Ctrack

August 2023 Transport and Freight Index

Jacques Swanepoel — Fri, 06 Oct 2023 06:22:20 +0000

Broad-based strain evident in the logistics sector.

Download Index -August 2023

The Ctrack Transport and Freight Index retreated further during August 2023 to an index level of 118.8, the lowest since February (116.7). This represents a decrease of 1.5% during the month of August, the third consecutive monthly contraction and confirmation of the ongoing strain in the logistics sector. This retraction is evident across the industry, with four of the six sub-sectors measured by the Ctrack Transport and Freight Index declining on both a monthly and a quarterly basis.

Overall, the Ctrack Transport and Freight Index also dipped into negative territory on an annual basis for the first time since February 2021, and it is clear that many challenges remain for the sector.

“While government has started to come to terms with the negative impact that the underperformance of the sector has on the broader economy, implementation of reforms is too slow and urgency is required in order to reverse this negative trend,” says Hein Jordt, Chief Executive Officer of Ctrack Africa.

Fragmented growth has characterised the Ctrack Transport and Freight Index sub-sectors over the past few months, and with five of the six sub-sectors now tracking lower than a year earlier, the hope of a notable recovery has faded. Only two of the six sub-sectors of the Ctrack Transport and Freight Index increased on a quarterly basis during August 2023, with Road, Rail and Air Freight the laggards. On an annual basis, only the Road Freight sub-sector recorded positive growth, albeit at a muted pace. Road Freight has always been the most resilient of the sub-sectors, but annual growth has subsided notably to only 1.7% year-on-year during August 2023, a far cry from annual growth of 28.2% experienced in August 2022 and the lowest since December 2020.

The Road Freight sector, the biggest of the sub-sectors, has experienced multiple challenges in the past few months and is still playing catch-up, as reflected by a notable contraction on a quarterly basis. A closer look at August’s figures suggests that a tentative recovery is underway, with road freight payload in the country rising by 1.6% and heavy vehicle traffic on the N3 increasing by 5.5% on a monthly basis. The road freight industry continues to benefit from the ongoing rail freight woes, as reflected in data published in StatsSA’s latest monthly Land Transport Survey.

This sector remains a critically important contributor to the South African economy as trucks transport 80% of goods in the country. However, the over-dependence on Road Freight, which has become more pronounced in the past few years, costs the South African economy dearly as road freight transport is more expensive than rail and also raises the cost of road maintenance. The recent surge of the international oil price, in combination with renewed rand exchange rate depreciation, has resulted in notable diesel price increases, which will no doubt push headline consumer inflation back into a range of between 5,5% and 5,9% for the next few months (latest print for Aug 23: 4,8%). With a forecasted diesel price increase of around R1.50/litre in early October, the cumulative increases over the last three months (August to -October) could total just more than R5/litre. The direct and indirect impact of these increases is sure to have a negative impact on the fragile state of the South African economy.

The Sea Freight component, one of the sub-sectors hardest hit by the Transnet strike in October 2022, is still in a gradual recovery mode and increased by 3,1% on a monthly basis but remained in negative territory compared to levels of a year ago (-2,0% year on year). Comparing the number of containers handled during August 2023 to the pre-strike level of September 2022 revealed that the total is still 11,1% lower. Container handling, however, increased by 1.9% during August, whereas other cargo handling declined by 0.6% on a monthly basis.

The ongoing underperformance of South African ports has been highlighted again in recent media reports. The Freight Forwarders Association, in a weekly report on the cargo industry, bemoaned the “desperately low” handling of containers by Transnet’s ports and detailed a variety of problems currently bedevilling them. Some of the problems the report identified included dismal straddle carrier availability in Durban, only one helicopter being operational and persistent cable theft on rail lines, leading to them being closed for hours.

“While the recent announcement by Transnet National Port Authority of the privatisation of the Pier 2 container terminal at Durban has created strong positive sentiment in an industry crying out for better port performance, it will take some time before a turnaround could be expected. The Pier 2 terminal handles 72% of the Port of Durban’s throughput and 46% of South Africa’s port traffic, thus, a notable improvement could be a game changer for the industry and the economy at large, however, sometime in future only,” says Jordt.

The Rail Freight sub-sector also subsided further in August, remaining deeply in negative territory on an annual basis and declining by a further 7.0% year on year during August 2023, which represents the 17th consecutive monthly decline. The urgency of freight reform has been reinforced in the Operation Vulindlela update recently, while stakeholders are raising their voices on an ongoing basis to reinforce the urgency of reforms needed.

Air Freight has been under pressure for most of 2023 and declined by a further 1.7% on a monthly basis during August, while the sector remains just below its position of a year ago. According to the International Air Transport Association (IATA), lower demand for air cargo reflects multiple headwinds still facing the global economy, particularly China’s weak performance in production and exports. While air cargo tonne-kilometres (CTKs) to Africa increased by 2.8% and consolidated airport flight movements also increased, the number of unscheduled flights that are typically chartered for cargo purposes, as well as cargo load on planes, both declined during August.

The transport of liquid fuels via Transnet Pipelines (TPL) increased by 2.3% compared to July, with the Pipeline component of the Ctrack Transport and Freight Index tracking moderately higher on a quarterly basis (+3,1%) but remaining deep into negative territory on an annual basis, with declines of 15,4% recorded (partly reflecting a high base of calculation).

After being the star performer in June, the Storage and Handling sub-sector of the Ctrack Transport and Freight Index declined during July and further in August, by 2.4% on a monthly basis, while moving 3.9% below year-ago levels. Inventory levels have recently moved to lower levels within the economy, which has had a spill-over effect on storage and warehousing activity.

Ctrack TFI and GDP growth

Although the Ctrack Transport and Freight Index increased at a muted rate, the extent of the transport sector’s underperformance during the second quarter came as a surprise. As part of the Q2 GDP release, StatsSA reported that “Transport was down on the back of decreased land transport and transport support services”. The transport and communication sector declined by 1.9% during the second quarter (vs 1.1% in Q1) vs. total economic growth of 0.6% (q/q, seasonally adjusted). While the economic narrative remains generally static, with ongoing load-shedding, elevated interest rates, a lacklustre job market and low confidence levels, it is evident that sector-specific challenges have also played a role in the transport sector’s underperformance during the second quarter.

A snapshot of the correlation between the transport equipment sub-sector of real gross fixed capital formation (GFCF) and the Ctrack TFI is depicted in Graph 4. A fairly accurate positive correlation is evident up to Q3 2022 when the impact of the Transnet strike pushed the Ctrack Transport and Freight Index notably lower and disrupted the correlation. Worth noting is two consecutive quarters of negative quarterly growth in transport equipment investment (Q1 and Q2 2023), potentially reflecting the strain on the economy at large and the logistics sector per se, as reflected by the Ctrack Transport and Freight Index.

