South Africa’s transport corridors need financial corridors too

Lloyd Caughey, Head of Trade Finance, Access Bank South Africa

For any business moving goods, the transport journey starts on the balance sheet before the truck or train leaves. By the time an exporter dispatches an order, money has already gone into stock, production, freight and handling, and that capital remains committed until the customer pays. Every extra day in the journey extends the period during which the business must carry that cost.

That is one reason I believe financial infrastructure belongs in South Africa’s Transport Month conversation. Roads, railways, ports, and border posts determine how efficiently freight moves through the country. The businesses using those routes also have to finance the period between placing an order and finally being paid.

South Africa is working to improve the physical side of that journey. Government’s freight reforms are opening the national rail network to private operators. Train slots covering 24 million tonnes a year have been conditionally awarded to 11 train operating companies, with the first private operator expected to start in April 2027. At the inaugural National Transport Conference in March, government reported that 160 million tonnes of freight had moved by rail in the previous financial year, 5.5% more than the year before.

Better transport performance can shorten delivery times and improve reliability. For the businesses moving the freight, it can also reduce the period for which money is committed to a transaction.

The cash cycle

By the time goods leave a supplier, the buyer may already have committed a sizeable portion of the transaction cost. An importer of machinery, for example, could have paid a deposit and freight costs long before the equipment reaches the business. Exporters often carry production costs through manufacturing and delivery before the customer’s payment falls due.

That period between paying out and getting paid is where working-capital pressure builds. For a bank, understanding the transaction means looking at how long the goods will be in production and in transit, the payment terms agreed between the parties, and when cash is expected to return to the business.

Sometimes the pressure comes before the goods move, when a supplier wants greater certainty that payment will be made. A letter of credit can help in that situation. In other cases, the goods have already been delivered, and the business is waiting for the customer to pay, which is where invoice discounting can ease the cash-flow gap. The finance needs to fit what is actually happening in the transaction.

At Access Bank South Africa, our corporate banking offering includes working capital finance, invoice discounting, export solutions, and other trade finance facilities. These tools allow financing to be structured around how a business buys, moves, and sells goods.

Funding needs can vary widely depending on how the business trades. A manufacturer that carries production costs before an export is paid faces different pressure from a distributor that has cash tied up in imported stock. The timing of those outflows and receipts should shape both the size of the facility and the period over which it is needed.

Understanding them early gives the business and its bank more scope to structure support before a cash-flow gap begins to affect operations.

Currency risk travels with the goods

Cross-border trade adds another timing issue because the exchange rate can move while goods are in production or transit. A South African business trading across borders can carry currency exposure for as long as the transaction remains open. An importer might agree a price weeks before payment is due, while an exporter receiving foreign currency still has salaries, suppliers, and other operating costs to cover in rand.

Foreign exchange planning helps a business understand the potential impact on its margins before a payment falls due. Access Bank supports importers and exporters with foreign-exchange and international trade services that help businesses manage payments and trade flows across borders. The task is to identify where the currency exposure lies in the transaction and determine how much uncertainty the business can reasonably bear.

Better logistics can release working capital

A delay at a port, rail terminal, or border post has financial consequences because inventory and cash remain tied up for longer. Delivery dates move, payment milestones may shift, and businesses can find themselves financing a shipment beyond the period they expected.

More reliable freight movement gives businesses a firmer basis for planning stock, delivery, and liquidity. South Africa’s logistics reforms therefore have implications for balance sheets as well as the transport network.

Transport Month is a useful reminder of the economic role played by the country’s roads, rail, ports, and other infrastructure. For importers, exporters, suppliers, and logistics businesses, the financial route running alongside that infrastructure deserves the same attention.

A corridor becomes commercially useful when a business can move goods and sustain the transaction until the money arrives. Stronger transport links and financial arrangements that reflect the trade cycle need to develop together if businesses are to use those corridors with confidence.

Lloyd Caughey, Head of Trade Finance, Access Bank South Africa