Following four consecutive months of
contraction, the South African logistics
sector as measured by the Ctrack
Transport and Freight Index recovered
considerably during January, though
off a low base. The Ctrack Transport
and Freight Index increased by 1.5% in
January following a monthly decline of
3.4% in December (and declines in the
preceding three months). On an annual
basis the Ctrack Transport and Freight
Index ended 2.1% higher than a year
earlier, a far cry from the annual growth
rate of 13.7% recorded in August 2022.
The sector has faced many headwinds
during 2022 and still finds itself in
recovery mode as we enter 2023.
The detrimental impact of the Transnet
strike on the logistics sector in the final
months of 2022 as well as the growing
voice of business decrying the dismal state
of the rail industry have, at last, resulted in
some attention from government. During
the 2023 National Budget presented by
Finance Minister Enoch Godongwana on
22 February 2023 government acknowl-
edged that constraints in logistics had
negatively affected economic growth
and employment. Quoting from the 2023
Budget Review document: “More than a
quarter of long-distance freight traffic has
shifted to roads in the past five years as a
result of severe deterioration in the freight
rail network.
This is due in large part to historical un-
derinvestment in the network. Prolonged
power failures and poor operational per-
formance of transport industries continue
to hamper operations and investment in
manufacturing, mining and agriculture.
Several reforms are under way to improve
the performance of the transport sector,
specifically freight rail and to improve the
capability of the state”.
More important than the acknowl-
edgement, was the invitation to the
private sector to get involved in a potential
solution. Government is currently pursuing
greater competition in transport and
logistics through third-party access to the
freight rail sector which is now in a pilot
phase. In addition, several other reforms
are in place to support recovery in the
transport sector, which were also pointed
out in the budget speech including;
Q The Economic Regulation of
Transport Bill, which will establish the
transport regulator, has been tabled
in Parliament.
Q Transnet is taking steps to improve
operations in key corridors, for
example software upgrades that will
increase efficiency through better
signalling.
Q Additional intervention in the form of
steps to prevent theft and vandalism
The South African logistics sector
recovered somewhat in January 2023
BUSINESS FLEET AFRICA | March 2023
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TRANSPORT AND FREIGHT INDEX
Graph 1 Ctrack Transport and Freight Index % change on monthly basis
CTRACK
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%
-10%
Recovery Post Lockdown
KZN Looting
Covid 19 Hard-Lockdown
KZN Floods
Transnet Strike
-3.4%
1.5%