BUSINESS FLEET AFRICA | December 2022
WWW.BUSINESSFLEETAFRICA.CO.ZA
TRANSPORT AND FREIGHT INDEX
The South African logistics sector de-
clined abruptly during October, as Trans-
net workers embarked on prolonged
strike action to demand higher wage
increases. With all the commercial ports
affected, extensive economic damage
was caused to a variety of the segments
measured by the Ctrack Transport and
Freight Index, including Road Freight
and Storage & Handling, both of which
declined notably in October. On the
contrary, Air Freight seems to have
been a beneficiary of the negative
performance of Sea Freight and others.
The overall Ctrack Transport and Freight
Index declined by 1.8% compared to
the previous month, a decline similar to
what was experienced amidst the July
2021 looting episode.
It is clear that the logistics sector has
been experiencing increased volatility
following the COVID-19 pandemic two
years ago, with multiple challenges to
overcome. Apart from the major events,
including looting, flooding and strike
action, regular load shedding, rising
interest rates, increased costs of tyres
and spare parts, general delays at ports,
frequent sabotage and unrest, as well
as railway woes have all contributed neg-
atively to the industry and the economy
at large. On an annual basis, the Ctrack
Transport and Freight Index has still
grown by 10.0% but moderated from
September’s 12.7% and August’s 13.7%.
“It is unfortunate that the South
African logistics sector simply can not
catch a break with one disruption after
the other affecting its growth. This also
means that it is very difficult to paint a
clear picture of the performance poten-
tial of the industry, which makes it very
difficult for operators to forecast and
plan accurately,” says Hein Jordt, Chief
Executive Officer of Ctrack Africa.
According to Business Unity South
Africa (BUSA), the 12-day Transnet strike’s
cumulative impact has resulted in logistics
costs totalling R7 billion, as goods worth
R65.3 billion stood idle, with a significant
portion of the losses likely never to be
fully recovered. As operations have
gradually returned to some semblance
of normality towards the end-October,
BUSA noted that the industry is only set
to recover fully by early in 2023, barring
any further disasters. Considering the
damage to the logistics industry and to
the economy at large against the esti-
mated cost of the agreed wage increase
of R1.5 billion, such an event needs to be
avoided at all costs in future.
Despite the difficult month, three
of the six components of the Ctrack
Transport and Freight Index increased
on an annual basis during October
(see Graph 2). The Ctrack Transport
and Freight Index is calculated on a
three-month moving average basis
which saw the detrimental impact of
the Transnet strike somewhat absorbed.
However, the negative impact on the
Sea Freight, Road Freight and Storage &
Handling segments between September
and October cannot be ignored.
A closer look at some of the seg-
ments measured by the Ctrack Transport
and Freight Index reveals the real effects
of the Transnet strike, which lasted
almost half the duration of October.
Sea Freight increased by 0.3% in
October compared to a year ago but
declined by 5.4% on a monthly basis, re-
flecting the negative impact of the strike
on ports’ activities. Overall, container
handling in the country declined signifi-
cantly by 58.7% in October compared
The South African logistics sector
buckled in October amid Transnet strike
Jul-18
Jul-19
Jul-20
Jul-21
Jul-2
Jan-18
Jan-19
Jan-20
Jan-21
Jan-22
Oct-18
Oct-19
Oct-20
Oct-21
Oct-2
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
Graph 1: Ctrack Transport and Freight Index % change on a monthly basis
CTRACK AND ECONOMISTS.CO.ZA
Graph 2 Ctrack Transport and Freight Index components (% change on a year ago)
CTRACK & ECONOMISTS.CO.ZA
Road freight
Air frieght
Sea
Storage
Rail
Pipeline
–7.7
–7.2
–2.1
0.3
12.4
20.3
25
–10
–5
10
20
15