The government has put in place a further long-term regulatory measure to address the current challenges facing South Africa’s transport and logistics infrastructure. The Minister of Trade, Industry and Competition (MTIC) published block exemptions to allow companies operating in the transportation infrastructure, logistics or related industries to collaborate in ways that may ordinarily transgress the Competition Act. These block exemptions are similar to the block exemption put in place to address energy supply constraints.
The Block Exemption for Ports, Rail and Key Feeder Road Corridors, 2025 (the Block Exemption) enables companies to effectively apply to the Competition Commission for permission to coordinate their efforts for the purpose of addressing operational inefficiencies and infrastructure capacity shortages; resolving operational breakdowns in port and rail infrastructure; and ensuring security of supply of goods; and contributing to measures aimed at resolving these challenges. All while, of course, complying with the applicable sector laws and policies.
South Africa's transport infrastructure faces significant challenges, including congestion and delays at ports due to operational inefficiencies and underinvestment, a deteriorating rail network plagued by infrastructure decay and funding shortages, and key road corridors suffering from poor maintenance and integration issues. It has long been known that these problems hinder the efficiency of freight transport, impacting the country's economic competitiveness and daily business operations, and that investment and coordination between the public and private sector is required to address these problems.
The Block Exemption allows for collaboration between companies in specifically delineated instances depending on whether the conduct is aimed at addressing issues faced at ports, in respect of rail transport or related to key feeder road corridors.
- Coordination efforts related to ports should be focused on ensuring the efficient movement of goods and services through major ports, as well as streamlining customs procedures and prioritised handling of essential goods.
- In respect of rail, the focus is on enhancing the capacity and reliability of rail networks. Potential exemptions cover expedited maintenance and repair activities, as well as the prioritisation of freight services over passenger services in certain cases.
- Further coordination aimed at maintaining and improving critical road links that support major economic activities is envisaged.
The collaboration may, for example, include sector initiatives to improve efficiencies, joint funding or joint investment programmes and collaboration on procurement and sharing of services.
Importantly, the Block Exemption does not exempt cartel conduct, specifically firms are not permitted to fix prices of goods and services and may not collude on tenders. Furthermore, their coordinated effort should not harm new entrants, small, medium and micro-enterprises and firms owned and controlled by historically disadvantaged persons but should rather encourage their involvement in the coordinated solution driven initiatives.
The Block Exemption seeks to encourage innovative solutions to the transport infrastructure crisis and companies should consider whether their own plans may be bolstered through effective coordination with other industry participants.
