Economists have expressed grave concern over the steep decline in road freight volumes amidst the global Covid-19 pandemic.
The Ctrack Freight Transport Index declined by 14.7% in April – an important indicator of the very worrying situation in the logistics and transport sectors of the economy.
According to economist Mike Schüssler, the road freight sector transported 16.5% less cargo in April than a year ago, the air freight sector 23.5%, freight transport 14.4%, and rail freight 11%.
“Declines in April were recorded across transport sectors except for pipelines. This has more to do with the storage of oil than demand,” he said. “While our numbers are smoothed – so they do not show the deepest depths and the highest highs – the essence is that April was probably the worst month. May will be similar.”
If one were to consider only the raw monthly data and not smooth figures as is being done, declines for road freight in April would be closer to 40% than 16.5%.
Schüssler said looking back over the past ten years both road and rail freight had shown a decline, but it was the sudden steep decline in road freight at present that was very worrying.
“The volume of goods shipped and landed in South African ports in April was less than at any time since the year 2000. I think that we are probably back to levels last seen in this country before it became a democracy. Our road freight volumes are at the lowest since 2008, while rail is at early 2008 levels. Both sectors are still declining.”
He said the figures were expected to improve slightly for June and July due to the easing of lockdown restrictions in South Africa and internationally.
“The latest statistics released by Stats SA show a very deep recession, much deeper than we experienced in 2008. Volumes will improve, especially the bulk commodities will return, but the last 5% recovery is going to be a challenge. Getting that back – if at all – will take time.”
Addressing members of the Road Freight Association (RFA), Schüssler said accurate planning and up-to-date information were of critical importance to road transporters.
“My advice to you is to find the leaks in your companies and plug them now. From corruption to parts of the business that might not fit and cost you money, stop losses as soon as possible. Keep up to date with information, never stop marketing, and use the weak rand to your advantage as much as you can.”
