The importance of the Transportation and Logistics Industry in South Africa

 

The transportation and logistics industry of South Africa contributed 9.3% to the GDP in 2020, which amounted to 231.9 billion rands added value to the economy. However, it is estimated to be closer to an added value of 480 billion rand due to the fact that major retailers, such as Pick ‘n Pay or Spar, transport and store their own goods then list these costs as retail costs. This means large amounts of transportation and warehousing costs are being written off as retail costs instead of under the correct categories. 

 

The transportation and logistics industry is a key player in the movement of numerous large transactions. It is responsible for the sale and distribution of all goods brought into the country as well as those being made locally. Without a solid transportation and logistics industry the economy would collapse. In South Africa, the industry employs roughly 336 000 employees and is predicted to grow by 4% in the next 5 years. 

 

Factors influencing the Transportation and Logistics industry

 

Let’s discuss the various factors that are helping the industry grow.

 

AfCFTA (African Continental Free Trade Agreement)

 

In 2018 South Africa signed the AfCFTA proposal which is a trade agreement between the African countries to work together to create a single continent-wide market for goods and services. It also includes the framework to promote the movement of capital and natural persons throughout the continent. This agreement is predicted to boost the regional income of those involved by 7% and promote growth in each country’s transportation and logistics industries.

 

Higher demand in the Cold Chain Market

 

As the economy strengthens and the middle class grows so does the preference for cold meats, canned foods and packaged foods. As this preference grows so does the demand for cold storage and transportation facilities. This demand has also been driven higher thanks to covid and the need to transport vaccines around the world in cold storage.

 

The leader in manufacturing Isotopes

 

Thanks to South Africa’s talented doctors and researchers they have become the leading manufacturer and exporter of isotopes, which are used in medical diagnostics. Further improving our already well-developed transportation and logistics industry. 

 

More E-commerce stores

 

Covid-19 and the development of technology have spurred on the increase of online entrepreneurs. The e-commerce industry has become one of the fastest-growing industries in 2020 which directly impacts the transportation and logistics industry. Couriers, mail and delivery services are in higher demand thanks to e-commerce stores. As the e-commerce industry is expected to grow by approximately 12% this year, it can only be estimated how the transportation and logistics industry will be affected. The predicted growth rates may have to be recalculated in order to include the indirect impact of the e-commerce industry. 

 

Transportation and Logistics services

 

Bridgewater Logistics is a multifaceted company that offers businesses a comprehensive range of transportation services such as containerized transportation, cross-docking, distribution, dedicated transportation, line hauling and warehousing to name a few. We pride ourselves in our adaptability and mission to deliver the best service to our customers. If you are in need of transportation and logistics services please contact us on 010 020 2518.