CAPE TOWN - The Ctrack Freight & Transport Index reached its highest growth ever in the third quarter, indicating that the imminent gross domestic product figure (GDP) for the quarter may well show the strongest growth per quarter in our lifetime, Ctrack managing director Hein Jordt said yesterday.
In June 2020, the Ctrack Freight Transport Index showed that the logistics sector by 17.4 percent compared to the previous quarter, while the growth over the second quarter had improved with 11.8 percent.
Freight transport tracks the economy in the near real time and has a close relationship with GDP.
“The Ctrack Freight Transport Index has been recording these trends for a considerable time and we have never seen such growth and recovery. This is of course why we now expect the strongest GDP on record for South Africa and many other countries too,” said Jordt.
According to the index, only two sub-sectors recorded a decline. Those were Pipelines, which is the smallest sub-sector and Storage, which was historically difficult to predict.
He said the while the recovery might seem remarkable, it was off the low GDB base of the previous quarter.
However, this did not take away from the strength of the bounce and it also indicated that everything was not back to normal, or pre-economic slowdown levels of activity in logistics that were experienced in mid-02019, yet, he said.
The effects of the second wave of COVID-19 were yet to be seen - at the moment it seemed to have hit Europe the hardest.
China had recovered and was growing strongly while indications were that the recession in the US was not as bad as feared.
“We do expect some negative effects, but believe that they will not be as devastating as those of the first wave,” said Jordt.
The Ctrack Freight Transport Index covers six sub-sectors in the logistics arena. They all behave differently during a world-wide crisis such as the current Covid-19 pandemic.
Airfreight had the strongest quarterly recovery, mainly due to the fact that it was the hardest hit during the Covid-19 lockdown period.
The 22.5 percent quarter on quarter improvement quarter was significant but still left air freight transport down 33.9 percent compared to the same quarter last year.
No other sector was as severely impacted during lockdown and Iata, the international commercial aviation body, only expected the sector to recover to where it was in 2019 by 2022 or 2023.
Sea freight grew 13.2 percent quarter on quarter, but is still 6.1 percent behind the same quarter in 2019.
There were, however, some disruptions in sea freight expected with Northern Europe going into another lockdown which was causing delays in the supply chain.
Rail and Road recorded similar increases of 16 percent and 16.8 percent compared to the previous quarter. While both major forms of land transport report disruptions, such as border delays and illegal strike action, they were both only 7 percent behind the same quarter last year. A complete recovery was only expected in a years’ time.
The recovery in the road transport sector might be due to the move towards courier type transport, however, long-distance freight transport was at a similar level in September as it was in September 2019. September 2019 also featured plenty of strike action and was also a weak economic quarter for the overall South African economy.
The Storage and Warehouse sector indicated a drawdown on inventories in the quarter due to cost cutting and supply disruptions and the decline of 7.7 percent in this sector indicated a level of uncertainty in the economy.
Pipelines reported the biggest decline at 38.7 percent quarter on quarter due to the storing of massive amounts of fuel during the second quarter.
BUSINESS REPORT