The Ctrack Transport & Freight Index for June shows that South
Africa’s transport and freight volumes increased 20.6% compared to May across
all sectors. The Ctrack headline change however declined with 23,2% for the
rolling three month average to June compared to June 2019.
Total freight volumes in June also indicate double-digit growth for the
second consecutive month, having recorded a 15,2% increase in May compared to
April. However, the depth of the April
decline was such that the quarter still reflects a decline.
The data shows that the industry is on the way back, with the bounce
back of the whole supply chain. The speed of the bounce is surprising at
present and may not stay at double digits.
“Every cloud has a silver lining,” says Ctrack SA CEO, Hein Jordt.
“While we remain cautiously optimistic, the recovery does seem real, even
though the industry still faces significant supply chain challenges.
“But clearly, the worst is now behind the transport and logistics
industries.”
Our data shows that warehouses are getting fuller and that the country’s
biggest ports have got going again.
That said, overall transport and logistics volumes are about 13% below
the country’s January 2018 high point, and are unlikely to be reached again
before 2022.
The air freight sector is unlikely to fully recover unless tourism picks
up dramatically. The same can be said of the pipeline sector.
Unfortunately, the average South African consumer is unlikely to display
pre-pandemic levels of buying confidence for at least another year.
Car, furniture, and property sales will not return to 2019 levels until
2021 or even 2022.
Travel restrictions and shortened holidays will hurt the local travel
industry, new car sales, clothing and, to a lesser extent, entertainment-type
products.
The bad news in the pipeline sector is likely to also continue.
Large reductions in traffic volumes have been recorded in all the big
cities of South Africa, and long distance travel on the country’s major routes
is also radically lower.
Fuel sales will remain well below normal. With massive fuel stocks in
some parts of the country, we believe that pipeline volumes will disappoint for
some time still.
Furthermore, China has indicated that it has a massive steel stockpile.
Iron ore shipments to that country will also be low for the next few quarters,
which will impact South Africa’s sea and rail transportation sectors.
Road transport volumes are back at similar levels to March 2020.
The sector shows very promising signs of recovery. Some of this may be
due to courier services which are growing due to a change in shopping habits.
However, one should expect a few hiccups along the way, with full
recovery still more than a year away.
The storage and warehousing sector are perhaps overstocked at present
due to lower retail and wholesale demand.
Conversely, shortages of high-end consumer items such as cell phones
have been recorded, due to air freight volumes being well below normal.
The warehousing sector should be watched closely as it provides clues to
the prospects of other transport sectors in the short-term.
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