South Africa’s stalling economy is a result of national challenges such as labour unrest and pressure on the mining industry.

There has also been an international fall off in demand for its goods and services, notably from Europe which is one of South Africa’s chief export destinations, according to a report by PwC, entitled ‘Africa Gearing Up – Future prospects in Africa for the transportation & logistics industry.’

The country has the best infrastructure of any country on the continent and is the best performer in terms of trade facilitation and logistics. However, obstacles including rigid labour policies have dampened growth prospects. The country is also in the grip of a triple challenge of poverty, unemployment and income inequality, according to the report.

However South Africa has trade and industrial policies aimed at encouraging local companies to explore new areas of growth based on improved competitiveness – China, India and Brazil offer significant opportunities. Infrastructure, mining, finance and retail developments across Africa are helping to fuel a growth trajectory in which South Africa can participate.

Despite economic headwinds, there is a forecast for growth across South Africa’s freight transport modes – airfreight, road freight, and rail freight – in 2016.

Growth forecast for South Africa’s freight transport modes

Growth forecast for South Africa’s freight transport modes
Source: South Africa Freight Transport Report Q1 2016 published by International Business Monitor

In 2016 ocean container volumes will rise 7.2 percent year-over-year to roughly 2.03 million twenty-foot-equivalent units, according to a forecast from World Trade Service, a sister product of JOC.com within IHS.

The main driver of freight growth is the domestic B2C sector, but airfreight in particular is set to suffer most as the South African Rand’s ongoing depreciation against the US dollar will impact household spending power.

As the South African economy is buffeted by external headwinds and internal labour disputes, both bulk and containerised volumes will experience impediments to growth.