How SA’s motoring industry is using it to their advantage – Bidvest International Logistics gives the inside take.
JOHANNESBURG, 20 July 2022 – The war in Ukraine and its impact on the world economy has once again exposed the risks inherent in globalisation.
The conflict has further disrupted global supply chains already strained by the Covid-19 pandemic, and according to Simon Geale, executive vice-president at supply chain consulting firm Proxima, the deceleration of globalisation is now a certainty.
Given all that’s transpired internationally in the past two years, businesses are now near-shoring their operations in an attempt to negate issues of cargo congestion and suspension of goods and services provision globally.
The shift to new strategies emphasising local sourcing has become critical.
In June, Business Unity South Africa (BUSA) reported that the continued spread of Covid-19’s Omicron variant, the ongoing effects of the war in Ukraine as well as other constraints had pushed cargo volumes in South Africa to their second lowest level in the past 12 months, despite freight rates remaining astronomically high.
Shoring up local supply networks is vital if South Africa is to keep its head above water amid speculation that another recession is imminent.
Businesses would do well to follow the example of South Africa’s automotive sector, says Bidvest International Logistics’ Supply Chain Solutions Manager, Willem Bekker.
“South African automotive manufacturers have been implementing local sourcing strategies for years – well before the war in Ukraine or even the pandemic.
“This has been driven by the automotive industry incentive programmes put in place by the Department of Trade, Industry, and Competition (DTIC), specifically the Automotive Production and Development Programme (APDP), called APDP 2 in its current form.
“In order to qualify for the significant incentives offered by this programme, the locally-based automotive original equipment manufacturers (OEMs) have had to implement increasingly high targets for sourcing locally produced content for manufacturing. This means that when it comes to local sourcing, our motor industry is in a far better position than other countries.”
The APDP is reviewed every few years. Its major impact, with its strong focus on localisation, is that it starts to create an entire value stream of locally manufactured goods and services linked to the automotive industry.
Newer versions of the policy stress activities outside of the direct manufacturing operations, such as second and third tier component suppliers, service provision, distribution and logistics systems and infrastructure.
Bekker also points out that because South Africa is geographically isolated from major economic hubs, the cost of moving goods to the country from Europe or the US is far higher than moving goods within the US or Europe.
“This means that localisation has a significant logistics cost benefit, while also allowing far more flexibility in the supply chain through not being dependent on long global shipping lead times.”
Port and border congestion, which remains a threat to supply chains, further strengthens the case for localisation. The BUSA report indicated that massive delays persisted on the busiest trade lanes, with an average of 17,5 days’ worth of delays on a full rotation between North-West Europe and the Far East.
According to Bekker, it is essential that clients are provided visibility into their supply chains through visualisation and tracking tools.
A May 2022 white paper by the World Economic Forum indicates there is growing demand for cross-border regional integration in southern Africa, with South Africa’s ports and borders playing a significant role.
South Africa has been proactive in this regard, introducing electronic supporting documents, a mobile application tool that allows inspection results to be captured, and a web-based platform for end-to-end processing of customs clearances.
The effect has been a reduction in the time needed for physical inspections from eight hours to two on average, a simplification of real-time customs declarations to as little as seven seconds, and halving the number of days to import goods.
Cargo scanners and electronic cargo tracking systems have also now made it possible to monitor goods in transit in real time.
The shifts occurring are all about building resilience, Bekker says. The traditional Just-in-Time model has become one that emphasises Just-in-Case as supply chains are redefined.
“You have to consider first-tier suppliers exposure to the risks you are trying to avoid. This works best by strong collaboration throughout the supply chain, building long term relationships and partnerships with key suppliers, and jointly understanding the macro-level benefits of realising a successful localisation strategy.”
Bekker says the localisation focus is likely to carry on as long as South Africa continues to assist in the development of a globally competitive motor industry.
By Gavin Kelly, CEO of the Road Freight Association
Higher Fuel Prices Pushes Transport Costs Through the Roof
Every litre of fuel consumed on South Africa’s roads reflects the underlying health of the country’s logistics economy. Changes in fuel prices have a far-reaching effect on the country’s supply chain, transport systems, the wider logistics industry as well as the pricing of goods on store shelves.
