South African freight volumes drop
The Ctrack Freight & Transport Index for February 2020 shows an overall freight volume decline of 4,8 percent compared to the same period last year. While substantial, the fall is less than the 5,1 percent decline in freight volumes reported in January 2020 (versus January 2019).
It is likely that coronavirus fears drove pre-emptive buying, which resulted in slightly increased storage volumes and inflated internationally linked sea and air freight volumes. However, air freight is in a steep decline worldwide, and has been for a while. The exceptions to the overall drop of 3,3 percent in world air freight volumes stem from improved volumes in Africa and Latin America.
As can be seen in Graph 2, for some selected countries air freight is a fragile sector, and was the first to be impacted by the virus. However, some reports suggest that, in the short term, air freight will benefit from emergency shipments of medicines and medical equipment needed to fight the pandemic.
The storage/warehousing sector reversed dramatically, from -8 percent to +0,8 percent, which Ctrack believes is a function of previously low inventories and attempts to mitigate supply chain disruptions. “It seems that the increase in storage volumes was primarily due to foreign freight arriving in South Africa. The only explanation we have at present is that the fear of running out of goods was exacerbated by already low levels of stock caused by the weak economy,” says Hein Jordt, managing director of Ctrack South Africa.
The land transport sector remains in recession as the domestic economy continues to splutter. Road freight volumes, which make up nearly half the weight of the freight transport sector, are close to recording a double-digit decline.
“The reduction in numbers was expected considering the growing fears related to the coronavirus pandemic. As we are experiencing right now, the lockdown in South Africa will make matters worse during the next three to six weeks. What is positive is the stockholding that was increased due to the coronavirus effect, and the current general stock in warehouses shows that the country could recover very fast once the lockdown is lifted,” says Jordt.