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July 2023 Transport and Freight Index

Jacques Swanepoel — Thu, 31 Aug 2023 14:17:21 +0000

Despite recent contractions the transport sector is expected to be amongst the top performers in the broader economy

Download Index – July 2023

The Ctrack Transport and Freight Index (Ctrack TFI) retreated further in July 2023 to an index level of 120.8, the lowest since March (120.5). This represents a decrease of 1,2% during the month of July. This second consecutive monthly contraction confirms the loss of momentum in the logistics sector. In addition, four of the six sub-sectors measured by the Ctrack Transport and Freight Index declined on a monthly basis, including Rail, Road, Storage and Air Freight. Pipeline transport recorded marginal growth, while Sea Freight was the only sub-sector to show strong growth. Despite these monthly contractions, on an annual basis, the Ctrack Transport and Freight Index is still tracking 3,3% higher in July, compared to 6,4% in June on a year-on-year basis, but many challenges remain.

The South African transport and freight sector has been in sharp focus during the past few months as government has started to come to terms with the negative impact the underperformance of the sector has on the broader economy. In a recent update of Operation Vulindlela published on 27 August 2023, government indicated that a new ‘Freight Logistics Roadmap’ is currently undergoing an internal government consultative process for publication before the end of the year.

“The roadmap will incorporate proposals to resolve the immediate operational challenges while developing interventions to fundamentally restructure the logistics sector to support inclusive economic growth,” the update states.

In October 2020, President Cyril Ramaphosa announced the establishment of Operation Vulindlela as a joint initiative of The Presidency and National Treasury to accelerate the implementation of reforms to revive economic growth and create jobs.

Implementation of the roadmap will be overseen by the National Logistics Crisis Committee (NLCC), established by President Cyril Ramaphosa earlier this year to address problems afflicting the sector, including a steep deterioration in rail services and ongoing port inefficiencies, trends which were reflected in the subsectors of the Ctrack Transport and Freight Index for some months now. A joint strategic operations committee is also being established between the NLCC and the private sector, with organised business having identified the logistics crisis as one of three areas in which it will provide direct support to government. Similar joint action is also underway in the areas of electricity as well as crime and corruption. It is indeed a welcome development that could lift the economy out of ‘muddle-along’ mode and ignite an economic recovery phase.

“It is great that government is finally moving forward with Operation Vulindlela. I do hope that it ignites the recovery the broader transport industry and the South African economy so desperately needs,” says Hein Jordt, Chief Executive Officer of Ctrack Africa.

Fragmented growth has characterised the Ctrack Transport and Freight Index sub-sectors over the past few months, derailing any hope of a synchronised recovery. Only three of the six sub-sectors of the Ctrack Transport and Freight Index increased on a quarterly basis in July 2023, with Road, Rail and Air Freight the laggards. On an annual basis, four of the six sub-sectors still declined, despite the overall index level increasing by 3,3% compared to a year earlier. Among the sub-sectors, Road transportation (the biggest sub-sector) has always been most resilient. Still, annual growth has subsided notably to only 6,9% year on year during July 2023, a far cry from annual growth of 28,2% experienced in August 2022 and the first single-digit annual growth rate recorded since March 2021.

The Sea Freight component, one of the sub-sectors hardest hit by the Transnet strike in October 2022, continued its gradual recovery during July. While only container handling increased during July (as other cargo handling declined), the Sea Freight subsector increased by 4,6% on a monthly basis but remained in negative territory compared to levels of a year ago (-3,1% year on year). Following the ongoing underperformance of South African ports, the announcement by Transnet National Port Authority of the first privatisation of a South African container terminal has created strong positive sentiment in an industry crying out for better port performance.

International Container Terminal Services (ICTSI) was awarded the 25-year concession last month, and the biggest anticipated impact over the concession period is the expected improvements in terminal productivity. ICTSI will operate the terminal, rolling out best practices learnt from its extensive experience gained from operating 34 terminals globally. The Pier 2 container terminal handles 72% of the Port of Durban’s throughput and 46% of South Africa’s port traffic, thus, a notable improvement could be a game changer for the industry and the economy at large. The underperformance of Sea Freight relative to the total transport and logistics sector, especially over the past two years, has been clearly evident.

The Road Freight sector has experienced multiple headwinds in the past few months, including an IT glitch that caused border crossing delays to renewed unrest and the burning of trucks on the N3 in KwaZulu-Natal, which subsequently spread to Mpumalanga and Limpopo early in July. These events had a visible negative impact on the number of heavy vehicles on the road, especially during the first weeks of July. While heavy vehicle traffic bounced back on the N4 route, growing by double-digits on a monthly basis and reversing the slump in June, truck traffic on the N3 route declined further during July. While the road freight payload for the country as a whole, as published by StatsSA in its monthly Land Transport Survey, remained flat on a monthly basis, the Road Freight sector of the Ctrack Transport and Freight Index declined on both a monthly and quarterly basis during July. This sector remains critically important for the South African economy as trucks carry around 80% of goods in and around the country (source: Road Freight Association).

The Rail Freight sub-sector also subsided further in July, remaining deeply in negative territory on an annual basis and declining by a further 6,2% year on year during July 2023, which represents the 16th consecutive monthly decline. The urgency of freight reform has been reinforced in the Operation Vulindlela update, which describes Transnet’s decline as posing a material risk to the country’s economic prospects, with rail’s underperformance having resulted in losses equivalent to 5,3% of gross domestic product in 2021.

“South Africa continues to lose rail market share, with Transnet Freight Rail volumes falling short of targeted volumes – where our rail system moves less than 40% of rail-friendly freight tonne-kilometres,” said the report.

Air Freight, which was one of 2022’s star performers, has been under pressure during the first half of 2023 and declined by a further 2,9% on a monthly basis during July while the sector remains 4,0% below its position of a year ago. According to the International Air Transport Association (IATA), lower demand for air cargo reflects multiple headwinds still facing the global economy. While air cargo tonne-kilometres (CTKs) to Africa was down by a further 2,8% in July, a few green shoots have appeared. The number of unscheduled flights that are typically chartered for cargo purposes, as well as cargo load on planes, both increased notably during July.

The transport of liquid fuels via Transnet Pipelines (TPL) increased by 0,8% compared to June, with the Pipeline component of the Ctrack Transport and Freight Index tracking moderately higher on a quarterly basis (+2,5%) but remaining deep into negative territory on an annual basis, with declines of 19,2% recorded (partly reflecting a high base of calculation).

After being the star performer in June, the Storage and Handling sub-sector of the Ctrack Transport and Freight Index declined again during July by 3,0%, compared to June, while still tracking 7,8% higher annually. Ongoing issues in the Rail and Road Freight sub-sectors typically have spill-over effects on storage and warehousing activity, and this is the case once again.

