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Supply Chain

When Transport Costs Rise, Where Does the Extra Cost Go?

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Aerial shot of a bustling highway with freight trucks transporting goods.

When fuel prices rise, the first cost most businesses notice is the fuel bill. For companies moving goods around South Africa, however, that is only the beginning.

Transport sits underneath almost every part of the supply chain. Raw materials have to reach factories, finished products have to reach warehouses, goods have to move between distribution centres and retailers need stock delivered to their stores.

That means an increase in fuel costs can work its way through several stages before a product reaches the customer.

The Competition Commission’s latest Cost of Living Report highlights just how significant that pressure has become. Petrol prices increased by 26% between January and July 2026, with higher fuel and transport costs adding to production, logistics and distribution costs across the economy.

So where does that extra cost actually go?

It Starts With the Truck

For a transport operator, higher fuel prices are an immediate operating cost.

A truck still has to travel the same distance, carry the same load and use roughly the same amount of fuel. If diesel becomes more expensive, the cost of making that journey increases.

Fuel is not the only cost involved. Trucks also require maintenance, tyres, insurance, drivers and financing. But fuel is one of the costs most directly affected by changes in international oil markets and local fuel pricing.

Transport companies therefore have to decide how much of an increase they can absorb and how much needs to be reflected in their rates.

That is where the cost starts moving through the wider supply chain.

The Raw Material has to Get There Too

Consider a manufacturer producing a food product.

Before anything reaches the factory, ingredients, packaging and other materials may have travelled considerable distances. Those goods could have been transported from farms, processors, ports, importers or other manufacturers.

Higher transport costs can therefore appear before production has even started.

The manufacturer then has its own transport requirements. Finished goods need to leave the factory and move to a warehouse, distribution centre or directly to a customer.

The same fuel increase can consequently affect a product more than once as it moves through the network.

That is one reason why transport costs cannot be viewed in isolation.

Warehouses Don’t Make the Problem Disappear

It is easy to think of a warehouse as the point where transport temporarily stops.

In reality, goods may enter and leave a warehouse several times before reaching their final destination.

A product could arrive from a manufacturer, be stored, moved to another distribution centre and then delivered to a retailer. Each movement involves transport.

Warehousing itself also has costs, including electricity, labour, equipment and property. But transport remains part of the equation whenever goods need to be moved in or out.

For businesses operating large distribution networks, even relatively small increases in the cost of each journey can add up quickly.

Then the Product Reaches the Retailer

By the time a product arrives at a shop, its journey may already have involved several transport legs.

That does not mean the retailer simply adds every additional transport cost to the shelf price.

Businesses have different margins and different levels of bargaining power. Some may absorb part of the increase. Others may negotiate new prices with suppliers or transport providers. Some costs may be spread across a large number of products.

The important point is that there is no single point where a fuel-price increase becomes a retail-price increase.

It moves through a network of commercial decisions.

That is why two products can be affected differently by the same increase in fuel costs.

Distance Matters

The impact is also not the same for every business.

A manufacturer located close to its customers may have a very different transport profile from one that relies on long-distance road freight.

A retailer supplied from a nearby distribution centre faces different costs from one receiving stock from hundreds of kilometres away.

The same applies to imported goods. Products arriving through a South African port may still need to travel significant distances by road or rail before reaching a warehouse or customer.

The further a product has to travel, and the more times it has to be moved, the more opportunities there are for transport costs to influence the overall cost of getting it to market.

Not Every Increase Reaches the Customer Immediately

There is another reason the relationship between fuel and prices is more complicated than it first appears.

Businesses do not necessarily change their prices every time fuel moves.

A transport contract may have a fixed period. A manufacturer may have already purchased its inputs. A retailer may have stock sitting in a warehouse that was transported under an earlier cost structure.

This creates a delay between a change in transport costs and its eventual effect elsewhere in the supply chain.

It can also work in reverse.

When fuel costs fall, businesses may not immediately reduce prices because other costs have changed, contracts have not yet been renegotiated or existing stock was purchased when transport was more expensive.

The Competition Commission has raised concerns about this pattern in several essential markets, noting that some prices can rise quickly when costs increase but fall more slowly when those costs decline.

The Cost Doesn’t Always Stop With Transport

This is where the bigger supply-chain picture becomes important.

A transport cost increase can affect more than the price of moving a product.

If logistics becomes more expensive, businesses may reconsider how frequently they replenish stock, how much inventory they hold, which suppliers they use or where warehouses are located.

A manufacturer might look for a supplier closer to its factory. A retailer might review delivery routes. A logistics operator might try to improve vehicle utilisation to make each trip more productive.

In other words, rising transport costs can change decisions throughout the supply chain, not simply the price charged for a truck journey.

