South African SMEs in Transport Sector Face Growing Risks in 2025

Small and Medium Enterprises (SMEs) in South Africa continue to navigate a challenging business landscape in 2025 - facing economic fluctuations, supply chain disruptions, and security threats. These challenges are particularly heightened in the transport sector.

In recent years, businesses have endured a global pandemic, a cost-of-living crisis, high inflation, and rising interest rates - making profitability an ongoing challenge.

According to Rishai Neerachand, Executive Head of Business Insurance at Miway, SMEs are the backbone of South Africa’s economy but face increasing risks in an ever-evolving environment. “Economic instability, supply chain disruptions, and security threats - particularly in the transport sector - highlight the importance of proactive risk management,” he says. “It’s essential for businesses to plan ahead and implement strategies that protect their operations.”

Economic challenges
The transport sector remains a significant contributor to the South African economy; however, 2024 presented both opportunities and challenges for small to medium-sized enterprises (SMEs) in this space. While temporary relief in fuel prices and a strengthening Rand provided some optimism, these gains were short-lived as operational costs remained volatile.

SMEs in the transport sector operate on tight budgets, making them particularly vulnerable to fluctuations in fuel prices, interest rate changes, and inflationary pressures. Independent truck operators and ride-hailing businesses often have fewer financial cushions, while medium-sized logistics companies may be more resilient but still struggle to scale operations and meet regulatory compliance.

“SMEs working in the transport and logistics sector require proactive steps to safeguard business operations,” advises Neerachand. “Comprehensive short-term insurance solutions can help mitigate risks related to vehicle damage, cargo loss, and unforeseen business interruptions.”

Supply chain challenges
Efforts to improve logistics efficiency, including infrastructure investments, are underway, but transport and logistics-based businesses still face risks beyond these upgrades. Environmental concerns such as fuel spills, hazardous material transport, and regulatory compliance are becoming critical considerations.

“Discussions around sustainability and environmental accountability are gaining traction,” says Neerachand. “SMEs in transport and logistics must ensure they are prepared for both operational and environmental liabilities as regulations evolve.”

Security concerns
The surge in hijackings of delivery vehicles has also impacted SMEs in logistics, escalating operational costs and threatening profitability.

“With hijacking incidents on the rise, SMEs are not only losing stock but also facing supply chain disruptions, and potential reputational damage,” explains Neerachand. “Replacing stolen goods, repairing vehicles, and ensuring timely deliveries can place severe strain on cash flow.”

To fight these risks, SMEs in logistics must adopt strong risk management strategies. Cargo and transit insurance provides financial protection against theft and damage, ensuring business continuity and minimising losses. Additionally, collaborative security initiatives such as optimised route planning, real-time tracking, and secure loading and offloading protocols can enhance operational security.

Investing in technology-driven safety measures, including fleet management systems, panic buttons, geofencing, and driver training programmes, can also help prevent crime and improve overall supply chain resilience.

Beyond physical threats, cyber risks are becoming an increasing concern for businesses of all sizes. While large corporations may have the resources to implement advanced cybersecurity measures, smaller businesses often operate with limited protection, making them more vulnerable to cyberattacks.

“This vulnerability increases the risk of cyber fraud and data breaches, which can have severe financial and reputational consequences,” warns Neerachand. “As cyber threats evolve, SMEs must prioritise cybersecurity as part of their broader risk management strategy to protect sensitive information and maintain customer trust.”

As South Africa’s transport sector continues to grow alongside e-commerce expansion, SMEs must navigate an increasingly complex risk landscape. However, with proactive planning, comprehensive insurance solutions, and the adoption of security and technology-driven safeguards, transport and logistics-based SMEs can build resilience and safeguard their operations in 2025 and beyond. Neerachand concludes: “Risk is an inherent part of business, but with the right strategies in place, SMEs can protect themselves, grow sustainably, and continue contributing to South Africa’s economy.”