“Given the lacklustre performance across the majority of segments during the last two months, we can only hope that the industry gets a break from any disruptions for the remainder of the year in order for it to bounce back somewhat and continue on its long-term growth trajectory,” said Jordt.

Ctrack TFI and GDP growth

The second quarter GDP growth outcome will be released on Tuesday, 5 September, and we expect that the transport sector will once again be among the top sectoral performers and will most likely have outperformed the broader economy. Real economic growth of 0,7% on a quarterly basis, seasonally adjusted, is forecast for the economy (vs. 0,4% in Q1), while the transport sector is forecast to grow by 1,4% (vs. 1,1% in Q1). While growth is forecast to be slightly higher than in the first quarter, the economic narrative remains generally static, with ongoing load-shedding (though some moderation is evident in stages that applied), elevated interest rates, a lacklustre job market and low confidence levels still prevalent and suppressing economic activity. However, indications that some industries have become progressively more resilient to the effects of load-shedding, as companies reduce their energy dependence on the embattled Eskom, remains an underlying positive development.

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June 2023 Transport and Freight Index

Jacques Swanepoel — Mon, 31 Jul 2023 08:04:26 +0000

The South African logistics sector loses momentum in June.

Download Index – June 2023

After reaching its highest index level on record at a revised 122.6 in May, the Ctrack Transport and Freight Index (Ctrack TFI) declined by 0,5% in June 2023 to 122.0. This is the first monthly contraction in six months and signals the loss of momentum in the logistics sector. In addition, three of the six sub-sectors that make up the Ctrack Transport and Freight Index declined on a monthly basis (Rail, Road and Air Freight), two recorded marginal growth (Pipeline transport and Sea Freight), while Storage and Handling were the only sub-sector to show strong growth.

On an annual basis, the Ctrack Transport and Freight Index is tracking 6,5% higher in June, compared to the 7,5% year-on-year level measured in May, but near-term challenges will likely dampen momentum further in coming months.

“The transport sector’s resilience has been incredible, but unfortunately, a variety of additional geopolitical factors has put an end to its recent good performance,” says Hein Jordt, Chief Executive Officer of Ctrack Africa.

Derailing the hope of a continued synchronised recovery is the fact that only four of the six sub-sectors increased on a quarterly basis in June 2023. Rail and Road Freight were the laggards during the second quarter, while the latter’s underperformance might have played a role in the star performance of the storage and handling sub-sector. On an annual basis, four of the six sub-sectors have declined, despite the overall index level increasing by a still healthy 6,5% compared to a year earlier. Among the sub-sectors, Road Freight, which is also the biggest sub-sector, has always been the most resilient, but annual growth has now subsided notably to 12,0% year on year in June 2023, a far cry from annual growth of 28,2% measured during August 2022.

Road Freight has experienced multiple headwinds in the past two months. Early in June, an IT glitch delayed the electronic clearance of vehicles going through the borders, causing widespread congestion and delays for cargo transporters. Although this issue was resolved within days, the congestion took some time to unravel and had a material impact, especially on the number of heavy vehicles that could traverse the N4 route. While heavy vehicle traffic subsided on both the N3 and N4 routes during June, the latter recorded a double-digit monthly decline.

Early in July, the sector was also the victim of a spate of arson attacks targeting trucks on the N3 in KwaZulu-Natal, which subsequently spread to Mpumalanga and Limpopo. The negative impacts thereof will, in all likelihood, be felt in the July Ctrack Transport and Freight Index too.

“While incidents of violence have caused major setbacks during the last two months, it has highlighted the importance of fleet management systems and linked hardware such as camera systems as it was these systems that assisted police in identifying and arresting persons targeting drivers and trucks,” says Jordt.

In addition, the Road Freight payload for the country as a whole, as published by StatsSA in its monthly Land Transport Survey, also declined by 6,2% on a monthly basis. The Ctrack Transport and Freight Index Road Freight sub-sector actually declined on both a monthly and quarterly basis in June. Given its importance, the sector will surely bounce back. According to the Road Freight Association (RFA), trucks carry around 80% of goods in and around the country, but recurring incidents of violence and destruction continue to damage the sector’s reputation. The RFA warns that those who use South Africa as a transit hub into Africa might turn away from us and move to other countries that are safer and more efficient.

The Rail Freight sub-sector also subsided further in June, after having recovered notably in February and March (though of an extremely low base). The sub-sector remains deeply in negative territory on an annual basis, declining by 9.2% year on year in June 2023, the 15th consecutive decline recorded and confirming that rail remains firmly on the back foot. Transnet Freight Rail’s woes have been a major hurdle in South Africa’s road to recovery, costing the mining industry, in particular, tens of billions a year in lost exports, which also impact negatively on the fiscus given reduced tax receipts. The sub-sector is in urgent need of a turnaround strategy.

The Sea Freight component, one of the sub-sectors hardest hit by the Transnet strike in October 2022, is still in an uninspiring recovery phase. While both container handling and other cargo handling increased during June, the Sea Freight subsector increased by a mere 0.4% on a monthly basis and slipped into negative territory again compared to levels of a year ago (-0.5% y/y). Given the ongoing underperformance of South African ports, the fact that Transnet has started to embrace the private sector as a partner for service delivery is indeed welcomed and could be a game changer for ports’ efficiency and performance. In a ground-breaking development, Transnet has selected International Container Terminal Services Inc (ICTSI), a logistics firm based in the Philippines with an extensive international footprint, to upgrade and operate a container terminal in Durban. ICTSI will run the Pier 2 container terminal for the next 25 years, with an option to extend to 30 years.

Pier 2 is the largest container terminal in the Durban port, with a current installed capacity of 2.2 million 20-foot equivalent units (TEUs). But this installed capacity is not being used owing to inefficiencies. Currently, the terminal has an average volume throughput of 1.8 million TEUs a year. Inviting private sector involvement spurs hope that the demise of Transnet could be stemmed, and if the involvement could be broadened to include other ports and the rail network, it could indeed transform the logistics sector for the better.

The Air Freight sub-sector of the Ctrack Transport and Freight Index, which turned out to be one of 2022’s star performers, has been under pressure during the first six months of 2023. Air Freight declined by 2.6% on a monthly basis in June and remained 4.7% below a year earlier. It is clear that strain on the global economy is still filtering through to air cargo activity. According to the International Air Transport Association (IATA), lower demand for air cargo is still evident across the globe. Air cargo tonne-kilometres (CTKs) to Africa was down by 2.4% in June, while cargo load on planes also declined by 1.3%, the third consecutive month of declines. The number of unscheduled flights typically chartered for cargo purposes also declined again in June.
The transport of liquid fuels via Transnet Pipelines (TPL) increased by a marginal 0.1% in June 2023, with the pipeline component of the Ctrack Transport and Freight Index now moderately up on a quarterly basis (+2.9%) but remaining in negative territory on an annual basis, with growth of -11.5% recorded.

