BUSINESS FLEET AFRICA | April 2023
WWW.BUSINESSFLEETAFRICA.CO.ZA
TRANSPORT AND FREIGHT INDEX
Following a challenging 2022, the South
African logistics sector bounced back
somewhat during January 2023, and
that momentum was sustained during
February. The Ctrack Transport and
Freight Index (Ctrack TFI) increased by
1.7% in February compared to the previ-
ous month, following a revised monthly
increase of 1.4% in January (and declines
in the preceding four months). On an
annual basis, the Ctrack Transport and
Freight Index increased by 2.5%, which
is a welcome improvement even though
the increases are far below the annual
growth rate of 13.7%, which was record-
ed as recently as August 2022. However,
all indications are that the industry is on
a sustained positive trajectory.
All the sub-sectors of the logistics
sector continue to reflect vastly different
performances, which proved to be a
major factor in the overall industry’s
resilience. The detrimental impact of the
strike on Sea and Rail Freight has, for ex-
ample, turned out to be a boosting factor
for Air Freight and Road Freight, thus
offsetting the overall negative impact.
In February, four of the six sub-sectors
declined on an annual basis, whereas four
of the six increased on a monthly basis,
indicating positive near-term momentum.
Zooming into the sub-sectors
revealed a welcome improvement in the
performance of Rail Freight, although 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 6.4% on a monthly basis. On an
annual basis, the Rail Freight component
returned a decline of 20.9% in February
2023, the 11th consecutive decline
recorded and confirmation that rail
remains the Achille’s heel of the South
African logistics sector. Having under-
performed for years, the government
has finally invited the private sector
to get involved in a potential solution.
Enabling third-party access to the rail
network is critical for addressing the
declining performance of Rail Freight,
and therefore, the plan to separate the
infrastructure and operational aspects
of the rail business and to establish a
separate infrastructure manager within
Transnet Freight Rail are seen as crucial
steps towards creating a level playing
field for public and private operators on
the country’s rail network. These steps
to address the sector’s challenges are in-
deed welcomed and could potentially be
a major game changer for the logistics
sector if they do reach fruition.
While the obvious beneficiary of the
dismal state of Rail Freight has been the
Road Freight sub-sector, the growing
number of heavy trucks on South
African roads is having a negative impact
on the quality of the road network
and accelerates the need for ongoing
maintenance while also contributing to
increased greenhouse emissions. The
growing focus on environmental con-
cerns has recently placed the unhealthy
split between road and rail transport
under the spotlight. A report themed
‘Decarbonising South Africa’s Transport
Sector’ states that to enable South Africa
to cut greenhouse gases in the transport
sector to zero, between 15% to 20% of
road traffic must move to rail.
The South African logistics sector
continued to improve during February
Graph 1 Ctrack Transport and Freight Index % change on a monthly basis
Jul-18
Jul-19
Jul-20
Jul-21
Jul-22
Jan-18
Jan-19
Jan-20
Jan-21
Jan-22
Oct-18
Oct-19
Oct-20
Oct-21
Oct-22
Jan-23
Apr-18
Apr-19
Apr-20
Apr-21
Apr-22
8%
6%
4%
2%
0%
-2%
-4%
-6%
-8%
Recovery Post Lockdown
KZN Looting
Covid 19 Hard-Lockdown
KZN Floods
Transnet Strike
-3.4%
1.4%
1.7%
CTRACK
2023 NATIONAL BUDGET
Rail
6.4
Pipeline
4.3
Road
2.4
Air
0.9
Sea
-0.2
Storage
-5.7
-6
-4
-2
Graph 2 Monthly growth in sub-components of the Ctrack Transport and Freight
Index (%)