The October increase in the price of fuel reminds everyone – especially the consumer – of just how exposed the broader logistics sector is to the volatility of global oil markets. With fuel prices continuing to rise, transport companies will inevitably raise the cost of transport due to increasing pressure on operational costs.
Depending on the type of operation, routes, vehicles and specific conditions of the transport leg, fuel can be anywhere between 35% and 55% of operating costs. Fuel is one of the three largest operating costs in the transport industry, thus even small price fluctuations can have significant consequences. South Africa moves more than 80% of the land-based freight via road freight (and a large amount of the general freight on rail also uses diesel) – one can understand that highly volatile fuel prices have an effect far beyond the road freight industry.
Diesel at the Heart of Freight Costs
The October fuel price adjustment sees petrol increasing to R29,88 and R30,25 per litre (inland) which is respectively a 11,6% and 12% per litre increase, whilst diesel increases by R2,84 and R3,24 per litre, depending on the amount of sulphur – resulting in a 10% or 11% increase on the base fuel cost of between 35% and 55%.
Diesel fuels a great majority of freight movement in the country, from line haul trucks that link ports and distribution centres to small delivery vehicles supplying local markets.
Since almost every sector depends on road freight, the changes in diesel prices have an exponential and expanded effect on the logistics industry and, unfortunately, the impact of fuel costs is inevitable.
As noted earlier, fuel is one of the biggest variable expenses and it impacts both short- and long-distance operations – it affects all legs in a logistics chain, and some transporters will now face severe cash flow constraints.
Global Pressures Shaping Local Fuel Prices
Global fuel market dynamics play an enormous role in determining fuel prices – supply and demand remains very relevant in what the (global) customer is prepared to pay for a barrel of oil, as well as the perceived shortage that drives a buying spree and thus the price for a barrel. Secondly, as oil is primarily bought with US Dollars, the value of the Rand against the Dollar plays a further (in our case) negative role in resulting in more expensive fuel at the pump.
Unfortunately, the majority of the petroleum products (crude oil and refined petroleum products) consumed in South Africa is imported, and this directly results in the domestic fuel cost either rising or falling.
The October increase was primarily caused by increasing global oil prices, geopolitical concerns, a weakening Rand and the growing instability in the global supply of energy networks. The political turmoil in major oil producing countries has now caused increased volatility to the market, which has led to worries about possible interruptions to the major distribution and transportation routes.
Oil markets typically react quickly to geopolitical risks, pushing crude prices higher and driving up the cost of refined fuel products downstream. For an economy like South Africa that imports oil, the outcome is often inevitable: higher domestic energy prices.
The Ripple Effect Across Logistics
Again, the fuel price increase does not end at the pump price – once fuel prices increase, the cost of moving goods from production sites to distribution centres, and finally to retailers is all exposed to price increases.
Road freight plays a crucial role in the long-distance moving of goods among ports, factories, warehouses, and retail locations.
Freight companies need to remain financially viable, and thus transport companies must choose whether to increase their rates (by a variety of factors of either full fuel price increase or a percentage thereof), or whether they have the financial reserves to withstand the increases. The latter will place pressure on cashflow and reserves. Rate adjustments are often inevitable due to the recurring fuel price strain, even if some transport operators may temporarily withstand the cost to preserve contracts and relationships with clients.
How Operators Are Managing Volatility
The transportation sector has grown increasingly defined by the volatility of fuel prices, and many transport companies adjust by reducing the volume of fuel used – fleet managers lever telematics technology, fuel choice, optimal routing software, driver training, new engine / vehicle technologies, congestion and standing time minimisation / avoidance and even load sharing.
Environmentally friendly driving techniques, better vehicle maintenance, and more sophisticated logistics planning are now essential resources for controlling operating expenses.
Fuel adjustment methods have been incorporated in several transport contracts, enabling operators to partially compensate for the rapid price changes without disrupting long-term commitments. These approaches may reduce the effects of the rising fuel prices; however, they are not sufficient to eradicate them.