The Storage and Handling sub-sector of the Ctrack Transport and Freight Index was the star performer in June, with a notable increase of 7.4% compared to May, while tracking 10.8% higher on an annual basis. A noteworthy increase in transhipments contributed to the healthy growth, while issues in the rail and road freight sub-sectors could have spilled over in higher inventory levels, supporting storage and warehousing activity.

Ctrack TFI and GDP growth

The transport sector was among the top three sectoral performers in Q1 2023, growing by 1.1% compared to the previous quarter seasonally adjusted (vs. 0.4% for the total economy), contributing positively to the overall economic performance of the South African economy. Despite the moderation in June, the Ctrack Transport and Freight Index is still tracking 1.4% higher in June compared to March, indicative of a positive contribution to the second quarter GDP. The economic narrative remains generally dismal, dampened by ongoing load-shedding, elevated interest rates, a lacklustre job market and low confidence levels. However, indications that some industries have become progressively more resilient to the effects of load-shedding, as companies reduce their energy dependence on the embattled Eskom, is an underlying positive development that supports an otherwise dismal story.

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Ctrack channels its ‘Power to Predict’.

digital@lkda.co.za — Fri, 21 Jul 2023 13:13:32 +0000

Ctrack, a leading player in the telematics business, is transforming their business with the slogan ‘The Power to Predict’ at the nucleus of this new strategy as they look to meet their customers’ high demands in a changing and challenging environment.

Ctrack has a long history of market leadership in the telematics, fleet management and technology development that facilitated industry disruptions throughout their 38-year history. Highlights include developing the technology behind the first multi-box tracking unit in 1997, Discovery Insure’s usage-based insurance in 2011 and the launch of Crystal in 2022.

“With the emergence of big data, Ctrack realised that we needed to offer our clients solutions that allow them to utilise this data to their advantage in the most efficient way possible,” says Hein Jordt, Chief Executive Officer of Ctrack Africa.

Ctrack’s brand transformation reflect their commitment to providing cutting edge data and telematics solutions that stretch beyond traditional fleet management capabilities. Ctrack recognises the immense potential that lies within harnessing data to drive actionable intelligence and optimise business operations.

“This is more than a cosmetic change, it signifies Ctrack’s dedication to innovation and commitment to staying at the forefront of technological advancements. The revamped brand reflects our belief in the transformative potential of data insights and predictive power,” adds Jordt.

The power to predict goes hand in hand with the core pillars that have always been the motivating factor for Ctrack’s ongoing research and development efforts as they aim to assist customers in reducing risk and minimising safety hazards, optimising fleet productivity and efficiency, improving asset management and tracking, managing and improving driver behaviour and automating and streamlining compliance. These pillars along with a sense of urgency has allowed Ctrack to develop flourishing long term business relationships.

The power to predict is possible thanks to Ctrack’s well-developed hardware and software solutions that give users the ability to know what is happening with their vehicles, drivers and cargo at any time of the day via a single platform.

That software solution is Crystal, an all-encompassing, cloud-based platform. Crystal is a single platform where AI telematics meets data intelligence and offers all the functionality that consumers have come to know and love in one location. The result is a business tool that offers so much more than simple reporting.
Live data allows fleet managers to keep their finger on the pulse of daily operations, and if there is anything out of the ordinary, they will have the foresight to act before they are forced to react.

Whether you are a small business owner with a single delivery vehicle or are managing a fleet of hundreds of trucks across the continent, you are guaranteed to move better when you have the power to predict

“We are passionate about empowering our clients using cutting-edge technologies to transform quality data into actionable insight and foresight that allows our customers to predict the future with certainty, optimise efficiencies and make informed decisions based on good quality data,” adds Jordt.

Crystal is fully customisable, so there’s no limit to what you can have sight of and keep tabs on. A multitude of data is collected, interpreted and packaged, allowing customers to make informed decisions and continuously refine their operations. With data and insights at their fingertips, Ctrack can predict scenarios and put measures into place to negotiate these situations as safely and efficiently as possible.

“Owners have less time to manage fleets, but Crystal allows them to do so much more and gain a deeper understanding of data, as well as clear predictions with a limited number of clicks,” says Jordt.

Crystal allows for job management, assigning tasks and planning routes in the most efficient manner. Alerts ensure that the right people are informed ahead of time, every time. At any point in the day, fleet managers can rely on a snapshot summary that gives them an instant view of crucial, relevant data in real-time. High-quality data is packaged in the simplest format possible, facilitating the reporting and insights that allow for swift, well-informed decision-making.

Crystal allows for the effortless scheduling of what needs to go where and when it needs to be there and ensures that it happens. The power to predict is beneficial to your clients too. Communication down the supply chain has been optimised with the addition of powerful modules such as ‘Electronic Proof of Delivery’, which ensures that all parties are automatically kept up to date with objective and transparent evidence that operational milestones are achieved, with the foresight to make changes ahead of time, if need be.

Users are now able to add camera and video technology to the Crystal suite, offering a live feed into the inside of the vehicle and of the person operating it, granting unprecedented insight into what is happening at that exact moment. Crystal video gives fleet managers eyes everywhere, accessible from any smart device at any given time, from one platform.

In addition, the Ctrack Bureau service facilitates the use of AI technology that works along with the camera systems to automate the process of identifying transgressions, significantly reducing the leg work required by fleet managers in managing driver behaviour more efficiently, with deeper insights that allow for better decisions in a tough trading environment.

Crystals scalability extends even further with SMART integrations, seamlessly connecting with third-party applications that cater to your specific industry needs. This includes activating bespoke SMILE scripts, monitoring trailers, implementing breathalysers or keeping an eye on temperature in the cold chain. Ctrack’s unique differentiators can be applied to any industry.

The flexibility of ‘Crystal Analytics’ means that users have all the functionality they want or only what they need. Users have the ability to add and customise modules according to their specific needs. Crystal will gather all the information required to equip you with the insights to make better business decisions. Crystal presents this information in a way that is easy to access, simple to understand and practical to apply.

“One single platform allows for the management of fleets as well as a wide variety of insights into how to improve. Crystal can predict what will happen based on previously captured historical data, ensuring optimal use of vehicles and limiting downtime by proactively taking action such as ordering parts or making workshop bookings,” adds Jordt.

The Crystal mobile app, available in both Google and Apple stores, completes the loop as it is designed to provide valuable information about daily operations in the simplest way possible and facilitate the optimal running of fleets and vehicles for both drivers and fleet managers.

“The power to predict’ vision relies on historical and predictive data to digitally transform our business to ensure that we are future-proof. With our wide variety of hardware solutions working in conjunction with Crystal, and our constant investment in research and development, we look forward to offering our customers world-class products for many more years to come,” concludes Jordt.

