Ctrack Transport and Freight Index records marginal increases

The CTFI advanced by just more than one point in January 2022 to an index level of 109 compared to 107.6 in December.

This incremental increase still reflects ongoing global supply chain problems, while the sub-sectors that make up the Ctrack Transport and Freight Index reflected a mixed bag in terms of performance.

Three of the six sectors moderated, namely, Sea Freight, Air Freight and Storage. Countering the weakness evident in these sub-sections, the star performer Road Freight continued to power ahead in January, while Rail Freight showed an unexpected monthly increase and transport via pipeline has also recovered notably, wiping out the moderation that was evident in the past three months.

On a quarter-on-quarter basis and on a three-month moving average basis, the CTFI is tracking 0.7% higher in the three months to January 2022, compared to the three months ending October 2021, while a monthly increase of 1.3% was recorded in January 2022. On an annual basis, the CTFI is tracking 6.4% higher in January than a year earlier. Although it is still early days, it could signal some acceleration in economic activity levels early in the first quarter of 2022.

“Continued growth in the Ctrack Transport and Freight Index is great to see given the variety of external factors, ranging from supply chain issues to rising fuel prices, contributing to the difficulty in doing business in the transport sector,” says Hein Jordt, Chief Executive Officer of Ctrack Africa.

Road Freight transport, which contributes 47.8% to the CTFI, increased by 14.6% compared to January 2021, based on a three-month moving average. Quarterly, Road Freight improved by 1.2% in the three months ending January 2022, compared to the three months ending October 2021, while a monthly increase of 2.0% was recorded in January 2022.

Road Freight continues to benefit from the troubles experienced by Transnet Freight Rail (TFR). Transnet Freight Rail recently indicated that they hope to entice trucking companies operating between Gauteng and Durban and on other routes to consider coming in as private rail operators as the company admits it is facing major challenges. Still, only time will tell if trucking companies would be interested in taking on that additional business risk.

The strong performance of Road Freight is hopefully also a sign of economic recovery, as we do forecast that the South African economy will continue to recover gradually in 2022, from the significant contraction recorded in 2020. With the low base effects a thing of the past, growth in 2022 will better reflect the underlying momentum in the South African economy. Only mediocre real growth of about 2% is forecast for the three years to 2024, with several notable risks and ongoing hampering factors still keeping a lid on growth, including intermittent load shedding, higher inflation and interest rates and slow progress on much-needed structural reform.