Andrew Maren, founder and CEO of ProfitShare Partners
Earlier this year, 11 private train operating companies were approved to access the national freight rail network, with operations expected to begin from April 2027. Together, they plan to increase freight throughput to 24 million tonnes per year. Transnet Freight Rail also recorded a 4.4% year-on-year improvement in volumes during the first quarter of the 2026/27 financial year, moving 42 million tonnes compared with 40.2 million tonnes in the same period a year earlier.
These developments are significant because South Africa’s transport constraints reach deep into the economy. When freight moves slowly or unpredictably, the effects are felt by manufacturers, exporters, retailers, agricultural producers, and the businesses that support them. Government has placed logistics reform at the centre of its economic recovery programme, with a longer-term ambition to shift more freight back onto rail and improve the performance of strategic corridors.
Changes at the network level can create commercial activity far beyond the companies that operate trains, terminals, or major logistics assets.
Transport depends on a much wider ecosystem of businesses providing maintenance, engineering support, warehousing, fleet services, equipment, security, technology, repairs, and other specialist services. Some will already be established suppliers. Others will be smaller businesses that encounter opportunities as investment increases, new operators enter the market, and existing players expand or change how they operate.
For smaller suppliers, the pressure often appears when the work requires them to stretch beyond their normal operating rhythm. A maintenance contractor may suddenly need to carry more technicians, equipment, and supplier commitments for longer than usual, while a logistics business may have to support higher volumes before the customer’s payment cycle catches up. The opportunity can be commercially sound yet still require more working capital than the business normally has.
This is where supplier readiness becomes important. I do not believe the answer is simply to make more funding available and assume SME participation will follow. Businesses entering transport supply chains need to understand what the work will demand of them. They need realistic pricing, reliable suppliers, appropriate compliance, and a clear view of when costs will be incurred relative to payment.
Capital is part of that preparation. A small supplier with confirmed work from a credible buyer may be perfectly capable of delivering, but the transaction can still stretch its existing cash cycle beyond what the business can comfortably carry. Growth often happens this way. The next contract is larger than the previous one, or requires the business to commit more resources before any payment is received.
Traditional lending assessments can struggle with that kind of growth because they tend to focus on historical performance first. A younger company may have limited assets or a shorter financial history, even though the specific opportunity before it is commercially viable.
Transaction-linked funding approaches the situation from a different direction. The transaction itself is an important part of the assessment, including the buyer's credibility, supplier arrangements, expected margin, delivery requirements, and payment flow.
At ProfitShare Partners, we structure funding around verified purchase orders, contracts, and invoices. The purpose is not to finance speculative expansion because a sector appears to be growing. It is to support confirmed work where the underlying transaction can be assessed and the business has a credible plan to deliver it.
That distinction is particularly relevant as South Africa’s transport sector changes. Government has set a target of moving 250 million tonnes of freight by rail by 2029, while private operators are preparing to enter the network and Transnet continues work to restore capacity. Reform on that scale will take time, and there will undoubtedly be difficult periods along the way. It should nevertheless create a different commercial environment around freight and logistics.
Smaller businesses that want to participate cannot wait for a tender award before thinking about how they will finance delivery. Working-capital requirements, supplier commitments, payment timelines, and operational capacity need to be understood while the opportunity is still being assessed.
Larger buyers also have a role. Procurement that brings smaller suppliers into the value chain works better when contract terms are clear, mobilisation requirements are realistic, and payment processes do not place unnecessary pressure on businesses with smaller balance sheets.
Transport Month rightly draws attention to the infrastructure and services that keep South Africa moving. As reform progresses, we should pay equal attention to the businesses that will supply, maintain, and support that system.
The opportunity for SMEs will not come from reform alone. It will come from being commercially and financially ready when the work begins to move.
