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Transport and logistics sector bounces back despite April setbacks
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OFFICIAL PUBLICATION
Heavy rains and floods that occurred in Kwa-Zulu Natal in mid-April had a severe negative impact on the South African logistics sector .
The flooding was particularly devastating in the Durban-South area and resulted in a major disruption to the Port of Durban , the fourth largest in the Southern African Development Community ( SADC ) region .
The overall Ctrack Transport and Freight Index for April 2022 declined by 0.4 % compared to March but was still up by 8.6 % compared to a year ago , although this represents a setback compared to March ' s strong 12.4 % year on year increase .
Three of the six sectors that the transport and freight index measures declined during April , with the biggest contractions evident in sea freight and rail , both of which were particularly hard hit by the floods in the Durban area . Not only the port but also surrounding roads were affected and resulted in activities grinding to a halt for a few days . The port is the primary multipurpose gateway to the main economic hub of Gauteng – with a key focus on containers , automotive and liquid bulk transport , and is critical for the stability of the South African economy .
Taking a closer look reveals that container handling dropped by 22.8 % in April compared to a year ago , while other cargo handling ( excluding vehicles ) dropped by a notable 16.8 %. Because the index is calculated on a three-month moving average , the impact is somewhat softened , with sea freight declining by 7.8 % in April compared to a year ago , which was the biggest decline for this sector since August 2010 .
Rail freight also declined further during April and now indicates a 13.4 % year on year decline . This continuous decline can partly be attributed to the damage to the Durban Port . In addition , sections of the main railway line between Cato Ridge and Durban were impacted for days by severe wash aways and mudslides , particularly in areas where communities have encroached on the rail reserve . In addition to the flood-related challenges , ongoing issues pertaining to inadequate infrastructure and crime incidents on rail lines remain relevant and contributed to a 2.9 % overall year on year decline in the rail freight sector as measured by the index .
" The devastation caused by the floods in KZN was tragic to behold . However , it is truly impressive how the industry has recovered and shows the transport industry ' s commitment to the South African economy recovery , despite all the ongoing disruptions from a variety of external factors ," says Hein Jordt , chief executive officer of Ctrack Africa .
Transport of liquid fuels via the Transnet pipeline lines ( TPL ) remained mostly unaffected during April , with no weatherrelated impact . TPL has also accumulated stock at the Jameson Park Terminal to
Ctrack | economists . co . za
By Ctrack
The changing landscape relating to online shopping and the fast-growing courier and home delivery sector remains an extensive contributor to the growth in the road freight sector .
feed the reef ( Gauteng ) and ensure supply security for the inland market . The overall Transport via pipeline segment returned a 6.3 % year on year growth in April .
Thanks to the gradual recovery of international supply chains and the normalisation of economic conditions post COVID-19 , air transport continues to show steady growth . The air freight segment of the index grew by 3.7 % in April compared to a year ago . It is expected that air freight will continue to show growth as the international travel industry returns to more normal levels over the next year or two .
Road freight remains the star performer among the various sub-sectors of the logistics industry , and during April , this was once again the case . Road freight has certainly picked up whereas rail freight has fallen short in recent years . As such , the Road Freight segment of the index returned growth of 19.8 % compared to a year ago , which is the strongest growth outside of the recovery in 2021 from the Covid-19 hard lockdown levels .
The changing landscape relating to online shopping and the fast-growing courier and home delivery sector remains an extensive contributor to the growth in the road freight sector .
TRANSPORT & FREIGHT INDEX AND GDP GROWTH . It is a well-known fact that in most countries , the transport sector ' s performance and a country ' s gross domestic product have a close relationship . Similarly , in South Africa , the index follows a similar trend to that of the South African GDP .
While this year ' s Q1 real GDP growth was stronger than expected , with growth of 1.9 % compared to Q4 2021 ' s revised growth rate of 1.4 %, the latest figures measured by the index indicate that the economy has lost some momentum in Q2 . This could be due to various factors , including the flooding in KZN , Stage 4 load shedding during April and May , inflation , and higher interest rates . This trend identified was mirrored by a notable drop in the ABSA PMI and passenger vehicle sales in April .
While the May 2022 ABSA PMI did recover from the very low levels of April 2022 ( 54.8 in May vs 50.7 in April ), the index remains below the March 2022 level ( 60.0 ), indicating that the post-April recovery could be slower than initially expected .
CONDOLENCES " It is with great sadness , that we recently had to say goodbye to colleague and friend , renowned economist Mike Schüssler , following a battle with cancer . Schüssler and his team at Economists . co . za produced the Ctrack Transport and Freight Index data since its inception in 2019 . During this time , the CTFI has become an economic indicator and performance gauge of the South African logistics and supply chain industries . Because the CTFI has become a trusted barometer by which our customers and the wider industry can gauge the performance of the transport sector as a whole , we are committed to continuing to produce these indicators , and will advise shortly on the format of this report as Mike was instrumental in these reports . Rest in peace , Mike . You will be sorely missed ," concluded Jordt . CLA
Road freight remains the star performer among the various sub-sectors .
COLD LINK AFRICA • July / August 2022 www . coldlinkafrica . co . za 5