“Navigating grain logistics in 2025” was the topic of a presentation delivered at a Grain Handling Organisation  of Southern Africa (Gosa) seminar by Grain Carriers CEO, Tom Terblanche. In his talk he raised a thought-provoking question often posed by well-known rugby referee and Springbok consultant, Jaco Peyper: “How good is your bad?”

This question framed a central challenge for the grain logistics industry: Is it structured in such a way that, even on a difficult day, it can still meet demand and continue delivering effectively? Terblanche’s message was ultimately hopeful. Despite sizable challenges, the industry continues to move grain to where it is needed in a cost-efficient manner, thereby playing its part in ensuring food security in the country.

He began by highlighting the critical role of road transport within the grain value chain. Around 90% of grain is transported by road annually, with rail accounting for the remaining 10%. The road transport sector has proven its ability to deliver grain reliably and efficiently, not only serving the domestic milling industry but also moving a substantial share of imports and exports to and from ports.

Historical context

Prior to the 1990s, most grain in South Africa was transported by rail under a single-channel marketing system governed by Grain Marketing Boards. This changed following the political transition in 1994. By 1996, the single-channel system was dismantled in favour of a free-market approach, paving the way for the rapid expansion of road transport.

The ability to move grain directly from farm to end user made road transport particularly attractive, especially over shorter distances where it could compete with rail in both cost and convenience. Rail, however, remained effective and cost-efficient over longer distances, creating a good balance with each system serving its own niche. Terblanche noted that such a balance is essential in a healthy economy and expressed hope that it may be restored in the future.

The free market also accelerated the rise of grain traders, who today move an estimated 90% of the country’s  grain. This significantly expanded the client base for road transporters. Terblanche illustrated this growth using his own company: Grain Carriers had around ten clients in 1996, grew to 50 by 2014, and reached around 150 by 2025.

In recent years, collaboration between traders and transporters has evolved into the so-called ‘mill-door’ model, which today is probably the most popular way of delivering grain. In this system, the trader completes a transaction with a miller and appoints a transporter to deliver to a specific mill within a specific timeframe. Responsibility for delivery rests with the trader and the transporter.

Structure of the value chain Terblanche identified four main participants in the grain transport value chain: traders, storage operators, transporters, and receivers. A strong relationship between the traders and transporters  in this chain is essential.

The roles of the various stakeholders are well established. Traders purchase grain, manage risk through hedging, sell to buyers, and coordinate logistics. Storage operators – whether cooperatives, agricultural companies,  or producers with on-farm facilities – are a well-organised segment of the value chain that efficiently manage stock and quality. Temporary storage solutions are also popular. These operators play a crucial role in regulatory compliance, including vehicle verification and weight control to prevent fraud.

Road transporters form the third segment of the value chain and have demonstrated their capacity to move grain efficiently, in compliance  with regulations, and at competitive rates. They also make use of advanced technology to ensure operational security.

However, the final segment – the grain receivers, such as processors and by-product distributors – represents the weakest  link in the chain. This sector faces significant technological challenges.

Bottlenecks and inefficiencies Most intake facilities were built for rail rather than road transport, resulting in inefficiencies  when handling trucks. Poor infrastructure maintenance further exacerbates these challenges.

The mill-door model does not help to alleviate these challenges. With multiple transporters delivering to the same site, inadequate planning and limited infrastructure capacity often lead to delays. In many cases, the receiver is also the sender, as raw products are received and processed products are transported onwards. Very often, the same vehicle that delivered the raw product is scheduled to reload the processed product. However, delays and insufficiencies pose a huge challenge.

This weak link in the value chain comes with cost implications. Some of these implications are fewer loads per truck, which means more trucks on the road and fewer kilometres per truck, which in turn drives up costs. Terblanche illustrated this with a practical example: the fixed monthly cost of a new truck and trailer can be around R132 423. At 5 000km per month, this equates to a fixed cost of R26,48/km. At 10 000km it comes down to R13,24, and at 14 000km to R9,46. This is the effect that inefficiencies, and therefore less than optimal kilometres per truck per month, have on transport costs.

Challenges facing transporters Apart from this obvious constraint, the industry faces several other challenges. Rising driver costs are a concern, as well as the National Bargaining Council, which Terblanche described as disconnected from industry realities. Drivers often spend long periods away from home and may not cover enough distance to earn a substantial income. As with so many of the state institutions, there is a lack of understanding of specific industry-related problems.

Road conditions are deteriorating despite maintenance efforts, and existing infrastructure struggles to accommodate heavy vehicle volumes. This underscores the need to revitalise a reliable component of rail transport.

 

Operational disruptions, such as strikes and protests, sometimes involving road closures and vehicle burnings, result in substantial financial losses. Escalating toll fees, fuel levies, and Road Accident Fund contributions further increase cost pressures.

In addition, the industry must contend with rapidly rising input costs, particularly for vehicle replacement, as well as the ever-present  risks of theft and hijackings.

Conclusion

Despite these challenges, Terblanche urged stakeholders to be proactive and collaborative. Improving coordination across the value chain and engaging constructively with all parties is essential. “We have to take control and request that millers manage their delivery infrastructure to improve efficiency. Ultimately, the goal is to perform well even on our worst days.”