By: OrePulse

South Africa's logistics costs are projected to reach a record R1.16 trillion in 2026, equal to 14.6% of gross domestic product, according to the State of Logistics 2026 report produced by the GAIN Group. The figure is R147 billion higher than the 2025 total and represents the largest cost recorded in the report's history, the report said. The GAIN Group's report has tracked the combined cost of moving freight across South Africa's road and rail networks since 2003.

The report was sponsored by Absa Business Banking and the Western Cape Government's Mobility Department.

The national logistics bill is made up of four cost categories: transport, inventory carrying, warehousing, and management and administration. Transport remained the largest of these, accounting for an estimated 59% of total 2026 logistics expenditure, or about R683 billion, the report found. It identified rising road-freight costs, including the effect of higher diesel prices, as a significant driver behind the year-on-year increase.

The report also modeled an alternative outcome for 2026. It calculated that improved modal choices, better spatial planning, and additional inland terminals and freight-consolidation hubs could have reduced the national logistics bill by as much as R150 billion, had those measures already been in place. Under that modeled scenario, the report said, logistics costs would have equaled roughly 12.7% of GDP rather than 14.6%. It stressed that the R150 billion figure is a modeled estimate and does not represent money that has actually been recovered or saved.

On rail, the report said the economic cost attributed to freight rail underperformance fell to R180.8 billion in 2025, down from R410.7 billion in 2022. Expressed as a daily figure, that remaining cost now runs at about R495 million a day, compared with more than R1 billion a day at the height of the 2022 rail and port crisis, according to the report.

Rail freight volumes rose to 167.9 million tonnes in the 2025/26 period, up from roughly 149.5 million tonnes in 2022/23, the report said. South Africa has set a target of moving 250 million tonnes of freight by rail a year by the end of the decade. The latest volume leaves rail freight roughly 82 million tonnes short of that target, based on the figures in the report.

The report called for the restoration of competitive general-freight rail services, pointing in particular to the corridors linking Gauteng and KwaZulu-Natal and to routes serving the Western Cape, as priorities for improvement.

Beyond the headline cost figures, the report framed an efficient logistics system as a potential contributor to economic growth rather than simply an expense to be minimized. It said the country's objective should be to move freight reliably at a competitive cost, rather than to maximize the volume of cargo moved for its own sake.