Recovery in logistics continues but at a slower pace
The Ctrack Transport and Freight Index that measure transport activity in southern Africa, increased in May to reach an index level of 125.6, an increase of 1.7% compared to April’s level, and 2.5% above a year ago.
This marks the third consecutive monthly increase and an early signal that the transport sector’s contribution to overall economic activity could again have moved into positive territory in the second quarter. The sub-sectors of the index traditionally portray vastly different trends, reflecting the intertwined nature of the logistics sector and it was no different in May. On a monthly basis, three subsectors increased in May 2024, led by air freight (+5.5% m/m) and the heavy weighted road freight subsector (+2.7% m/m).
The Air Freight has been a star performer among the sub-sectors since the start of 2024 showing a notable increase of 15.4% in air freight activity. In May, air freight grew by 5.5%, the fourth consecutive monthly increase, reaching the highest index level on record, while on a quarterly basis, the sector is up by a notable 18%, contributing handsomely to the overall logistical sector recovery. Furthermore, the International Air Transport Association (IATA) reported strong industry-wide air cargo demand, with double-digit annual growth in cargo tonne-kilometres (CTK) for the fifth consecutive month. International CTKs expanded by 11.4% YoY globally, supported by all regions and major trade lanes, with carriers from the Middle East, Africa, and Asia at the helm.
The heavily weighted Road Freight sub-sector, which has grown notably in recent years and currently accounts for 83.6% of all freight payload, recovered further in May, the third consecutive positive monthly growth rate following a downward trend that lasted almost a year. Road freight increased by 2.7% on a monthly basis in May vs 4.5% in April and are up a notable 8.6% on a quarterly basis.
The Ctrack TFI signals that the transport sector could likely be a positive contributor to Q2 2024 GDP. With two months of data on the Ctrack TFI now in, a quarterly increase in the index is on track.
