May 2023 | BUSINESS FLEET AFRICA
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sector has slowly been recovering from
this low base, with growth of 10.3%
recorded in the first quarter. Container
handling increased by a notable 27.2%
on a monthly basis in March but remains
17.9% below the September 2022
pre-strike level. Contributing to this
slow recovery are notable discrepancies
among the different ports. Container
handling in Cape Town was only 2.6%
below pre-strike levels in March, where-
as the Durban port is still 14.7% behind,
and The Port of Ngquara is performing a
notable 40.2% lower.
In light of the importance of Sea
Freight in the logistics sector, but also
for the efficiency of trade in the broad-
er economy, Transnet Port Terminals
(TPT)’s is putting plans in place to
enter into long-term agreements with
original-equipment manufacturers
(OEMs) for the supply and life-cycle
maintenance of key port-handling
equipment. It aims to position the
business for significantly higher levels
of efficiency across its 16 terminals,
which have faced significant disruption
in recent years.
“It is evident that the Sea Freight
sub-sector has been an under-performer
relative to the broader transport and
freight sector since early-2021. A step
up in efficiency would go a long way in
restoring the sector to its potential and
increasing its contribution to the broad-
er economy. The plans being put in place
are a great prospect, but implementing
the strategy will be key,” adds Jordt.
After reaching an all-time low in
January 2023, Rail Freight continued
to recover in March, though off an
extremely low base. While still deep in
negative territory on an annual basis,
the Rail Freight component of the Ctrack
Transport and Freight Index increased
by 11.3% in March, which follows
February’s 6.8% growth. Strong growth
of 15.5% was recorded during the first
quarter, however on an annual basis, the
Rail Freight component has declined by
13.2% year on year ending in March. This
represents the 12th consecutive decline,
confirming that rail remains the achilles
heel of the South African logistics sector,
a position the sector will likely retain for
many years to come.
During March 2023, the Road Freight
component of the Ctrack Transport
and Freight Index increased by 15.9%
year-on-year, representing the 24th
straight month of double-digit annual
growth rates. Taking a closer look
reveals some interesting trends. The
number of heavy trucks on the N4 toll
routes continues to increase notably on
an annual basis, a trend that has been
firmly entrenched since August 2021,
while the number of heavy trucks on
the N3 toll route declined on an annual
basis, though showing some growth in
March 2023 compared to the previous
month. Overall, Road Freight payload
for the country decreased by a notable
9.1% in March compared to the previous
month but showed continuous growth
compared to a year earlier. The sector
faces on-going challenges, including
crime, sabotage and notable operational
cost increases.
Air Freight, which turned out to be
one of 2022’s star performers, started
the year on the back foot but picked up
marginally in March, increasing by 0.3%
while remaining flat compared to a year
earlier. Mixed trends were observed;
cargo load on planes increased by 11.2%
on a monthly basis in March, following
growth of 8.7% in February, while total
consolidated airport flight movements
also increased by a notable 16.2%.
Other underlying components of the
sub-sector declined. According to the
International Air Transport Association
(IATA), lower demand for air cargo is
evident across the globe, reflecting
multiple headwinds facing the global
economy and spilling over to trading
partner countries. Air cargo tonne-ki-
lometres (CTKs) to Africa decreased
a further 3.4% year on year in March,
following February’s 9.4% and January’s
10% annual decreases.
The Storage and Handling sub-sector
of the Ctrack Transport and Freight
Index was under pressure for most of
2022, with a trend of declining inventory
levels evident. The Transnet strike just
worsened matters, resulting in a further
20.8% decline in March compared to a
year ago, a monthly decline of 1.7% and
a quarterly decline of 11.6%.
The transport of liquid fuels via
Transnet Pipelines (TPL) increased by
3.2% month on month during March,
resulting in a 14.2% quarterly increase.
However, this is still tracking 1.4% lower
than the year before.
Ctrack Transport & Freight
Index and GDP growth
The transport sector defied expectations
of underperformance in the fourth
quarter of 2022 to be the best sectoral
performer, and all indications are that
the transport sector will save the day for
the South African economy in the first
quarter once again. March’s solid im-
provements, as measured by the Ctrack
Transport and Freight Index, showcased
a strong quarterly performance of 6.6%
in the first quarter of 2023.
“The ongoing challenges of harsh
load shedding, high living costs, inflated
production costs, rising wage demands
and elevated interest rates mean that
many sectors of the economy are either
contracting or only showing marginal
growth. In this environment, the trans-
port sector’s resilience creates a sliver
of hope for the South African economy,”
concluded Jordt. BFA
Table 1 Change in Ctrack Transport and Freight Index in March 2023
Percentage change between
Rail
Road
Pipeline
Sea
Air
Storage and
handling
Ctrack Freight
Transport Index
March 2023 vs March 2022 (y/y)
–13.2%
15.9%
–1.4%
–10.9%
0.0%
–20.8%
3.3%
March 2023 vs February 2023 (m/m)
11.3%
2.9%
3.2%
–0.9%
0.3%
–1.7%
3.3%
Quarter to March 2023 vs. Quarter to December 2022 (q/q)
15.5%
8.4%
14.2%
10.3%
–0.7%
–11.6%
6.6%
Note: The row highlighted in blue is the main Ctrack Transport and Freight Index values used.
Source: Ctrack and economistscoza, TNPA, StatsSA, SARS, N3 and N4 toll concessions, ACSA, ACOC, IATA.