By Jessie Taylor
The transport sector is a vital cog in the South African economy. It enables other sectors to grow, such as mining, manufacturing, and agriculture, while creating jobs and revenue. The industry employs more than 415 000 people and boasts one of the highest scores for black-owned enterprises.
Essential support for economic activity
South Africa’s transport and logistics industry contributes around R270-billion to the country’s GDP. A thriving sector in its own right, the transport industry allows other sectors which drive the economy to flourish – aiding economic growth and recovery. The industry comprises several arms, including rail and road freight, shipping, and air transport.
An effective transport sector allows South Africa to remain competitive in the global market and can accelerate development and access to basic services.
The sector has seen an increase in employment between Q2 and Q3 of 2022, with more than 4 000 additional people employed – a rise of 1%.
Employment in the transport, storage and communication sector
- 415 000 total employees in September 2022
- 397 000 full-time employees in September 2022
- 18 000 part-time employees in September 2022
Gross earnings paid to employees
- R35.4-billion in September 2021
- R 36.1-billion in September 2022
- 32.8-billion was paid in wages in September 2022
- R1.2-billion was paid in bonus payments in September 2022
- R1.9-billion was paid in overtime in September 2022
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African Continental Free Trade Area a boost for the transport sector
The World Economic Forum has forecast that the transport sector is likely to see rapid growth under the African Continental Free Trade Area (AfCFTA). The AfCFTA agreement became operational on 1 January 2021. The World Economic Forum’s AfCFTA forecast report said that the majority of intra-African exports are transported over land. It also estimated maritime trade would jump from 58 million to 132 million tons by 2030. The report anticipated that AFCFTA would have increased intra-African freight demand by 28% by 2030, necessitating the use of about two million trucks, 100 000 rail wagons, 250 aeroplanes, and more than 100 vessels.
Intra-African exports transport
- 60% of automotive exports are transported over land:
- 56% of pharmaceutical exports
- 60% of agro-processing product exports
Freight transport in South Africa
- 42 860 000 tons were transported by rail freight in 2022
- 188 446 000 tons were transported by road freight in 2022
A new path towards transformation
Transformation in the sector has dealt some blows, with the industry operating on B-BBEE codes of good practice that have not been updated in a decade, according to the Sanlam Gauge 2022 report. It has also lacked guidance from a charter council – which is at the core of policing B-BBEE progress – for several years.
Despite these challenges, the sector remains a level 4 contributor with 85.5 recognition points. The report found that the sector scores particularly highly in terms of black ownership, at 90.3% of the target, making it the highest of all sectors by some margin. Transport also comfortably exceeded its socio-economic scorecard weighting.
Because the transport sector is driven by procurement, transformation in the industry can significantly impact customers’ B-BBEE performances.
The area in which the industry struggled to reach its targets is management control, which sits at 55.5% of the target. In terms of skills development, transport is the worst-performing sector at 66.4%. It was also the worst performer, with ESD at 58.7%.
Estimates say that less than a tenth of all jobs in the transport sector are held by women. However, various initiatives exist to increase the number of female professionals in the industry, including training programmes. For example, the Commercial Transport Academy (CTA) recently announced an initiative to empower almost a thousand women in the transport sector.
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Sources:
Business Tech | Sanlam Gauge Report | Transport Evolution | DBSA | Engineering News | News24 | Stats SA| World Economic Forum