The impact of COVID-2019 on transport in South Africa

Abstract

In tough economic times, organisations face declining demand and, consequently, operational and financial constraints. Transport and logistics organisations are linked directly to the state of the economy, and the recessional traits impact the ability to operate effectively. At the beginning of 2020, South Africa had entered a recession, with the economy contracting by 1.4% in the last quarter of 2019, following a 0.8% contraction in the third quarter (Stats SA 2020b). Mining and manufacturing contributed to a further 2% contraction in the first quarter of 2020 (Stats SA 2020b), bringing in the third consecutive contraction. In the midst of this, on 11 March 2020, the World Health Organization declared the coronavirus disease 2019 (COVID-19) a pandemic, and on 27 March 2020, South Africa declared some of the world’s toughest lockdown restrictions (BBC 2020) in an effort to contain the virus. With the banning of alcohol and tobacco sales, the closure of international borders and the directive for people to stay at home, the effect on the economy was almost instantaneous. ‘Gross domestic product (GDP) fell by just over 16% between the first and second quarters of 2020, giving an annualised growth rate of −51%’ (Stats SA 2020d). The manufacturing industry, the trade, catering and accommodation industry, the transport, storage and communication industry, and the mining and quarrying industry each decreased by between 65% and 75% (Moneyweb 2020), and household expenditure ‘slumped by 49.8% in line with the closure of hotels, restaurants, transport services, recreational facilities and many stores. Spending on restaurants and hotels ground to an almost complete halt, plunging by 99.9%’ (Stats SA 2020d). With this massive contraction, the question is raised as to the impact this has had and will have on transport, logistics and supply chains in the country.