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Hacking and looting hamper recovery in the Freight Transport sector

THE recent looting and unrest have had a massive impact on the majority of sectors measured by the Ctrack Freight Transport Index.

The Ctrack Freight Transport data shows a split set of data. On a year on year basis, the numbers look extremely strong for the sector. However, the quarter ending in July shows the first decline in a year.

The decline between June and July is the steepest decline since April 2020, when level five lockdown restrictions were implemented.

A decline of 9,7% (slightly estimated due to some Transnet Port data not being available in time) between the months of June and July shows that the freight transport sector was severely affected by the looting in KZN and Gauteng.

As a result, the overall Ctrack Freight Transport Index declined to levels last seen in August 2020. It is almost as if a whole year of progress was wiped out in a few weeks.

Every day over 6 500 containers move in and out of South African ports. There is no way that this operation can run without the sophisticated computer system that is in place.

Modern logistics is a system that is held together by information and computer networks. Hackers know this and were most probably hoping that they would be paid to put things right in the wake of the chaos caused by the downtime of Transnet’s computer systems.

The damage to the South African economy caused by both these events was significant and will be felt for some time. While the crossing of borders is still tedious due to the COVID test requirements, the impact could last longer than normal. The timing of these two incidents, in close succession of each other, could mean that delays at the ports could take weeks, if not months, to resolve.

The country’s GDP could have grown by about 1% if not for these two events, which affected the logistics industry, centred in Kwa-Zulu Natal, but with effects felt in Gauteng, as this is where the majority of the goods were headed.

All but one Freight Sector declined.

The majority of sectors measured by the Ctrack Freight Index have declined in recent months. Sea Freight was the biggest loser declining by 24,3%, followed by Storage and Handling with a decline of 16,2%. Even the two fastest-growing sectors, Road Freight and Air Freight, have declined with losses of 9,3% and 3,2% respectively.

The measurement of truck movements through 84 key points across the country backs this data up with a decline of 11,5%. However, points in Kwa-Zulu Natal reported more significant declines of over 20%. Pipelines were the only sector to show growth.

Losses are massive for companies, clients and staff.

The monetary losses and the delays suffered by the Road Freight sector are estimated to be in the region of R9 billion, although some of those losses should be made up in the catch-up period. Transnet ports also lost well over R1 billion. The losses in other sectors are still to be calculated but with ten major distribution centres destroyed while many other storage facilities suffered damage.

The Road Freight Association estimates that about 250 trucks were totally destroyed while many more suffered minor damages such as broken lights and windows.

Clients had to close for days on end, as intermediated stock for manufacturing did not arrive while in some cases shelves stood empty.

The global microchip shortage caused by worldwide supply chain issues was exacerbated by shipments being stuck in the harbours for an additional ten days.

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