South Africa’s Minister of Trade, Industry and Competition, working alongside the Competition Commission, implemented new regulations introducing a block exemption for specific collaborative practices in the rail, port, and key feeder road sectors.
These measures are designed to allow greater cooperation among various market participants, including competitors, without breaching the country’s Competition Act (Act No. 89 of 1998), as amended. The primary aim of these regulations is to promote collaboration in order to address significant operational and infrastructure-related challenges in the national logistics and transport networks.
Specifically, the regulations are intended to lower operational costs, enhance service delivery, minimise inefficiencies, and ensure the consistent movement of goods across key transport corridors. By fostering strategic cooperation, the government hopes to improve overall supply chain resilience and reduce persistent delays and losses that currently affect the sector.
The exemption applies to conduct that would typically be prohibited under sections 4(1)(b)(i) and 4(1)(b)(ii) of the Competition Act. This includes, for instance, coordination on the purchase price or trading conditions (excluding selling prices), and the division of markets by customers, suppliers, regions, or types of goods or services. These prohibitions are waived under the exemption when the collaboration contributes to improving the country’s logistics infrastructure and services.
Objectives
In the ports sector, the exemption permits coordinated planning on port capacity, re-routing of cargo, and managing traffic flow into ports through shared data such as stack levels or weather disruptions. Industry stakeholders are also allowed to work together on night-time operations, joint infrastructure upgrades, and the sharing of independent consultants. For example, exporters using a congested terminal may share delivery data and coordinate their schedules to alleviate peak-time congestion.
Regarding the rail sector, the exemption allows for joint management and investment in railway infrastructure, shared use of locomotives, and coordinated freight volumes to enhance efficiency. There is also provision for collaborative studies, funding strategies, and joint procurement of advisory services. A practical application could involve a group of exporters pooling resources to fund maintenance and upgrades for a shared railway line, with repayment structured through reduced tariffs from the rail service provider.
For key feeder road corridors, which link directly to port and rail infrastructure, the regulations allow for collaborative road maintenance, infrastructure development, shared technical studies, and the use of common consultants. Trucking organisations, for instance, might co-sponsor a study aimed at reducing road surface wear and congestion on routes leading into major ports.
However, certain types of conduct remain strictly prohibited under the exemption. These include any agreements involving the fixing of selling prices, collusive tendering, exclusionary practices that prevent access by new entrants or disadvantaged businesses, and any arrangement that goes against sector-specific laws or policies. Also excluded are practices like resale price maintenance and merger transactions.
Any company or group wishing to benefit from these exemptions must first submit a formal request to the Competition Commission. The Commission will then consult relevant sector regulators and the Department of Trade, Industry and Competition before issuing a decision. If no ruling is provided within 30 business days, extendable by an additional 30 days, the proposed conduct is automatically deemed approved. The Commission also has the discretion to determine the timeframe for which the exemption applies to each case.
These regulations will initially remain effective for a period of 15 years, with the option to extend for another 15 years. If the regulations are withdrawn in the future, firms will be given sufficient time to phase out any ongoing arrangements. Importantly, just because the regulations exist for 15 years does not guarantee individual collaborations will be permitted for that full duration.
In conclusion, this exemption offers a significant opportunity for stakeholders in South Africa’s freight and logistics industries to cooperate lawfully and effectively to address long-standing systemic issues. By enabling responsible and transparent collaboration, the regulations provide a pathway to revitalise critical transport corridors, strengthen economic performance, and enhance the overall efficiency of goods movement across the country.