, long-term consequences. The privatisation of the second pier in Durban harbour has been delayed for three years because an incorrect tender award. Mine and industrial development decisions that require efficient export facilities are likely to be delayed until the rail and port capacity is reliably restored. These are impediments to economic growth
“The response cannot be left to the State or SOE’s alone, based on their constrained resources. An alternative growth and gain sharing model should be applied.”
Von Widdern says Government has acknowledged the need for “fundamental reform” in its Freight Logistics Roadmap, while the Treasury warns no further bailouts will be provided without demonstrable change. Encouragingly, several mining giants are now engaging to help finance upgrades, and key corridors are being opened to third-party rail operators.
