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Africa|Business|Environment|Financial|Freight|Logistics|Ports|rail|Road|Service|Storage|supply-chain|Tourism|transport|Trucks|Products
Africa|Business|Environment|Financial|Freight|Logistics|Ports|rail|Road|Service|Storage|supply-chain|Tourism|transport|Trucks|Products
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Ctrack Freight and Transport Index records steepest decline on record

28th May 2020

By: Schalk Burger

Creamer Media Senior Deputy Editor

     

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The Ctrack Freight and Transport Index decreased by 14.7% in April, while cargo transfers between countries declined by almost 40%, Ctrack MD Hein Jordt says.

"The dramatic decline of 14.7% in the Ctrack Freight and Transport Index for April is an important indicator of the very worrying situation that currently exists in the logistics and transport sectors of the South African economy. The fact that the data is smoothed out to better show trends does not fully reflect the logistics horror now apparent in South Africa.

"For that, we will have to wait for data from May and possibly June. It is probably at its worst right now (end May)," he adds.

The volume of goods shipped and landed in South African ports was less than at any time since 2000.

Aircraft movements came to a virtual standstill in April and were the lowest in living memory. There were only a little more than 2 000 fights into or out of South African airports, while the amount of goods transported is probably the lowest since World War II.

Road freight volumes, even when smoothed, were the lowest since 2008. The road freight sector, which has been operating partially since the lockdown started at the end of March, transported 16.5% less cargo than a year ago.

"Again, this number is smoothed, and the raw monthly data reveals a decline closer to 40%. However, due to the volatile nature of this data, we have used a rolling three-month average. We expect slightly better monthly numbers in May, but the rolling three-month average will be lower still," Jordt notes.

Rail freight also declined by 11% year-on-year. The actual volume of cargo transported is similar to the amount moved in January 2008.

Air freight declined by 23.5% year-on-year on a smoothed basis. "This is by far the most effected sector in the Ctrack Freight and Transport Index. Air freight has been damaged so badly that it is not only passenger carriers that are seeking business rescue, but air freighters and freight forwarders too. The air transport crisis is hurting everything from tourism to car rentals and also fresh produce cargo shipments," Ctrack points out.

Ships have been left moored outside ports while the cargo transferred between ships and ports fell by 9.5%. "We suspect this situation will decline further as the unadjusted data shows an even bigger decline. Many shipping companies are actively seeking financial assistance, as are airlines."

Storage is also in a steep decline, despite some storage operators having to store more goods than usual as certain goods are being packed into warehouses to keep ports clear.

Some local warehouses, which are virtually full to capacity are selling storage space at a premium, which is adding to the overall cost structure of the SA economy.

Accurate planning and up-to-date information are now, more than ever, the road transporter’s best friend. These are vital cogs to help guide companies through the mess that Covid-19 has created, emphasises Jordt.

"Very few industries will escape being impacted negatively by the Covid-19 virus crisis and subsequent lockdowns around the world. The result is that the world’s transport logistics and supply chain management are in a mess.

"The most important news, however, is that we believe the worst of the storm is almost over and we trust it will never happen again in our lifetime. Fortunately, the transport and logistics sectors are resilient and will recover, but this recovery will take far longer than what would be ideal."

Now is the time for transport and logistics to look ahead and develop manageable strategies and business plans to get businesses back on their feet. The business environment also will be more competitive than ever as everybody tries to recover from the economic setback.

"We only have a limited timeframe to reach out to existing customers and assure them of our ongoing support so as to retain them. We have to develop methods of attracting new customers too. It is customers who will decide your future with their wallets and service level expectations," he said.

"Just as people stayed at home so too did many goods. Goods stayed on the ground, in warehouses, on trucks and ships. Comparatively few products have reached the supply chains. The situation has caused such a cargo jam that it will take months to clear."

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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