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May 2023 Transport and Freight Index

digital@lkda.co.za — Mon, 17 Jul 2023 10:47:54 +0000

The South African logistics sector continued its recovery during May.

Download Index – May 2023

The Ctrack Transport and Freight Index (Ctrack TFI) reached its highest level on record with 122.2 points at the end of May 2023 (121.7 in April 2023), improving for the fifth consecutive month. This confirms a fairly synchronised recovery of the overall logistics sector even though the pace of improvement moderated somewhat. The Ctrack Transport and Freight Index increased by 0.4% in May compared to April, which was somewhat muted compared to the average monthly increase of 1.9% in the preceding four months. In addition, four of the six sub-sectors that form part of the index increased on a monthly basis. Road Freight remained stagnant while Rail Freight declined somewhat. On an annual basis the Ctrack Transport and Freight Index tracked 7.5% higher in May, compared to the 5.6% year on year trend that was recorded in April. This is evidence of the encouraging momentum building in the sector, but also partly reflects the recovery that was required in the wake of the KZN floods of May last year.

Graph 1: Ctrack Transport and Freight Index

In a welcome development and confirming the synchronised nature of the current recovery, all six segments of the Ctrack Transport and Freight Index increased on a quarterly basis ending in May 2023. On an annual basis, three of the six segments have declined, despite the overall index level increasing by a healthy 7.5% compared to a year earlier. Among the segments, Road Freight remains the most resilient, with growth of 15.2% for the year ending in May. The three worst performing sectors continue to be Rail Freight, Pipeline Transport and Air Freight.

Graph 2: Quarterly growth in sub-components of the Ctrack Transport and Freight Index (%)

The logistics sector has been completely transformed in the past five years, specifically relating to payload moving from rail to road. The main driving factor for this change has been the ongoing deterioration and underperformance of rail services offered by Transnet Freight Rail. In its monthly Land Transport data release, Statistics South Africa reports on developments in Rail and Road Freight. From reaching a rock-bottom low of only 10.3% of total freight payload being transported via rail in November 2022, the performance of the Rail Freight segment has improved somewhat to 16.1% in April 2023, though still notably lower than the 10-year average (2008-2017) of 25.9% (Rail Freight to total payload) prior to the onset of the significant deterioration. The private sector operators have, had to fill the void and Road Freight has boomed, especially post pandemic. From a ratio of 75.1% in 2017, Road Freight as a percentage of total freight being transported, has gradually improved to 84.4% in 2022. Although plans are afoot to reverse this trend, many obstacles remain, and it will most likely take a considerable amount of time, motivation and noteworthy effort to address all the current challenges before a significant shift back to the use of rail happens.

Ctrack believe that Road Freight will remain the best choice for the transporting of goods in South Africa for many years. Therefore, we are always innovating and refining our offering to ensure that our clients have the best chance of success in a cut throat business environment that needs to operate in unpredictable conditions,” says Hein Jordt, Chief Executive Officer of Ctrack Africa.

Graph 3: Annual change in Land Transport payload (000 tonnes)

Reflecting this ongoing phenomenon is a 15,2% annual improvement in the Road Freight segment of the Ctrack Transport and Freight Index, the 29th consecutive month of growth for the sector. These increases are evident in the increased heavy vehicle traffic on both the N3 and N4 routes during May. The Rail Freight segment declined further during May, after having recorded some recovery during February and March, albeit off an extremely low base. The Rail Freight segment remains deeply in the negative on an annual basis, declining by 9.6% for the year ending in May.

The Air Freight segment of the Ctrack Transport and Freight Index, which was one of 2022’s star performers, started 2023 on the backfoot, and has only improved slightly during April and May. Air Freight increased by 0.9% compared to the previous month but remains 3.6% below a year earlier. It is evident that the strain on the global economy is still filtering through to air cargo activity. According to the International Air Transport Association (IATA), lower demand for air cargo is evident across the globe, reflecting multiple headwinds facing the global economy. Air cargo tonne-kilometres (CTKs) to Africa decreased again in May, while cargo load on planes also declined by 3.6%, the second consecutive monthly decline. The number of unscheduled flights, that are typically chartered for cargo purposes also declined during May.

The Sea Freight segment of the Ctrack Transport and Freight Index, which was one of the segments hardest hit by the Transnet strike of October 2022, is still in a gradual recovery mode. Sea Freight increased by 1.3% during May and moved into positive territory on a year-to-year basis, for the first time since September 2022. Although up by 2.1% on an annual basis, the sub-sector remains 14.6% below the September 2022 pre-strike level. Container handling increased by a notable 7.7% on a monthly basis in May, while other cargo handling increased by 2.7%.

The transport of liquid fuels via Transnet Pipelines (TPL) increased by 1.7% during May, with the pipeline component of the Ctrack Transport and Freight Index improving significantly on a quarterly basis, by 6.2%, although it is still 2,3% behind the levels of the previous year.

The Storage and Handling sub-sector of the Ctrack Transport and Freight Index continued to perform well during May, with a 4.1% increase compared to April and tracking 1.7% higher on an annual basis.

Ctrack TFI and GDP growth

The transport industry was among the top three sectoral performers in the first quarter of 2023, increasing by 1.1% compared to the previous quarter seasonally adjusted (vs. 0.4% for total economy), contributing positively to the overall economic performance of the South African economy.

Additional improvements as indicated by the Ctrack Transport and Freight Index in April and May are already indicative of a sustained recovery in the logistics sector that should benefit activity in the broader economy during the second quarter and beyond. While the economic narrative remains dismal, evidence of resilience has recently been coming to the fore, with better-than-expected economic data releases. Production figures in the mining and manufacturing sectors have been surprising despite heavy load-shedding during April, suggesting that these industries are becoming progressively more resilient to the effects of load-shedding, as companies reduce their energy dependence on an embattled Eskom. Though it is still early days, it is an encouraging trend that could, if sustained, result in a somewhat better economic scenario, than what was previously envisaged.

“Despite a tough economic environment it is clear that goods still need to be transported and Ctrack offer a wide variety of solutions that assist operators in doing so as safely and efficiently as possible,” concludes Jordt.

Graph 4: Real GDP growth vs Transport sector growth (q/q change)

Table 1: Change in Ctrack Transport and freight Index in May 2023

Ctrack
Raymond Schulz / Chief Executive Marketing & Sales
012 450 2222 / Raymond.Schulz@ctrack.com

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Ctrack keeps an eye on SA Rally Championship.

Jacques Swanepoel — Thu, 25 May 2023 11:47:09 +0000

The South African National Rally championship is one of the most demanding forms of motorsport and often takes place in remote areas. These demanding conditions make it the perfect proving ground for Ctrack’s tracking solutions.

