Page 58 - Risk Report 2024

IRMSA
58 RISK REPORT 2024/25

8.8 Logistics

A fully functional national transport and logistics system (air, sea, road, and rail) is crucial
to the South African economy to facilitate the efficient movement of people, goods,
resources, and services both domestically and internationally, supporting trade and
industry – ‘lubricating the wheels of the economy’, so to speak.

When effective, the sector significantly contributes to employment and economic growth by creating jobs
and enabling businesses to operate smoothly. Robust transport and logistics infrastructure also attracts
foreign investment and enhances South Africa's competitiveness in the global market. When the sector is
under pressure, as it currently is, the overall economy, and individual citizens suffer in the short-term, while
medium- and long-term consequences may take years to correct.
The risk of SA’s logistics capacity continuing to fail is mainly caused by the following:
• SA has lost its status as the main gateway into Africa and may continue losing business to many African
countries such as Mozambique and Namibia (and beyond). Consequential impacts include movement of
local head offices of multinationals to other countries, with a reduction in local skills and economically
active citizens.
• Failure of, and continued efficiency challenges relating to local ports (mainly Durban) negatively
impacting incoming and outgoing supply chains, with resultant revenue losses (including tax revenue to
the national fiscus).
• High unemployment in SA (with the majority of unemployed younger than 35) causing high poverty and
crime levels leading to public unrests, blockading of major routes and damage to transport and logistics
infrastructure.
• Inadequate capacity to safeguard goods and services in transit (increasing cash in transit robberies,
looting of trucks and trains, theft of rail infrastructure crippling the rail network, theft at sea by pirates,
and movement of unauthorised goods and undocumented people through borders).
• Extreme weather disrupting smooth movement of goods or travel, e.g. roads washed away or infrastructure
damaged by heavy rainstorms.

CAY-LOW MBEDZI THAPELO MATSAPOLA NICKY DOWNING
Brand Manager CRM Prac Chief Executive Officer
EasyEquities Risk and Internal Control and Founder
Manager RubiQ