THE month of February saw the Ctrack Transport and Freight Index record strong growth of 7,1% compared to the corresponding period last year. Despite this year on year growth, there are several indications that this growth will slow down in the short term.
Growth has continued despite the return of COVID-19 and lockdowns in certain locations such as China, as well as continued supply chain disruptions, and then, of course, the ongoing conflict in Ukraine. Fortunately, the global supply chain has mostly untangled itself since November 2021, and this has assisted local growth across the sectors in the last two months.
The Storage sector has reported massive declines, which could be attributed to supply chain not being able to replenish items like microchips, motor vehicles, and other complex products from across the globe. The increase and expected additional increases in short-term interest rates, which in turn makes storage and high inventory levels costly have also influenced the rapid decline.
Apart from Air Transport international transportation has declined compared to a year ago due to the same major issues. In addition, the inability of Rail Transport to deliver bulk commodities to export markets has resulted in a loss of at least R40 billion for the country over the last eight months.
Even though four of the six subsectors declined, the overall Ctrack Transport and Freight Index returned significant increases. This can be attributed to Road Freight, the biggest sub-sector and contributing approximately half of the Index, returning excellent growth.
Due to the ongoing collapse of certain rail corridors due to theft, Road Freight has gained market share, but that alone cannot be held responsible for the increase of over 16% in Road Freight.
To be exact, Road Freight increased by 16,8%, with long-distance transport increasing by between 10% and 14% depending on the specific route. However, the strength of the road logistics index seems to be in the growth of local transport operations as opposed to international operations.
Interestingly, statistics indicate that the biggest growth has been in local road transport, which may include transport by trucks, but also by bakkies, vans and even motorcycles.
According to StatsSA, the fastest growing sub-sector has been land transport of electric goods and transport equipment, followed by textiles and clothing. Both these relatively small categories increased by over 25% compared to a year ago.
The other freight category, as StatsSA labels it, includes a mix of goods, and grew by 22,7%, while container transport grew by 20,4% and parcels by 7% compared to the same period last year.
Local transport, which includes transport directly to consumers or between local businesses, grew by more than 20%. This was a major factor in the overall Road Freight growth of 16%. Taking into account both the growth in value via StatsSA as well as the number of vehicles crossing certain landmarks on the road network, one can identify a number of trends.
Everyday shopping is being transformed and consequently so is the transport sector. Smaller vehicles and warehousing located in closer proximity to the major delivery areas will be integral to this revolution. We could also see a transformation of the restaurant industry with them no longer offering a walk-in option or in-store dining facilities. The reality is that this sector continues to grow rapidly and probably grew by between 20 and 22% over the last year.
Air Freight has increased by 8,1% during the last year, and much of this growth can also be attributed to the demand from consumers for deliveries. This includes goods ordered from international retailers as well as local cell phone deliveries, with cell phones currently South Africa’s biggest consumer import item.
The latest revolutionary transport trend focuses on more consumer-orientated products, but Rail Freight continues to play a major role in the agriculture, container and non-metallic product sectors.