As part of Ctrack’s sponsorship of this Championship, rally vehicles are fitted with a Ctrack telemetry fleet management device. Tracking and tracing vehicles during rallies is vital to ensure safety and compliance with regulations.

Rallying is the purest form of motorsport, where competitors race against the clock on gravel roads on stages between 10 and 40km in length at very high speeds. The terrain varies and can include plantations, mountainous areas or farmland. It is imperative that organisers can track competitor vehicles so that race officials and medical personnel are immediately alerted to an incident and can easily locate crews in the event of a mishap.

Ctrack plots very accurate routes prior to the event, which allows race officials to ensure that all competitors follow the route exactly and that no deviations are taken.

“Each rally car, as well as safety and emergency response vehicles doing duty on the event, are fitted with Ctrack tracking units for the duration of the rally, and fans can follow their progress via Ctrack’s online platform,” comments Hein Jordt, Managing Director of Ctrack SA.

Ctrack’s online platform is used by rally headquarters to monitor all vehicles during the event. A live spectator tracking link can be shared on social media, allowing fans to follow the rally from anywhere with an internet connection.

The safety advantages are substantial too. If a competitor stops while on a special stage, organisers are immediately alerted, allowing them to implement emergency procedures and protocols immediately where necessary. A panic button on the tracking unit allows crews to request assistance at any time.

In the same way that rally organisers and fans track vehicles in the thick of competition, business owners can keep an eye on their fleet of business vehicles. Ctrack can provide all the fleet management tools a business will ever need, at an affordable cost. Intuitive software provides a top-down view of all vehicles, drivers and tasks, simultaneously. Through the effective use of Ctrack Iris cameras Fleet managers can enhance company processes, protect and educate drivers, reduce overall fleet fuel consumption, improve vehicle route optimization, increase load frequencies and hasten turnaround times.

Through the Ctrack Crystal platform, fleet managers or business owners can locate vehicles in real-time through easy-to-use map software that indicates a driver’s location and where they will be heading next, allowing for accurate estimated times of arrival of deliveries or arrival at the job site. In the real world, route optimisation assists in determining the best route between all the necessary stopping points, reducing time and distance that needs to be driven and, in turn, improving fuel consumption.

“For the seventh year now, Ctrack are proud to be associated with the South African National Rally Championship, the demanding conditions and remote locations under which crews race against the clock is the perfect proving ground for the tracking and tracing capabilities of our fleet management systems,” said Jordt.

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April 2023 Transport and Freight Index

Jacques Swanepoel — Wed, 24 May 2023 13:43:08 +0000

The South African logistics sector continued its recovery during April.

Download Index – April 2023

The South African logistics sector continued its recovery during April, with the Ctrack Transport and Freight Index (Ctrack TFI) reaching its highest level since August 2022 at 121.5 points. The Ctrack Transport and Freight Index increased by 1.4% compared to March, the fourth consecutive monthly increase, confirming a fairly synchronised recovery. In addition, four of the six sub-sectors that make up the Ctrack Transport and Freight Index increased on a monthly basis, while the two sectors that did decline only did so marginally.

On an annual basis, the Ctrack Transport and Freight Index is tracking 5.6% higher, compared to the 3.2% year-on-year increase measured in March, which is evidence of encouraging momentum building in the sector.

“Despite all the challenges affecting South African consumers, the continued growth of the majority of sub-segments of the South African logistics sector showcases that even in tough times, there will always be a need to transport goods and commodities, but this needs to be done in the most effective and efficient manner possible,” says Hein Jordt, Chief Executive Officer of Ctrack Africa.

Graph 1: Ctrack Transport and Freight Index

Similar to the observation in March, four of the six sub-sectors still declined on an annual basis, though the overall index level increased by 5.6% compared to a year earlier. Among the sub-sectors, Road Freight remains the most resilient, growing by 14.8% year-on-year during April 2023. Volumes transported via pipelines have also increased consistently in the past few months, with the annual growth rate now marginally positive at 0.3%.

Graph 2: Annual growth in sub-components of the Ctrack Transport and Freight Index (%)

The performance of three of the four sub-sectors, including Rail Freight, Storage & Warehousing and Sea Freight, which remain below levels of a year ago are indicative that the cumulative negative impact of the KZN flooding in April 2022 and Transnet strike in October 2022 is still being felt. Air Freight performed well last year but has recently moderated somewhat on an annual basis.

The Storage and Handling sub-sector of the Ctrack Transport and Freight Index was under pressure for most of 2022 and underperformed compared to the broader logistics sector.

However, the sector turned out to be the star performer during April 2023, with a notable 9.8% increase compared to March. The inventory index of the ABSA Purchasing Managers Index (PMI), compiled by the Bureau of Economic Research, reached the highest level since mid-2022 (58.8 index points vs 47.6 in March), as did the inventory index that forms part of the South African Chamber of Commerce and the Industry (SACCI) Trade Conditions Index (42 index points vs 35 in March) as well as the number of containers in transhipment across all container terminals in the country.

It is currently unclear whether the rapid rise in inventory levels is due to improved delivery of goods, weak demand or disruptions in the production process due to electricity shortages. Despite the improvement in April, the Storage and Handling sub-sector of the Ctrack Transport and Freight Index still tracked 8.3% lower on an annual basis during April.

The Air Freight segment of the Ctrack Transport and Freight index, which turned out to be one of 2022’s star performers, started the year on the back foot and only improved slightly during April, with a 2.2% improvement. However, it is still tracking 1.3% below the same time last year, with the strain on the global economy finally starting to affect global air cargo activity.

According to the International Air Transport Association (IATA), lower demand for air cargo is evident across the globe, reflecting multiple headwinds facing the global economy and spilling over to trading partner countries.

Graph 3: Annual growth in Ctrack TFI vs Storage and Handling sub-component (%)

Air cargo tonne-kilometres (CTKs) to Africa decreased a further 6.2% in April, the 6th consecutive monthly decline. Cargo loaded onto planes also declined by 2.1% on a monthly basis during April, while total consolidated airport flight movements dropped by 1.7%. The number of unscheduled flights, typically chartered for cargo purposes, was the only sub-component to improve during April.

The Sea Freight segment of the Ctrack Transport and Freight Index, one of the sub-segments hardest hit by the Transnet strike in October 2022, is still in a gradual recovery mode, and its performance remains disappointing. Sea Freight declined marginally in April and remained 6.0% below levels of a year ago and 19.3% below the September 2022 pre-strike level. Container handling increased by a notable 27.2% on a monthly basis during March but lost those gains during April with an 11.4% decline.

