South Africa’s logistics sector is entering its next phase

Greater clarity on cost, demand and technology is reshaping how distribution networks are built and managed.

South Africa’s logistics sector is entering 2026 under sustained pressure, but with greater clarity about what matters. Cost volatility, changing consumer behaviour, international e-commerce and rising security risks are no longer emerging themes. They are structural realities, according to Ryan Gaines, a long-time logistics executive focused on retail supply chains. The City Logistics CEO believes the next phase the logistics industry will enter will favour operators that understand volume dynamics, specialise deeply and invest in systems that expose inefficiency rather than simply add capacity.

Cost pressure is redefining distribution networks

Logistics remains a cost line item rather than a revenue driver, and that distinction is becoming sharper. Gaines notes that logistics costs are rising faster than inflation for many retailers, particularly as networks extend into more distant locations. Retail expansion into smaller-format malls and strip developments in outlying towns is improving access, but it carries a higher cost-to-serve. 

E-commerce, however, is altering this equation unevenly. High online volumes can dilute fixed network costs, meaning some routes are becoming more efficient even as traditional retail supply chains face inflationary pressure. The result is a fragmented cost environment shaped by channel, geography and scale. 

Consumer behaviour is narrowing the peak 

Retail demand will become more compressed. What was once a broad three-month peak has tightened into shorter, sharper surges around events such as Black Friday and periods such as the festive season. Consumers are increasingly deal-driven, concentrating spend into specific moments. 

Underlying this developing trend is a more constrained and selective consumer. A weaker rand has pushed up import costs for many retailers, forcing price increases that reduce unit volumes. Gaines also points to rising credit-based purchases and slower cash sales. Not all categories are behaving the same, though. In fact, home-related purchases are holding up better than apparel (clothing, accessories), which challenges assumptions about how pressured consumers spend their hard-earned money.

Changes in international e-commerce

The entry of global e-commerce platforms in the South African market has permanently lifted local service expectations. Faster delivery, aggressive pricing strategies, and broader ranges of products to choose from have changed the way people shop. While large formal retailers are better positioned to absorb this shift due to their respective brand strength and scale, smaller independents face tougher challenges.

Gaines expects differentiation to centre increasingly on brand rather than access to online channels. Many smaller businesses are likely to rely more heavily on major marketplaces, with direct-to-consumer volumes under pressure. This is accelerating growth in small-parcel delivery and reshaping logistics models accordingly.

Fragmenting and localising networks

As e-commerce volumes grow, employment in warehousing and last-mile delivery continues to expand, even as automation limits growth in administrative roles. Logistics models are becoming more regional and contractor-based, supported by improved technology integration that makes it easier to coordinate multiple service providers. South Africa has historically relied on a small number of national logistics players. That concentration is beginning to ease, creating space for regional specialists and entrepreneurial delivery models. 

Technology spend is becoming more disciplined

Despite tighter budgets, investment in systems and data is continuing. Gaines believes that complex logistics networks cannot be managed without high-quality information, particularly as customer systems become more sophisticated and expectations around visibility rise. The focus is shifting toward technologies that surface hidden inefficiencies, such as delays at receiving points or underutilised assets, rather than headline innovation. The return is often improved resilience and cost control, not immediate margin expansion. 

Security is an unavoidable cost

Security has become one of the fastest-growing cost pressures in logistics. Risk to goods, vehicles, and people has forced operators to invest heavily in protection, inflating operating costs without adding consumer value. Tracking and surveillance technologies have improved risk management, but criminal activity continues to evolve. Gaines suggests that stronger cooperation between private operators and public authorities, particularly around enforcement, would materially improve outcomes. 

The forces shaping the next phase in logistics

Looking ahead, tariff uncertainty, shifting trade flows and the entry of global logistics players into Africa will continue to influence volumes. Climate considerations are also moving from principle to operational reality, shaping fleet and network decisions even where economics remain challenging. Gaines believes this is diverting income away from retail, placing further pressure on supply chains when growth stalls.

What preparedness looks like 

Well-positioned logistics companies, Gaines argues, are those that are clear about who they serve. Deep sector focus, operational alignment, and simplification are becoming decisive advantages in a low-growth environment. Rather than trying to anticipate every disruption, the emphasis is on building networks that can adapt. In logistics, preparedness is increasingly about resilience, clarity and disciplined execution.