Can Businesses Reduce The Impact?

They cannot control the international oil price, but they can control how efficiently they use transport.

Better route planning can reduce unnecessary kilometres. Higher vehicle utilisation can spread the cost of a journey across more goods. Better load planning can reduce the number of trips required.

The same applies to the wider network.

If a business can source some products closer to its customers, reduce empty return journeys or position stock more strategically, it may be able to reduce the amount of transport required in the first place.

These decisions become more important when fuel prices are high.

The Question Isn’t Just What Transport Costs

South Africa’s latest fuel-price shock is a useful reminder that transport is woven into almost every part of the economy.

The question for businesses is therefore not simply “How much more will our trucks cost?”

It is “How much more will it cost to move everything our business needs, and how many times will those goods have to move before they reach the customer?”

That is a much bigger calculation.

For supply-chain managers, the answer may involve changing routes, suppliers, warehouse locations, delivery schedules or inventory strategies.

For consumers, the eventual impact may simply appear as a higher price on the shelf.

Between those two points is an entire supply chain — and that is where the extra cost goes.

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Logistics

From South African Orchard to Chinese Market: The Supply Chain Behind the Cherry Export

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Close up shot of a person hand picking cherries into a basket.

South African cherry growers can now sell into China for the first time, opening a major new market for the country’s growing cherry industry.

Agriculture Minister Willie Aucamp signed the market-access protocol with China’s General Administration of Customs in Beijing on 8 September. China imported about 586,900 tonnes of cherries worth US$3.3 billion in 2025, making it the world’s largest cherry importer.

For South Africa’s supply-chain industry, however, the interesting part starts after the agreement is signed.

Getting cherries from an orchard to a Chinese buyer requires a coordinated journey involving harvesting, packing, temperature-controlled logistics, road freight, export procedures, international shipping and distribution.

For a perishable product, every stage matters.

From Orchard to Packhouse

The export journey starts with producing fruit that meets the requirements of the destination market.

The new market-access protocol establishes the framework for South African cherries to enter China and forms part of the sanitary and phytosanitary arrangements governing agricultural trade between the two countries.

Once harvested, cherries need to move quickly through packing and preparation. The fruit then enters a temperature-controlled supply chain designed to maintain its condition while it travels towards the export gateway.

This makes logistics more than a transport function. Delays at the farm, packhouse, storage facility or during transport can reduce the time available for the rest of the journey.

The Journey to the Export Gateway

Where the cherries are grown will influence how they reach international markets.

South Africa’s cherry industry has expanded significantly in recent years, with planted area increasing from 185 hectares in 2012 to 819 hectares in 2024, according to industry body Hortgro.

As production grows, so does the logistics network needed to support it.

More fruit means more movement between farms and packhouses, greater demand for cold storage and additional transport capacity to connect production areas with export gateways.

The opening of China could therefore create opportunities beyond the growers themselves.

Then Comes the Export Process

Physical movement is only part of getting the cherries into China.

South African exporters also need to meet customs and origin requirements.

South Africa’s temporary zero-tariff arrangement with China came into effect on 1 May 2026. Qualifying exports can receive zero-tariff treatment if they meet the applicable rules of origin, although some tariff lines are subject to quotas.

SARS issues the Rules of Origin certificates required for qualifying exports. Exporters must also maintain the required documentation and comply with the scheme’s conditions to receive the tariff benefit.

For the supply chain, this means a shipment can be physically ready to leave South Africa but still be unable to move as planned if the documentation and customs requirements are not in order.

China is Only Another Link in the Chain

Once the cherries arrive in China, the journey is not over.

The shipment still needs to clear the relevant authorities, reach importers and move through China’s distribution network before reaching its final buyer.

That makes coordination across the entire journey particularly important.

A delay in South Africa does not simply mean a later departure. It reduces the time available for every stage that follows.

A New Market, And A New Logistics Opportunity

The Department of Agriculture expects the opening of the Chinese market to stimulate further investment in cherry production and estimates that it could create about 600 new jobs.

If production expands, the supporting supply chain will need to expand with it — from packhouses and cold storage to road freight, export services and international logistics.

That is what makes the agreement significant beyond agriculture.

South Africa now has access to a major new market. The next challenge is building a supply chain capable of getting those cherries there on time, in good condition and at a competitive cost.

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Freight Forwarding

Could Wind Shields Reduce Disruption at the Port of Cape Town?

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Cape Town harbour with a docked freight ship being loaded with storage containers.

Strong winds regularly disrupt operations at the Port of Cape Town, creating delays that can extend well beyond the harbour. Transnet is now considering wind shields, combined with improved weather forecasting and predictive modelling, as part of an effort to reduce these interruptions and keep cargo moving.

