Newest Ctrack Transport And Freight Index Shows Welcome Increase

30 September 2020 – The newest Ctrack Transport and Freight Index has shown an 8% increase between the quarter to August and the quarter to May ­– the first time in 13 months that the index has been back into the black.

“It is almost a certainty that the broader transport sector will contribute positively to gross domestic product (GDP) growth in the third quarter [of 2020],” notes the index report.

“The announcement by President Cyril Ramaphosa that South Africa is moving to Level 1 has meant a continued increase in business activities,” says Ctrack MD Hein Jordt.

“South Africa is ready to get back to work.”

The Ctrack Transport and Freight Index tracks freight movement in the rail, road, pipeline, sea, air and storage and handling sectors.

All in all, the freight transport sector is making a comeback following the outbreak of Covid-19, with three of the six sectors in the index returning to normal.

The air freight, pipelines and storage and warehousing sectors are still, however, feeling the impact of Covid-19.

Air freight will take longer to recover as it relies on passenger flights to get going on a large scale again, states the index report. 

“Given the slow recovery in passenger air travel, one should not expect a return to normal for at least another three quarters.”

Secondly, the work-from-home movement and the practice of social distancing will keep fuel consumption lower than before.

Lastly, it is expected that the warehousing sector will only boom at a later stage, thanks to an increased move towards online shopping. 

“However, this will take a few quarters to reach full capacity as inventories will still take a while to recover,” says the index report.

The good news is that the road freight sector is “recovering nicely”, with a big driver here the parcel and courier sector. 

Coal will also grow while Eskom is struggling with transport via other transport modes.

General freight and containers are expected to almost return to normal in the next few months, although not the old normal, says the report.

“Rail and sea freight on the bulk side have practically fully recovered, but there will be a month or three of slower sea freight deliveries as port congestion all over the world is still a factor due to Covid-19 disruptions.

“Container volumes have also grown, but will not reach normal until the South Africa consumer has recovered, which may still be a year or two away.”

The index report states that road, rail and sea freight will all soon pass the 90% mark of the old normal, with growth to possibly slow a little thereafter.

“The Ctrack Transport and Freight Index is a good indicator of GDP, and while we are hesitant to make a judgement, we now expect at least a 30% growth in South African GDP for the third quarter, seasonally adjusted and annualised, which means a 51% decline becoming a 30%-plus increase.” Source (Engineering News)