Navigating an Uncertain Road Ahead
The fuel price increase illustrates how vulnerable the country’s transport sector is to international energy trends.
Unfortunately, it is difficult to completely rule out further fuel price increases – already there are indicators are that South Africa is heading towards further fuel price increases in November, should the tensions in the Middle East not be resolved. The ongoing geopolitical tension and the surge in risk, coupled with the supply and demand factor, adaptability will continue to be vital for South Africa’s freight sector.
Transport companies’ strategies for navigating this increasingly unstable operating environment will continue to be shaped by limiting fuel use, enhancing operational efficiency, and preparing for unpredictability.
One thing is certain: In a country that is dependent on road freight, such as South Africa, every adjustment in the price of diesel has consequences extending past the petrol pump, it goes deep into the transport systems that keep the country running.
A year ago, AI assistants sent this business no visitors. Now they do. For transport, logistics and supply chain companies, the way buyers shortlist carriers and freight partners is changing too.
IMS‘s work with Big Talk Entertainment shows how AI search is starting to influence how South African businesses are found. The lessons apply across the sector, from freight operators, couriers and clearing agents to warehousing, cold chain and supply chain software firms.
Between February and July 2026, Big Talk Entertainment recorded 28 website sessions from AI assistants such as ChatGPT, Gemini and Perplexity. Over the same period in 2025, Google Analytics 4 recorded none. The Cape Town entertainment agency worked with Johannesburg-based digital agency IMS to make its website easier for search engines and generative AI tools to find, understand and cite.
The numbers are still small, and IMS is candid about that. “The direction is what matters,” says IMS’s Chief Disruptor, Francois Vorster. “A way of finding customers that did not exist a year ago now does.”
Over the same six months, new visitors from Google search rose 67%, and people typing the website’s address directly into their browser, often a sign that someone remembers a brand, rose 87%.
Why This Matters for Logistics
Big Talk is not a logistics business, but its corporate buyers behave like yours. They research several suppliers before they make contact, and in logistics a poor choice means late deliveries and damaged stock. More of that research now starts with a question put to an AI tool, such as “Which freight forwarders handle cross-border shipments to Zambia?” or “Who offers warehousing near the Durban port?”
“Choosing a logistics, transport or supply chain partner is a high-stakes decision, so buyers research thoroughly before they request a quote, and more of that research now starts in an AI tool and not a Google search,” says Vorster. “We can’t say for certain how much of the improvement came from traditional search work and how much from the AI-focused work. What we can say is that AI tools have become a measurable new source of visitors for a business that had none a year ago.”
What IMS Did
IMS combined traditional search work with making the business easier for AI tools to find and recommend: improving the website’s technical foundations, rewriting pages to answer the questions customers ask, and keeping the business’s details consistent everywhere AI tools look.
For a logistics business, that means clearly explained services, current coverage areas and routes, fleet and capabilities, licences and certifications, and answers to common shipper questions.
“A few years ago, nobody asked ChatGPT to recommend a band for their wedding. Now many people do,” says Deon Schlebusch, Managing Director of Big Talk Entertainment. “We are not walking away from the channels that have always worked for us, but we’d be foolish to ignore a new one that’s starting to send us business leads.”
A Word of Caution
The results come from Big Talk’s own analytics, comparing 1 February to 31 July 2026 with the same period in 2025. Because traditional and AI-focused work ran together, the growth cannot be credited to the AI work alone, and any link between AI recommendations and direct visits cannot be proven from the data. “We would rather show what we can actually measure than overclaim,” says Vorster.
Logistics businesses should also make sure claims about coverage, transit times, licences and safety records are accurate and verifiable, because buyers rely on what AI tools tell them.
What is GEO?
Generative Engine Optimisation, or GEO, is the practice of making a business easier for AI tools to find and recommend. Where SEO is about ranking on Google, GEO is about being the answer an AI tool gives.
