After declining for eight consecutive months to reach a revised index level of 113.5 in January 2025, the lowest since December 2022, the Ctrack Transport and Freight Index (Ctrack TFI) increased in each of the three months to April to reach an index level of 115.4.
At this level the index is 1,6% higher than in January, but still 6,4% below a year earlier. While somewhat of a bounce-back, in essence it can only be seen as a stabilisation of the logistics sector after a pro-longed slump, as underlying weaknesses in some of the sub-sectors remain prevalent.
Considering the first four months of 2025, three sub-sectors contracted compared to a year earlier and three sectors advanced. However, given that the heavy-weighted road freight sub-sector remained under pressure, the overall logistics sector lagged by 4,7% compared to the corresponding period one year earlier:
Road freight (-7,5%), transport via pipelines (-13,8%) and the sub-component for storage and handling
(-10%) contracted, while the air freight (14,1%), rail freight (3,9%) and sea freight (1,2%) sub-sectors recorded growth. Following following monthly increases in the Ctrack TFI in February and March, the index stalled in April, suggesting that the sector is by no means out of woods yet.
The heavily weighted Road Freight sub-sector remained under pressure in the first months of 2025, a continuation of a trend that started in mid-2023. From a high of 89,1% in November 2022, road freight now accounts for only 82,1% of all freight payload in South Africa.
The mining sector contracted on average by 2,2% in the three years to 2024 (in real terms) and further by 4,1% q/q in Q1 2025. Similarly, the agricultural and manufacturing sectors contracted on average by 3,7% and 0,1% respectively in the corresponding time period, while manufacturing contracted further by 2.0% q/q in Q1..
Additional factors include the redirection of cargo ships towards other ports in Africa, resulting in less demand for heavy vehicle transport in South Africa, and some improvement in rail freight transport, although the latter explains less than 20% of the observed drop in road freight transport in Q1 2025. While heavy vehicle traffic on the N4 route towards Maputo remained under pressure in the first four months of 2025, a continuation of a trend that commenced in 2024, the number of heavy trucks (class 3 and 4) passing through the Tugela Toll Plaza on the N3 route increased somewhat in the first four months, following on a contraction of 1% in 2024.
The recovery in the Rail Freight sector is still on track and likely to see more cargoes moving from road to rail in coming years. Encouragingly, Q1 2025 marks the third consecutive quarter in which the rail freight sub-component increased, compared to a year earlier. However, this is a slow-moving trend and not the main driver of slack in the road freight sector.
The rail freight sector remains a top priority in government’s structural reform initiatives, as outlined in the Freight Logistics Roadmap and reiterated as part of ongoing reforms that will remain the focus of Operation Vulindlela’s recently launched second phase.
In the first four months of 2025, the Air Freight sub-sector continued to perform well, aligning with global trends. In April global air freight volumes continued the growth trend observed in the previous month, up by 5,8% y/y in Cargo Tonne-Kilometers (CTK).
After contracting for two consecutive years, the Sea Freight sub-component increased by 3,4% in 2024 and continued the positive trend with average growth of 1,2% in the first four months of 2025.
The Storage and Handling sub-sector of the Ctrack Transport and Freight Index declined by 0,1% in 2024, following two years of larger contractions, with inventory indicators suggesting further pressure in the first four months of 2025. Similarly, the transport of liquid fuels via Transnet Pipelines (TPL) declined by 1.8% in 2024 (following on a decline of 1.0% in 2023) and started the year mostly in similar trend. However, a notable increase in pipeline transport during April signals a potential positive trend shift in this sub-sector.
The recovery (though hesitant) in the Ctrack TFI in the first few months of 2025 signalled that the transport sector would be a positive contributor to overall GDP in Q1, for the first time since Q4 2023. The transport and communication sector has been a significant under-performer in the broader economy in each of the four quarters of 2024, but early indications are that the sector has turned the corner and could likely perform better in 2025. Encouragingly, the transport and communication sector increased by 2,4% q/q, seasonally adjusted in Q1, compared to -1,1% in Q4.
The stabilisation of the logistics sector as reflected in the latest reading of the Ctrack TFI is indeed welcomed. So too is the significant attention given to freight and logistics in the recent National Budget. Over R400-billion has been allocated to the sector, with specific provisions for road maintenance, rail infrastructure renewal, and public-private partnerships. The Minister also confirmed consideration for government guarantee support to Transnet, which has since materialised through Minister Creecy’s R51 billion guarantee facility to stabilise Transnet’s capital programme and enable reform implementation.