South Africa’s logistics costs are projected to reach R1.16 trillion in 2026, equivalent to 14.6% of GDP, with transport expenditure accounting for almost 80% of the increase from 2025.
The projected share of GDP is the highest in the 2003–2026 period covered by the new State of Logistics 2026 report, produced by GAIN Group with sponsorship from Absa Business Banking and the Western Cape Government’s Mobility Department. The report was released on October 22.
The national logistics bill is estimated to have exceeded R1 trillion for the first time in 2025, with a further R147 billion increase forecast for 2026.
“The trillion-rand figure brings the scale of South Africa’s logistics challenge into sharp focus,” said Zane Simpson, director at GAIN Group.
“The key issue, however, is not simply how much we spend on logistics, because South Africa is inherently a transport-intensive economy. It is how much of that cost can be avoided through better modal choices, optimising utilisation of available logistics capacity, more reliable infrastructure and more efficient operations.”
Transport remains the largest cost component, accounting for approximately R683bn, or 59% of total logistics expenditure, in 2026. Transport costs alone are projected to rise by R117bn from 2025.
Inventory carrying costs are forecast to increase from R182.5bn in 2025 to R191.4bn in 2026. Warehousing and management and administration account for a further R151.7bn and R130.3bn, respectively.
The report also points to improvements in freight rail, with the estimated economic cost of its underperformance falling from R410.7bn in 2022 to R180.8bn in 2025. The remaining burden is equivalent to approximately R495 million a day.
Rail freight volumes recovered from about 149.5 million tonnes in 2022/23 to 167.9 million tonnes in 2025/26. However, the report cautions that higher volumes will only translate into economic gains if accompanied by reliable services, competitive costs and a more appropriate allocation of freight between road and rail.
“For businesses, logistics is not an abstract infrastructure issue. It directly affects input costs, working capital and reliability,” said Justin Schmidt, sector executive for transport and logistics at Absa Business Banking.
“The encouraging signs of rail recovery show what is possible. Building on this momentum can support a more efficient freight system, helping to lower logistics costs and strengthen South Africa’s competitiveness.”
The report identifies three priorities for reducing avoidable expenditure: moving freight on the most suitable mode, improving utilisation of available transport capacity and increasing operating efficiency.
Its modelling suggests that, had these improvements been implemented from 2022, logistics costs could have been around 12.7% of GDP in 2026, rather than 14.6%. This represents potential savings of about R149.3bn in 2026 and nearly R667.5bn over the five years from 2022.
Pressure on the system is expected to grow, with freight demand forecast to rise from 790.1 million tonnes in 2024 to just over one billion tonnes by 2055.
