Transnet SOC Ltd - Statistics & facts
In 2017, the South African Department of Transportation introduced a white paper aiming to expand the country’s logistics market. This white paper fueled a rise in interest from overseas investors and changed the market share of internal competitors. Transnet is the largest public logistics company operating in South Africa with the central government as the main shareholder. As such, Transnet has a monopoly in the South African transport and logistics market and is primarily responsible for the operations and general freight management of land, sea, and air freight.
Since 2018, there have been several challenges that have impacted the performance of Transnet as well as its global competitors. These include, but are not limited to, poor infrastructure and high crime rates.
Like many transport and logistics companies across the globe, Transnet recorded a larger profit than normal in 2021, thanks to the world’s reliance on the transport of personal protective equipment (PPE) and later the distribution of vaccines in addition to normal logistical needs. With a record profit of nearly 14.7 billion ZAR, an increase of over 78 percent from 2020, Transnet seemed to overcome the challenges faced by all but tackled well by few. Further reflection of Transnet’s performance can be seen in the company’s EBITDA margin, where the company has consistently stayed below 50 percent, even during the trials of the COVID-19 pandemic. Its port subsidiary (Transnet National Port Authority) was also able to keep operating, though it did not record an increase in profit compared to the company’s land-based logistics operations, citing not only the coronavirus pandemic but also poor port infrastructure in the country as a cause for this financial performance.
With Transnet’s current performance and the rise in infrastructure investment from its competitors, the North-South Sub-Saharan corridor has and will continue to become one of Africa’s most important trade corridors. South Africa plays a crucial role as a beginning and end point for the trade of some of Africa’s most valuable and sought-after commodities. Despite facing heightened competition, Transnet itself is integral to the success of this trade corridor, especially with the revenue from the export of raw materials increasing year-on-year since 2018. With its current results and targets, Transnet will continue to be a key asset in Sub-Saharan trade.
Since 2018, there have been several challenges that have impacted the performance of Transnet as well as its global competitors. These include, but are not limited to, poor infrastructure and high crime rates.
COVID-19, A challenging time?
Like many transport and logistics companies across the globe, Transnet recorded a larger profit than normal in 2021, thanks to the world’s reliance on the transport of personal protective equipment (PPE) and later the distribution of vaccines in addition to normal logistical needs. With a record profit of nearly 14.7 billion ZAR, an increase of over 78 percent from 2020, Transnet seemed to overcome the challenges faced by all but tackled well by few. Further reflection of Transnet’s performance can be seen in the company’s EBITDA margin, where the company has consistently stayed below 50 percent, even during the trials of the COVID-19 pandemic. Its port subsidiary (Transnet National Port Authority) was also able to keep operating, though it did not record an increase in profit compared to the company’s land-based logistics operations, citing not only the coronavirus pandemic but also poor port infrastructure in the country as a cause for this financial performance.
The future of Sub-Saharan logistics.
With Transnet’s current performance and the rise in infrastructure investment from its competitors, the North-South Sub-Saharan corridor has and will continue to become one of Africa’s most important trade corridors. South Africa plays a crucial role as a beginning and end point for the trade of some of Africa’s most valuable and sought-after commodities. Despite facing heightened competition, Transnet itself is integral to the success of this trade corridor, especially with the revenue from the export of raw materials increasing year-on-year since 2018. With its current results and targets, Transnet will continue to be a key asset in Sub-Saharan trade.
