Logistics index grows 3.3% in March, yoy
The logistics sector in South Africa, and by extension, in Namibia, continued it recoverty during March, reaching its highest level since September last year.
During March, the Ctrack Transport and Freight Index increased by a notable 3.3%, the third consecutive monthly increase and the highest monthly increase since April 2021, reflective of a synchronised recovery. In addition, five of the six sub-sectors measured by the Ctrack Transport and Freight Index increased on a monthly basis.
On an annual basis, the Ctrack Transport and Freight Index is tracking 3.3% higher than a year earlier. While this is still only a blip on the graph compared to the annual growth rate of 13.6% recorded as recently as in August 2022, all indications are that the sector is on a firm positive trajectory.
One of the characteristics of the logistics sector is the varying discrepancies in the performances of the different sub-sectors. While this has proved to be a major positive in the sector’s resilience, a more synchronised recovery, as was observed in March, is indeed very encouraging.
In March, four of the six sub-sectors still declined on an annual basis, whereas five of the six increased on a monthly basis, indicative of positive near-term momentum. March’s improvement also confirmed a strong quarterly performance of the Ctrack Transport and Freight Index, which increased by a notable 6.6% quarter on quarter.
Interesting trends are emerging.
Road Freight remains the most resilient of all sub-sectors, recording growth of 15.9% year on year at the end of March 2023. Air Freight has remained stagnant compared to a year earlier.
“Strong recoveries have been recorded in the first quarter of 2023 in Rail Freight, Pipeline Transport, Sea Freight and Road Freight, showcasing that the logistics sector is firmly in recovery mode, following a dismal end to 2022,” said Hein Jordt, Chief Executive of Ctrack Africa.
After reaching an all-time low in January 2023, Rail Freight continued to recover in March, though off an extremely low base. While still deep in negative territory on an annual basis, the Rail Freight component of the Ctrack Transport and Freight Index increased by 11.3% in March, which follows February’s 6.8% growth. Strong growth of 15.5% was recorded during the first quarter, however on an annual basis, the Rail Freight component has declined by 13.2% year on year ending in March.
During March 2023, the Road Freight component of the Ctrack Transport and Freight Index increased by 15.9% year-on-year, representing the 24th straight month of double-digit annual growth rates. Taking a closer look reveals some interesting trends. The number of heavy trucks on the N4 toll routes continues to increase notably on an annual basis, a trend that has been firmly entrenched since August 2021, while the number of heavy trucks on the N3 toll route declined on an annual basis, though showing some growth in March 2023 compared to the previous month.
“The ongoing challenges of harsh load shedding, high living costs, inflated production costs, rising wage demands and elevated interest rates mean that many sectors of the economy are either contracting or only showing marginal growth” concluded Jordt.