By Nqobile Mthembu, Business Development Manager at ACTOM
South Africa’s move to an open‑access rail model from April 2027 marks one of the most significant shifts in the country’s freight logistics landscape in decades. For the first time, private operators will be able to run services on designated freight corridors, introducing competition above the rail while the state continues to steward the underlying infrastructure.
Under the Transnet Rail Infrastructure Manager (TRIM), created to manage South Africa’s national rail network infrastructure, access deals with eleven private freight train companies have been signed for major national corridors.
This reform has the potential to unlock capacity, improve reliability, and stimulate long‑overdue investment, but only if the physical network is ready for the increased demand it will need to support.
Physical Network Still Lagging
From an institutional and regulatory perspective, the foundations for open access are largely in place. The mechanisms for allocating slots, managing access and ensuring fair participation are emerging, creating a more transparent, commercially oriented environment.
However, readiness on paper does not equate to readiness on the ground. The country’s physical rail network has endured years of underinvestment, maintenance backlogs, security breaches and capacity constraints.
Signalling remains outdated across many corridors, traction power is inconsistent,and rolling stock availability remains insufficient to support rising throughput.While the system may be structurally prepared for multiple operators, the infrastructure is not yet ready at scale.
Open access will only succeed if modernisation accelerates and investment in track, signalling, electrical systems and rolling stock support keeps pace with operator growth.
Pressure Points to Intensify
As new operators enter the network, pressure will intensify across several critical areas. Signalling and train control systems need urgent upgrades to ensure safe, reliable operations.
Power infrastructure must also be stabilised and expanded to support more locomotive movements. Rolling stock shortages will worsen, and demand for maintenance facilities, components and refurbishment capacity will grow rapidly.
These are not isolated challenges; they are interconnected. A modernised signalling system is ineffective without reliable traction power, and additional locomotives and wagons add little value if maintenance capacity cannot support them. The entire ecosystem must evolve together.
Investment Ahead of Demand
The shift to a multi‑operator environment fundamentally changes how engineering and maintenance partners must plan. Under a single‑operator model, suppliers often aligned their investment cycles to one entity’s procurement patterns. That approach is no longer viable.
What is needed now is flexibility, responsiveness and local capacity. Engineering partners must invest in standardised components, strengthen technical support and shorten turnaround times. Operators will need reliable maintenance and engineering support throughout their assets’ lifecycles, and suppliers must be ready to meet that demand.
This is also an opportunity to reinvigorate local manufacturing. For years, limited investment in rail infrastructure weakened South Africa’s domestic rail supply chain. Open access can reverse this trend if suppliers invest early and decisively.
Collaboration Beyond Slot Allocation
Slot allocation determines when and where trains can run, but collaboration goes deeper. Infrastructure managers, operators, OEMs and engineering partners must share information, plan maintenance jointly and coordinate investment decisions. If suppliers are only brought in when equipment fails or procurement begins, the system becomes reactive rather than strategic.
Working together from the outset allows us to design fit‑for‑purpose solutions, plan spares and maintenance capacity, and ensure that assets are supported throughout their lifecycle. A fragmented approach will undermine the very benefits open access aims to deliver.
South Africa’s ambition to move 250 million tonnes of freight by 2030 is achievable, but not at the current pace of modernisation.Reaching the target will require accelerated investment in network capacity, signalling, traction equipment, rolling stock, and maintenance. Without this, the system will struggle to absorb additional operators and volumes.
The Biggest Risk
If infrastructure investment does not keep pace with operator growth, the benefits of open access will not fully materialise. Increased traffic on an already stressed network heightens safety risks, reduces reliability and accelerates wear. Investment in locomotives and wagons must be matched by the infrastructure that enables them to operate efficiently.
Despite these challenges, open access can rebuild South Africa’s domestic rail supply chain, stimulate investment in locomotives, wagons, signalling, electrical refurbishment and local manufacturing, and help restore the country’s position as a leader in rail engineering.
If we modernise decisively, collaborate meaningfully and invest ahead of demand, open access will not only expand freight volumes but will reshape the future of South Africa’s rail sector for generations to come.