The proposal comes as the port continues to look at ways of improving its ability to operate during adverse weather. The focus is not on eliminating the effect of strong winds, but on reducing the amount of time they prevent equipment from operating safely.

That matters because lost operating time at a major port can quickly become a problem for exporters, shipping companies and businesses further along the supply chain.

Why Strong Winds Disrupt Port Operations

Much of the work at a container port depends on large pieces of equipment, including ship-to-shore cranes, operating safely.

When wind speeds reach certain levels, those operations may have to be restricted or stopped. The resulting delays can affect when cargo is loaded and unloaded and, in turn, when vessels are able to leave the port.

A disruption to one operation can also affect the schedule of others.

For exporters, the consequences can be significant. Cargo may already have been transported to the port, prepared for export and scheduled for loading. When operations are interrupted, those goods can remain in the system for longer, creating uncertainty around delivery times and additional pressure on transport and storage arrangements.

The Wind Shield Proposal

Transnet is considering wind shields as one way of reducing the impact of strong winds on port operations.

The concept is relatively straightforward: strategically placed barriers could reduce wind speeds in areas where equipment is operating, potentially allowing some activities to continue safely for longer during periods of adverse weather.

The objective is not to make the port immune to wind. Instead, the proposed infrastructure is intended to reduce the frequency or duration of stoppages caused by conditions that currently prevent equipment from operating.

That could give the port more usable operating time, particularly during periods when strong winds would otherwise restrict activity.

Forecasting Matters Just as Much

The physical wind shields form only part of the proposed approach.

Transnet National Ports Authority has been working with the Council for Scientific and Industrial Research (CSIR) on a wind study and predictive modelling for the Port of Cape Town.

The work is designed to improve understanding of how wind conditions affect port operations and provide more localised information that can support operational decisions.

The Western Cape Government reported in February that the forecasting model had been tested and integrated into the port’s operational support system. The system provides localised wind forecasts and information intended to assist Port Control when making decisions about operations.

The practical benefit is better preparation.

Accurate forecasting can give port operators more warning of potentially disruptive conditions, allowing them to adjust operations and plan around periods of severe wind rather than reacting once a disruption has already occurred.

Why Exporters Feel the Impact

The effects of a port disruption are not confined to the port.

Take an agricultural exporter. Produce may have been harvested, packed, transported to Cape Town and prepared for loading onto a vessel bound for an overseas market. If strong winds interrupt operations, the shipment can be delayed even though every previous stage of the journey has been completed.

That delay can affect schedules, transport planning, storage and the timing of when goods reach their destination.

The Western Cape Government has highlighted fruit exports in particular when discussing the need to reduce weather-related disruption at the port.

For products where timing and condition are critical, improving the consistency of port operations can have a direct commercial benefit.

More Than an Infrastructure Problem

Wind is only one of the factors affecting port performance, which is why the proposed response goes beyond the construction of physical barriers.

The broader work includes forecasting, operational procedures and planning for periods when weather prevents normal activity.

That combination is important. Better infrastructure can reduce the impact of strong winds, but better information can help operators decide how to use the available operating time and prepare for disruption when it cannot be avoided.

The Western Cape Government’s stakeholder work has also identified the need for clearer procedures around stopping and restarting operations and for alternative measures during extended weather disruptions.

A Practical Response to a Recurring Problem

The proposed wind shields are a targeted response to a problem that repeatedly affects the Port of Cape Town.

Rather than treating every weather-related stoppage as unavoidable, the approach is to reduce the effect of strong winds where possible and improve the information available to the people running the port.

For exporters and other businesses that depend on the port, the outcome is ultimately straightforward: fewer disruptions, greater certainty and a more predictable route for getting goods to market.

That is the real value of the proposal. Not simply keeping cranes operating for longer, but reducing the number of times a weather event at the harbour becomes a problem for businesses hundreds or thousands of kilometres away.

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Management

How the Best Supply Chain Leaders Think Differently

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Supply chain leader on a business call in front of her laptop.

Supply chain leadership has never been a simple job. Leaders are expected to balance cost, efficiency, customer expectations, supplier relationships, technology, people and an increasingly unpredictable global environment.

What has changed is the speed and complexity at which those challenges can emerge.

A disruption that once seemed like an isolated event can quickly affect suppliers, transport networks, inventory levels and customers across an entire operation. At the same time, businesses are under pressure to adopt new technologies, improve efficiency and respond to changing customer expectations.

In this environment, being a good supply chain leader is not only about knowing how a supply chain operates. It is about thinking differently about the challenges facing it.

