A booming e-commerce sector and development across outlying parts of the country have significantly contributed to South Africa’s booming freight and logistics industry, which is expected to contribute more than R400 billion to the economy in 2023, according to experts and survey reports.
The growth in the sector is not only evident in the number of truck deliveries but also in the increase in warehousing investments to accommodate the demand, City Logistics CEO Ryan Gaines explained.
“This growth is evident not only in the frequency of truck deliveries but also in the warehousing investments required to accommodate the demand. The retail sector in particular is seeing volume growth of 6% year-on-year,” Gaines said.
The boom has prompted City Logistics to expand its operation, as new warehouse facilities in Bloemfontein, Harrismith, Klerksdorp, Polokwane, and Mbombela have been acquired.
The country’s freight and logistics market size is estimated at $21.53 billion in 2023 (around R402 billion) and is expected to reach $30.56 billion by 2029 (R590 billion), according to Mordor Intelligence.
In 2022, the transport and storage sector contributed 7.5% to the GDP.
“The demand for quality warehousing in Africa skyrocketed due to the rapid proliferation and growth of e-commerce platforms across the continent. This increase in online retail sales is expected to continue, with e-commerce revenue nearly doubling to reach $46 million by 2025,” the report said.
With American online retail giant Amazon about to launch in 2024 and South African retailers expanding their online footprint, the sector can also expect more positive growth.
Amazon confirmed that independent sellers can register on the South African version of the platform starting October 17.
“We look forward to launching Amazon.co.za in South Africa, providing local sellers, brand owners, and entrepreneurs — small and large — the opportunity to grow their businesses with Amazon and delivering great value and a convenient shopping experience for customers across South Africa,” Robert Koen, Amazon general manager for Sub-Saharan Africa, said on the company website.
The Mordor report also noted that the key driver behind the increase in warehouse demand was the e-commerce sector.
“South Africa was the 41st largest market for e-commerce, with a revenue of $8.46 billion (around R158 billion) in 2022,” it said.
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