November 2022 | BUSINESS FLEET AFRICA
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Table 1 Change in Ctrack Transport and freight Index in September and August 2022
September 2022 Tables
Percentage change between
Rail
Road
Pipeline
Sea
Air
Storage and
handling
Ctrack Freight
Transport Index
September 2022 vs September 2021 (y/y)
–10.6%
27.9%
4.3%
3.7%
12.2%
–7.2%
12.8%
September 2022 vs August 2022 (m/m)
–0.6%
0.1%
–11.9%
–0.9%
–0.7%
2.2%
–0.1%
Quarter to September 2022 vs. Quarter to June 2022 (q/q)
–2.9%
6.0%
–4.8%
8.9%
–9.2%
9.1%
4.2%
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.
Index increased by 3.7% in September
on a year on year basis, driven by a
strong recovery in container handling
at various ports in recent months, while
other cargo handling also increased
notably during September.
The Rail Freight component of the
Ctrack Transport and Freight Index
declined by 10.6% year on year in
September, the sixth consecutive
monthly decline, which can be attributed
to amongst other factors, large-scale
theft of copper cables, insufficient
maintenance, lack of locomotives and
corruption. These on going challenges
are likely to remain a reality in this space
for some time to come.
“It is great to see that government is
taking real steps to assist the transport
and logistics industry and save the ailing
rail network,” says Jordt.
Finance Minister Enoch Godongwana
admitted during his speech as part of the
Medium Term Budget Policy Statement
(MTBPS) that there is a crisis in the
logistics sector and that inefficiencies
in the port and rail infrastructure are
costing the economy billions.
This commitment includes the
passing of the Economic Regulation
of Transport Bill while requests for
proposals have been issued for third
party-access to the freight rail network
and private-sector partnerships for the
Durban Pier 2 and Ngqura container
terminals. In addition Transnet has been
allocated R2.9 billion to bring out-of-
service locomotives back into service
and improve rail capacity. A further
R2.9 billion has been allocated to deal
with flood damage in Kwazulu-Natal.
Zooming into the Storage and
Handling sub-sector of the Ctrack
Transport and Freight Index revealed
another dismal performance, this sector
has clearly been underperforming since
the beginning of 2022. The lacklustre
economic environment, as well as global
supply chain pressures, has played an
important role in companies’ manage-
ment of inventories.
Locally, inventory holdings in the
manufacturing sector as measured by
a sub-component of the ABSA PMI,
dropped by 12.8% between January and
June, before recovering quite notably in
Q3. Similarly, the value of raw materials
and work-in-progress of all industries
covered by StatsSA’s Quarterly Financial
Statistics declined in the first quarter
before gradually increasing in Q2 and
Q3. Although the Storage and Handling
segment still declined by 7.2% on an
annual basis during September, it seems
that the sector is making a turn for the
better as reflected in two consecutive
positive monthly growth rates as well
as a sizeable 9.1% quarter on quarter
growth which it recorded in Q3.
The Equites Property Fund, a JSE
company solely focusing a logistics-only
play, recently noted that they are experi-
encing record demand for warehousing
space. The pandemic-related surge in
online shopping has ignited demand for
warehouse and distribution facilities
for retailers and e-commerce players to
store goods before delivery and has also
had a positive impact on Road Freight,
particularly when it comes to parcel
delivery. According to the StatsSA land
transport survey, income generated
from parcel delivery has increased by
79.1% since January 2020.
“The on going pressures facing all
the segments measured by the Ctrack
Transport and Freight Index mean that
the businesses in these segments are
facing rising risk levels and shrinking
profit margins. The implementation of
a bespoke fleet management system
has been well proven to mitigate risk,
increase profitability and ensure peace
of mind in a turbulent environment,”
concludes Jordt.
Ctrack TFI and GDP growth
The September 2022 Ctrack TFI (120.1)
increased notably compared to the June
index level (115.3), signalling a further
recovery in the transport sector in Q3.
However, September and the third
quarter in general has been a particularly
challenging month for the South African
economy thanks mostly due to the afore-
mentioned on going harsh load shedding.
High-frequency data from some of the
most energy-intensive sectors like mining
and manufacturing have already provided
clues about the effects of the power cuts
on economic activity and it does not paint
a pretty picture. There is a growing proba-
bility that the economy as a whole has
slipped back into a technical recession,
with the likelihood of a negative quarter
on quarter growth rate during the third
quarter. Encouragingly, the transport sec-
tor outperformed the broader economy
during the second quarter, increasing by
2.4% compared to the previous quarter
seasonally adjusted vs. a 0.7% contraction
in overall real GDP growth and this trend
is likely to have prevailed in the third
quarter. The transport sector was, how-
ever, hit hard by the recent prolonged
strike of Transnet staff in October, which
will firmly put the sector on the back foot
in the fourth quarter. BFA
* Revision note – the release of
StatsSA’s Quarterly Financial Statistics
survey after the publication of the
August Ctrack TFI, resulted in an upward
revision to the inventory data used to
calculate the Storage and Handling
sub-component and thus resulted in an
upward revision to the August Ctrack TFI.