Notable discrepancies remain evident in the performance of the various South African ports. In the World Bank’s latest Container Port Performance Index (CPPI), produced by the Transport Global Practice of the World Bank in collaboration with the Global Intelligence & Analytics division of S&P Global Market Intelligence (published in May 23), South African container terminals were among the worst performing in the world. The Ngqura (position 338), Durban (position 341), and Cape Town (position 344) container terminals are in the bottom ten of the 348 terminals ranked, with the smaller terminal at Port Elizabeth, the better performer in 291st position. Of interest was the performance of other African ports, such as our Mozambican neighbours, with the terminal at Beira ranked 223rd and Maputo 248th, which is far better than the South African ports. This index measures container port efficiency based on a myriad of parameters, including terminal capacity or space utilisation, cost, landside connectivity and services, or ship-to-shore interchange. The CPPI is based on available empirical data pertaining exclusively to time expended in a vessel stay in a port and should be interpreted as an indicative measure of container port performance.

With all the sub-sectors of the logistics sector complexed and inter-twined, the dismal performance of South African ports has triggered more companies to redirect cargo towards the Maputo harbour. The number of heavy trucks on the N4 toll routes continues to increase notably on an annual basis, while the number of heavy trucks on the N3 toll route is not growing at the same rate. In April 2023, the Road Freight segment of the Ctrack Transport and Freight Index increased by 14.8% year-on-year, the 25th straight month of double-digit annual growth rates recorded and still the most resilient of all the sub-sectors.After reaching an all-time low in January 2023, Rail Freight recovered notably in February and March but subsided again in April. The sub-sector remains deeply in negative territory on an annual basis, declining by 9.3% year on year in March 2023, the 13th consecutive decline recorded and confirmation that rail remains on the back foot.

“While recent policy-related developments to revitalise the countries rail network are considered positive, there will need to be serious motivation for transport operators to replace Road Freight in favour of Rail transport once again,” says Jordt.

The transport of liquid fuels via Transnet Pipelines (TPL) increased by 1.2% on a monthly basis during April 2023, with the pipeline component of the Ctrack Transport and Freight Index now moving into positive territory on an annual basis, for the first time in seven months, with growth of 0.3%.

The Ctrack TFI and GDP growth.

The transport sector defied expectations of underperformance in the fourth quarter of 2022 to be the best sectoral performer, and all indications are that the transport sector once again outperformed other sectors of the South African economy during the first quarter of 2023. The Ctrack Transport and Freight Index mirrors this performance with a significant increase of 6.6% during the first quarter of 2023, signalling a valuable positive contribution to economic growth. Statistics South Africa is expected to release the real first quarter GDP growth rate on Tuesday, June 6, with expectations of a small positive quarterly growth rate, allowing the economy to avert a technical recession.

“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. In this environment, the transport sector’s resilience creates a sliver of hope for the South African economy,” concluded Jordt.

Graph 4: Ctrack TFI vs Transport sector growth (q/q change)

Source: Ctrack, TNPA, StatsSA, SARS, N3 and N4 toll concessions, ACSA, ACOC, IATA.

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Ctrack Recovery Operation: A Testament to Efficiency & Expertise

Jacques Swanepoel — Mon, 22 May 2023 13:53:04 +0000

In a remarkable display of efficiency and expertise, Ctrack’s Recovery Team swiftly retrieved a hijacked vehicle and apprehended suspects, ensuring the safety of the driver and minimizing losses for the client. The immediate response and coordinated efforts of Ctrack’s team resulted in a positive outcome.

Upon receiving the distress call, the Ctrack Risk Coordinator acted promptly and dispatched Ctrack’s highly trained Recovery Team to the precise GPS location of the vehicle. The Team wasted no time and efficiently pinpointing the vehicle location and with constant communication between Ctrack, the Recovery Team, and the client, all parties remained fully informed throughout the operation.

The vehicle was recovered but the trailer load was already removed. By using Ctrack’s telematics data to backtrack the vehicle’s previous locations and stops, suspicious behaviour was identified and an area of interest was pinpointed to which the ground team and authorities were led. There they were able to successfully secure a portion of the load and apprehended five suspects involved in the incident. The client was immediately informed of this significant development. Furthermore, the team’s thorough investigation of the area and surroundings led them to an illegal drug operation nearby, where the additional stolen cargo was recovered, further highlighting their dedication to retrieving the client’s assets.

All five suspects involved in the incident were apprehended by the Ground Team, displaying their professionalism and commitment to resolving the situation. The team then efficiently loaded the recovered cargo back onto the vehicle. Under the guidance of the Ctrack Risk Coordinator, the operation was expertly managed, and the team returned safely to the base, marking the successful conclusion of the recovery mission.

“At Ctrack, our utmost priority is the safety and security of our clients and their valuable assets,” says Hein Jordt, Chief Executive Officer of Ctrack Africa. “We take immense pride in the rapid and effective response of our Ground Team in this incident. Leveraging our cutting-edge telematics solutions and a highly skilled team, we ensure exceptional outcomes for our clients during critical situations.”

As a leading telematics provider, Ctrack remains committed to providing superior fleet management solutions, employing state-of-the-art technologies and a dedicated team to mitigate risks and deliver unparalleled customer satisfaction. With a relentless pursuit of excellence, Ctrack continues to set industry standards in comprehensive fleet risk management.

Note: due to this case being an ongoing criminal investigation, the company and persons involved are withheld.

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Ctrack enhances functionality of Crystal fleet management platform.

Jacques Swanepoel — Thu, 04 May 2023 06:01:10 +0000

Ctrack Crystal is an all-encompassing, customisable fleet monitoring platform that places ease of use at its core. As part of its latest update, Ctrack’s Crystal software has been refined with additional industry-defining functionality along with flexible and scalable AI software to assist with everyday business needs, all from one platform.

“Ctrack understands that the needs of our customers are always changing. Fortunately, since Crystal is cloud-based, it can be continually refined without any disruption to the daily functionality,” says Hein Jordt, Chief Executive Officer of Ctrack Africa.

The last-mile delivery industry has shown tremendous growth in the last three years with no signs of slowing down. The latest updates to Crystal are particularly attractive to this industry. Fleet managers can now assign jobs to drivers and provide them with details regarding pickup and delivery, such as address or specific instructions when they reach the location safely via the Crystal app.

Crystal now includes Electronic Proof of Delivery. It is fully customisable and could consist of digital documents such as an Invoice or a Delivery Note, ensuring peace of mind and a time-stamped record that packages arrived safely at their destination. This Sign-on Glass technology, along with the fact that you can always see exactly where drivers are, assists with making better business decisions and delivering on your promise to your clients.

New scheduling functionality allows for optimal use of resources and vehicles. Real-time data allows for visual comparison between planned and actual delivery and turnaround times, enabling fleet managers to continuously refine schedules due to unforeseen delays or traffic. Once on the road, this routing automatically adapts to changing conditions, assisting drivers in delivering safely and on time. Refuelling can be planned in such a way that the impact on the schedule is minimal, and drivers can easily be alerted should they need to deviate from the schedule, such as in emergency situations.

