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Home > Business/Finance > Diversified Services > Shipping & Logistics
South Africa Freight Transport Report Q3 2007
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An average of almost 40 people died in crashes each day on South African roads in December 2006, and
poor safety levels remained a concern into 2007. There were a string of fatal accidents throughout the first
half of the year. The crashes have been blamed on careless drivers, some drunk or sleep-deprived in high
traffic volumes, and on drivers in cars carrying more passengers than seatbelts. Dangerous roads are a
serious constraining factor for South Africa’s road haulage industry. An estimated four in 100,000 people
a year die in road accidents across Europe, compared to 25 per 100,000 in South Africa, according to
Arrive Alive, which monitors road safety under the auspices of the national Transport Ministry. The
ministry has unveiled a plan to halve the number of fatalities from around 18,000 annually - including
pedestrians struck by vehicles - in less than four years. In this latest South Africa Freight Transport
Report, BMI concludes that freight carried by road in South Africa is set to increase at an annual average
rate of 7.3% over the next five years, ahead of the general rate of GDP growth.
Various factors support this prediction. The outlook for both domestic economic growth and exports is
encouraging. We expect the economy will grow at an annual average rate of 5.7% across the 2007-2011
forecast period, with foreign trade rising by 17.2% a year in value terms. Government policy favours
resumed investment in rail freight, but this will take a long time to feed through and will not act as an
immediate threat to road haulage. South Africa’s rate of economic expansion has been spurred by
domestic consumption, investment growth and international demand for commodities. These have
resulted in strong demand for transport services; buoyant consumption has maintained the need for import
growth; export shipments of gold, platinum group metals, chrome, manganese and coal have necessitated
increased freight services. Real GDP growth will also be boosted by South Africa’s plans to foster
regional expansion in southern Africa, and this entails improving and extending the transport network.
We expect road haulage to grow a little faster than GDP, although poor road quality in some areas will be
a restraining factor. Rail freight will lag behind the economy’s general growth rate due to an ongoing
investment shortfall, and despite current catch-up attempts. Sea freight will broadly follow GDP,
supported by port-expansion plans and the current attempt to persuade shipping companies to re-flag their
fleets, joining the South African merchant marine. Airfreight has expanded relatively slowly in recent
years, although the expansion of low-cost carriers and an increasing focus on the African regional market
should inject some extra dynamism in the forecast period. Combining all these factors, our conclusion is
that total freight volume across the different modes, measured in million tonnes-km, will rise by an
annual average of 7.1% in the 2006-2010 forecast period, ahead of GDP.
South Africa’s overall business environment rating is above the average for the Middle East and Africa
(MEA) region. It scores well in terms of political and economic factors and in its regulatory background,
but its record in relation to historic and forecast growth in foreign trade and in transport remains relatively
weak. By the very nature of the industry, many of the problems associated with reforming transport
network, facilities and services have to be considered over a medium-term time frame.
According to our latest estimates, the total value of transport and communications GDP will rise to
US$28.57bn in nominal terms by 2011, representing 8.2% of South Africa’s GDP.
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