Transport and logistics sector bounces back despite April setbacks.

Heavy rains and floods that occurred in KwaZulu-Natal in mid-April had a severely negative impact on the South African logistics sector.

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The flooding was particularly devastating in the Durban-South area and resulted in a major disruption to the Port of Durban, the fourth largest in the Southern African Development Community (SADC) region.

The overall Ctrack Transport and Freight Index for April 2022 declined by 0.4% compared to March but was still up by 8.6% compared to a year ago, although this represents a setback compared to March's strong 12.4% year-on-year increase.

Three of the six sectors that the Ctrack Transport and Freight Index measures declined during April, with the biggest contractions evident in Sea Freight and Rail, both of which were particularly hard hit by the floods in the Durban area.

Not only the port but also surrounding roads were affected and resulted in activities grinding to a halt for a few days. The port is the primary multipurpose gateway to the main economic hub of Gauteng – with a key focus on containers, automotive and liquid bulk transport, and is critical for the stability of the South African economy.

"The devastation caused by the floods in KZN was tragic to behold. However, it is truly impressive how the industry has recovered and shows the transport industry's commitment to the South African economic recovery, despite all the ongoing disruptions from a variety of external factors," says Hein Jordt, Chief Executive Officer of Ctrack Africa.

Road Freight remains the star performer among the various sub-sectors of the logistics industry, and during April, this was once again the case.

Road Freight has certainly picked up where Rail Freight has fallen short in recent years. As such, the Road Freight segment of the Ctrack Transport and Freight Index returned growth of 19.8% compared to a year ago, which is the strongest growth outside of the recovery in 2021 from the COVID-19 hard lockdown levels. The changing landscape relating to online shopping and the fast-growing courier and home delivery sector remain an extensive contributor to the growth in the Road Freight sector.

Ctrack Transport & Freight Index and GDP growth.

It is a well-known fact that in most countries, the transport sector's performance and a country's Gross Domestic Product have a close relationship. Similarly, in South Africa, the Ctrack Transport and Freight Index follows a similar trend to that of the South African GDP.

While this year's Q1 real GDP growth was stronger than expected, with growth of 1.9% compared to Q4 2021's revised growth rate of 1.4%, the latest figures measured by the Ctrack Transport and Freight Index indicate that the economy lost some momentum in Q2. This could be owing to various factors, including the flooding in KZN, Stage 4 load shedding during April and May, inflation and higher interest rates. This trend, identified by the Ctrack Transport and Freight Index, was mirrored by a notable drop in the ABSA PMI and passenger vehicle sales in April.

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