The driver app, which forms part of the Crystal offering, gives managers and drivers enhanced control of their daily activities using one single application that offers a myriad of functionality and allows for the safe navigation of their schedule and on-time status.

Clear communication with drivers ensures a smooth running operation. Now drivers can receive a job list and route guidance via the Crystal app. Sign-on-Glass technology with integrated Electronic Proof of Delivery ensures quick and efficient movement of goods to and from the vehicles, all within the same app

Further enhancements to “Crystal” also includes the addition of video monitoring straight from the “Crystal” platform, with the viewing and management of all of a fleet’s cameras in real-time. This technology enables fleet managers to see exactly what is happening in the cabin or load bay of any of their vehicles at any time.

User-friendly functionality includes a picture-in-picture option, downloadable video clips, SMILE script integration, Artificial Intellegence analysis of video feeds to create alerts, access to fleet video feeds from within a map view, date or location view as well as user defined video alerts such as harsh braking, G-Force, or speed limit transgressions.

“The ability to create and optimise jobs, monitor route adherence, view your fleet via video feed in real time, and capture electronic proof of delivery from one single platform allows for simple and efficient management of your entire fleet,” adds Jordt.

The customisation options and advanced functionality of Ctrack Crystal make it perfect for any business – no matter their size – that utilises movable assets to take control of their business operations and have access to data that assists them in making better decisions. Users can choose from a variety of functionality packages as their needs change.

With Crystal users can now ensure optimum fleet utilisation with daily productivity reports of the entire fleet displayed on the dashboard for easy success.

“Live data is crucial for the optimal running of any fleet operation, and a powerful user experience allows fleet managers to be more proactive. Real-time visibility of all assets via a digital dashboard ensures efficient management,” concludes Jordt.

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March 2023 Transport and Freight Index

Jacques Swanepoel — Wed, 03 May 2023 11:46:29 +0000

The South African logistics sector continued its recovery in March.

Download Index – March 2023

The South African logistics sector continued its recovery in March, with the Ctrack Transport and Freight Index reaching its highest level since September, the last month before the crippling Transnet strike hit the sector. 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, accelerating much needed momentum in the sector.

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, representing a much-needed positive contribution to the country’s GDP.

Graph 1: Ctrack Transport and Freight Index % change on a monthly basis

Interesting trends are emerging.

The performance of four sub-sectors, including Rail Freight, Storage and Warehousing, Sea Freight and Pipeline Transport, remain below levels of a year ago. This strongly indicates that these sectors have still not fully recovered from the cumulative negative impact of the KZN flooding in April 2022 and the Transnet strike in October 2022.

Graph 2: Quarterly growth in sub-components of the Ctrack Transport and Freight Index (%)

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,” says Hein Jordt, Chief Executive Officer of Ctrack Africa.

Recovery of Sea Freight needs to increase

The Sea Freight component of the Ctrack Transport and Freight Index was one of the hardest hit when Transnet workers embarked on strike action in October 2022, and the results are still being felt, with Sea Freight declining by 10.9% in March compared to a year ago and still tracking 9.8% below the September 2022 pre-strike level. However, the sector has slowly been recovering from this low base, with growth of 10.3% recorded in the first quarter. Container handling increased by a notable 27.2% on a monthly basis in March but remains 17.9% below the September 2022 pre-strike level. Contributing to this slow recovery are notable discrepancies among the different ports. Container handling in Cape Town was only 2.6% below pre-strike levels in March, whereas the Durban port is still 14.7% behind, and The Port of Ngquara is performing a notable 40.2% lower.

In light of the importance of Sea Freight in the logistics sector, but also for the efficiency of trade in the broader economy, Transnet Port Terminals (TPT)’s is putting plans in place to enter into long-term agreements with original-equipment manufacturers (OEMs) for the supply and life-cycle maintenance of key port-handling equipment. It aims to position the business for significantly higher levels of efficiency across its 16 terminals, which have faced significant disruption in recent years. CEO Jabu Mdaki indicated that the strategy would be deployed in phases and involves contracting directly with the OEMs for 11 pieces of key equipment, initially starting with rubber-tyred gantry cranes.

It is evident that the Sea Freight sub-sector has been an under-performer relative to the broader transport and freight sector since early-2021. A step up in efficiency would go a long way in restoring the sector to its potential and increasing its contribution to the broader economy. The plans being put in place are a great prospect, but implementing the strategy will be key,” adds Jordt.

Graph 3: Rail vs road freight indices (2016=100)

After reaching an all-time low in January 2023, Rail Freight continued to recover in March, though of 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. This represents the 12th consecutive decline, confirming that rail remains the Achilles heel of the South African logistics sector, a position the sector will likely retain for many years to come.

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. Overall, Road Freight payload for the country decreased by a notable 9.1% in March compared to the previous month but showed continuous growth compared to a year earlier. The sector faces on-going challenges, including crime, sabotage and notable operational cost increases.

Air Freight, which turned out to be one of 2022’s star performers, started the year on the back foot but picked up marginally in March, increasing by 0.3% while remaining flat compared to a year earlier. Mixed trends were observed; cargo load on planes increased by 11.2% on a monthly basis in March, following growth of 8.7% in February, while total consolidated airport flight movements also increased by a notable 16.2%. Other underlying components of the sub-sector declined. According to the International Air Transport Association (IATA), lower demand for air cargo is evident across the globe, reflecting multiple headwinds facing the global economy and spilling over to trading partner countries. Air cargo tonne-kilometres (CTKs) to Africa decreased a further 3.4% year on year in March, following February’s 9.4% and January’s 10% annual decreases.

The Storage and Handling sub-sector of the Ctrack Transport and Freight Index was under pressure for most of 2022, with a trend of declining inventory levels evident. The Transnet strike just worsened matters, resulting in a further 20.8% decline in March compared to a year ago, a monthly decline of 1.7% and a quarterly decline of 11.6%.

The transport of liquid fuels via Transnet Pipelines (TPL) increased by 3.2% month on month during March, resulting in a 14.2% quarterly increase. However, this is still tracking 1.4% lower than the year before.

The Ctrack TFI and GDP growth.

The transport sector defied expectations of underperformance in the fourth quarter of 2022 to be the best sectoral performer, and all indications are that the transport sector will save the day for the South African economy in the first quarter once again. March’s solid improvements, as measured by the Ctrack Transport and Freight Index, showcased a strong quarterly performance of 6.6% in the first quarter of 2023.

“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. In this environment, the transport sector’s resilience creates a sliver of hope for the South African economy,” concluded Jordt.

Graph 4: Real GDP growth vs Ctrack TFI (q/q change)

Source: Ctrack, TNPA, StatsSA, SARS, N3 and N4 toll concessions, ACSA, ACOC, IATA.

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