Ctrack Logistic Barometer South Africa.

1. Ctrack Logistic Barometer South Africa.

2. Agenda – Always Visible

3. NORTHAMERICA (GLOBALHQ) EUROPE ASIA NASDAQ:INSG Inseego HQ (Corp and Regional) AUSTRALIA & NEWZEALAND AFRICA DigiCore (Ctrack)Est. Feeney WirelessEst. Rebranded toInseego Feeney Wireless Acquisition 2000 1986 2015 2016 1996 1999 Novatel WirelessEst. Digicore (Ctrack) Acquisition Listed Nasdaq > 570K Subscription Management > 450K Ctrack vehicle tracking & management

4. Ctrack Solutions supports Logistic value chain

5. Mike Schussler Mike Schussler is an award winning Economist having won the “Economist of the Year” competition twice. This only happening three times in the past 25 years. He has also won “Small Business and Member of the Year” by the Johannesburg Chamber of Business.

6. The make up of the Ctrack Logistics Barometer of South Africa • The Ctrack logistic barometer is made up of six main subsectors. • Rail • Road • Air • Sea • Pipelines • Warehousing • Measurements are all in either volume or real terms so that real changes can be measured. • We have adjusted slightly to include informal and own transport.

7. Introduction: The Ctrack Logistic barometer. • South African Logistics cost the economy 11.2% of GDP. • Not Value add but total cost to economy. • Transport and storage that is paid for by other companies is 8% of the SA GDP. • Transport is as big as mining and bigger than real estate, business services, retail trade, but smaller than financial services on a value added basis. • It is therefore a very important sector but some of its activities are measured in for example retail trade and mining. • The Ctrack logistic Barometer will be only monthly logistic industry measurement.

8. The make up of the Ctrack Logistics Barometer of South Africa • The Ctrack logistic barometer is made up of six main subsectors. • Rail • Road • Air • Sea • Pipelines • Warehousing • Measurements are all in either volume or real terms so that real changes can be measured. • We have adjusted slightly to include informal and own transport.

9. Ctrack South African Logistics: Logistics Sub-sector weights.Value of GDP was R333 Billion in 2018.

10. What is measured? • For Road transport, not only road freight for contract, but also our unique measurement of some long distance trucking.This will also, by default, include some own transport for the first time • Warehousing is measured via inventories & transhipments • Sea transport is actually cargo handled in our harbours • Air transport is measured via ACSA data and IATA data on unscheduled flights and monthly freight kilometres • Pipeline data is measure via petroleum sales as this is the main product transported via pipelines. (water pipelines internationally fall under utilities as is power) • Rail is from Stats SA supplemented with bulk cargo in ports

11. Why logistics needs to measured frequently? • About 50% of the SA economy is made up of goods. • Logistics is a service that relates to the transport, storage and distribution of these goods. • It is the most important co-incident indicator of goods based economy. • It gives a fair idea how things are “on the ground” in the real economy. • It is an important sector in SA and it binds SA with the rest of the world • We can see very quickly how for example trade wars impact SA real economy and therefore in a sense “the man on the street”

12. July 2019 over July 2018. Very volatile measure.

13. Ctrack Logistics Barometer: Quarter to July 2018 compared to quarter to July 2019

14. % Change on a month ago.

15. Transport truly runs together with the economic cycle. • 25 years ago Transnet had a transport index (complied by author of this Barometer) • It was widely used as an indicator of current economic activity. • Transport has changed and modes are shifting every year for example from Rail to Road. From Road to Air etc. • Moreover Storage has become an important part of Transport and is now slightly more measurable via the Quarterly Financial Statistics and Transhipments. • We will focus on overall logistic index but will note shifts from time to time. • We believe that the logistics sector needs this type of feedback and it will help them to measure their own companies performance against their sub-sector performance.

16. The Ctrack Logistic barometer & the Co-incident index from the SARB.

17. Percentage change in July 2019 over July 2018. One can see the recessions here!

18. One can see the trend is the same as GDP In SA.

19. Ctrack Logistics Barometer monthly speed of change Ctrack Logistic Barometer for South Africa showed a fairly strong monthly growth of 0,8%. This is of course seasonally adjusted.

20. Ctrack Logistic Barometer last quarter change on year ago. Ctrack Logistic Barometer for the quarter to end July 2019 compared to the quarter to end July 2018 shows a fairly reasonable growth. It is likely that the logistics sectors is at present growing slightly quicker than GDP driven mainly by Land transport sectors

21. Land transport generally positive showing some domestic economic activity

22. The land transport indices showing resilience

23. Why is Road gaining market share from rail? • Road & Rail indicative prices have increased over the last decade. Rail prices up by 108% over the last decade while road freight is up 28% over decade - less than a third of the increase of Rail. • The Road Freight industry has over 4000 firms registered at the bargaining council. • Rail is basically a monopoly. • The new locomotives brought were too high in price and some other spending is also too high. • Not quite Eskom, but making life difficult for captured markets • Competition keeps price increases lower!

24. But the Last Month was better for Rail Road Rail Pipeline

25. Revenue earned by product over the last three months by Land transporters for profit.

26. Land Transport: change over last quarter in income (nominal)

27. Rail price increases are higher than road.Price per Ton indexed and equal to 100 in December 2016

28. In the transporting for revenue partthis results in road winning market share.

29. About Land Transport Market share for revenue (not own transporters) • Rail will always keep iron ore, coal and probably most other ores for export. • This bulk mineral export cargo makes up about 77% of rail tonnage. • Some other bulk cargo is also transported such as manganese with another 6% or so. • General freight makes up about 5% of rail tonnage. • It is this part more than most others where rail has lost market share • The other place is bulk liquids which lost to pipelines and probably some to road freight.

30. Road transport movements recorded on road per province: Trucks2016 ( not now but gives ideas where long distance trucks are.) No GFIP or any other metro highways included, just tried to get an idea of long distance trucking

31. International transport and storage

32. International data shows recent weakness but…

33. Change in world Trade CPB

34. International logistics • International air freight was strong until recently • However international air freight movements are 3,8% lower for the same period and this indicates that air freight logistics is under pressure. • While air freight has both a high value and time component it is likely that some national traffic may have gone to land transport particularly courier. • Sea freight and ports cargo handling are also impacted by slow international trade. • Imports are slack at present while exports may feel impact of Trade war.

35. The quarter to end July compared to same quarter a year ago shows weakness in International trade Air Sea Warehousing

36. Containers Landed and shipped: % change on year ago.

37. SA household expenditure seems to reflect landed containers.

38. What containers tell us now. • As domestic economy picks up, more containers are imported and that means import growth may be higher than many suggest so far. • Portnet manager always said I see the SA economy outside my window and how it is doing. • However the weak international economic environment is playing havoc with exports as the trade wars heat up between the worlds biggest manufacturer (China) and the world largest Consumer (The USA). • This means that the suppliers of the world are trampled on as the two big elephants fight. Some trees are being hurt here too. • The divorce between the UK and the EU is probably likely to have an impact as German and UK GDP has already started to decline.

39. We hope to release the Ctrack Logistics Barometer every last Thursday of the month. . The Ctrack logistics Barometer is not only a positive number in July but also provides a lot of insight into the whole transport sector. We hope to be able to keep the country and the sector informed for years to come.

40. Questions? THANKYOU THANKYOU