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.