They Look Beyond the Immediate Problem

Supply chain leaders spend a great deal of time solving problems. A delayed shipment needs attention. A supplier cannot fulfil an order. Inventory is running low. A customer needs an urgent delivery.

These issues cannot simply be ignored, but the strongest leaders do not stop at fixing the immediate problem.

They look at what the problem might be telling them about the wider supply chain.

A recurring delay could point to a weakness in a particular route or supplier relationship. Unexpected fluctuations in demand could reveal weaknesses in forecasting. A stock shortage might expose a lack of flexibility elsewhere in the network.

This means good leadership is not just about asking, “How do we fix this?” It is also about asking, “Why did this happen, and what can we change so that we are better prepared next time?”

That shift in thinking can turn individual problems into opportunities to strengthen the wider operation.

They Are Comfortable With Uncertainty

There will always be things that supply chain leaders cannot control.

Markets change. Costs fluctuate. Customers change their behaviour. Suppliers experience their own challenges. Transport networks can be disrupted by events thousands of kilometres away.

Trying to predict every possible disruption is unrealistic.

Instead, strong leaders think about how prepared the organisation is to respond when something unexpected happens.

This can mean having alternative suppliers, maintaining relationships across a broader network, understanding where the most important dependencies exist or simply ensuring that decision-makers have enough visibility to react quickly.

The goal is not to eliminate uncertainty. It is to make the supply chain less vulnerable to it.

They Don’t Chase Technology for Technology’s Sake

Artificial intelligence, automation, robotics, predictive analytics and other technologies are changing the way supply chains operate.

For leaders, however, the question should not simply be which technology to adopt next.

The more important question is what problem the technology is supposed to solve.

Technology can improve visibility, automate repetitive tasks, support forecasting and help businesses make decisions faster. But introducing a new system does not automatically make a supply chain better.

The strongest leaders understand this distinction. They consider how technology fits into the wider operation, whether their teams can effectively use it and whether it is solving a meaningful business problem.

In other words, they start with the supply chain challenge and work backwards towards the technology, rather than starting with the technology and looking for somewhere to use it.

They Understand the Value of Flexibility

Efficiency has traditionally been one of the main goals of supply chain management. Businesses want to reduce costs, minimise waste and make better use of their resources.

Those objectives remain important.

However, a supply chain that is highly efficient under normal conditions may not necessarily perform well when conditions change.

The best leaders therefore think about the balance between efficiency and flexibility.

Sometimes this means accepting a degree of redundancy or maintaining an alternative option that may not appear to be the cheapest choice in the short term. The value comes when circumstances change and that flexibility gives the organisation more options.

This is an important shift in mindset. Instead of viewing resilience as an additional cost, leaders can consider it part of the value of having a supply chain that can adapt.

They See People as Part of the Solution

There is considerable focus on the role of automation and artificial intelligence in the future of supply chains. Yet even the most advanced technology still depends on people.

Someone needs to understand the data. Someone needs to make decisions. Someone needs to manage relationships with suppliers, customers and logistics partners.

Strong supply chain leaders recognise that technology and people are not necessarily competing priorities.

The right technology can remove repetitive work, provide better information and allow employees to focus on more complex decisions. At the same time, organisations need people with the skills to understand and use these new tools effectively.

This makes leadership and skills development increasingly important. The future supply chain may be more digital, but it will still need people who can think critically, adapt quickly and make decisions when the answer is not obvious.

They Think Across the Business

Perhaps one of the biggest differences between traditional and modern supply chain leadership is how leaders view the function itself.

The supply chain does not operate in isolation.

A purchasing decision can affect inventory. An inventory decision can affect cash flow. A logistics decision can affect customer experience. A change in customer demand can have consequences throughout the entire network.

The best leaders understand these connections.

Rather than focusing solely on the performance of their own department, they work with finance, sales, operations, procurement and other parts of the organisation to understand the bigger picture.

This allows supply chain decisions to support broader business objectives rather than being measured purely against operational targets.

They Keep Asking What Comes Next

Perhaps the defining characteristic of a strong supply chain leader is curiosity.

The supply chain environment will continue to change. New technologies will emerge, customer expectations will evolve and new risks will appear.

There is no single strategy that will permanently solve every challenge.

The strongest leaders therefore keep asking questions.

What could change? Where are we vulnerable? What information are we missing? Are we still operating in the way that makes the most sense for the business? What could we do differently?

This mindset creates a supply chain that is not simply built to operate today, but one that can continue evolving tomorrow.

Ultimately, the best supply chain leaders do not have all the answers. What sets them apart is their willingness to question existing assumptions, look beyond immediate problems and create an organisation that is capable of adapting when circumstances change.

In a supply chain environment where change has become a constant, the ability to think differently may be just as important as the ability to execute well.

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