2013-09-30 16:06:09 - New Transportation market report from Business Monitor International: "Hong Kong Freight Transport Report Q4 2013"
Following a year in which BMI freight volumes decreased in all freight modes but one, 2013 will signal similar growth dynamics albeit slightly improving with a notable exception of maritime freight affected by a strike.
US demand is set to continue on its recovery course in 2013, while eurozone remains a lingering concern, although we believe that the crisis has migrated from an acute to a more chronic phase. On balance however, these will have a positive effect on throughput at Hong Kong's port, which caters as a container shipping hub for Asia, and also the country's air freight volumes, with Hong Kong boasting the busiest cargo airport globally. The port of Hong Kong's return to growth in box throughput in
2013, however, will be hindered by a forty day strike at the port. Hong Kong's air freight volumes are forecast to increase by 2.4% in 2013 after a growth of 2.2% in 2012.
Domestic freight volumes have been negatively hit in 2012, with the country's road freight declining by 1.8% on the back of a slowdown in macroeconomic growth, with Hong Kong's real GDP in 2012 slowing down to 1.4% from 4.8% in 2011. In 2013 the country's economic growth is forecast to expand y-o-y by 2.4%, which will boost demand for domestic freight. We therefore project improved growth dynamics for Hong Kong's road freight leading to a marginal growth of just 0.1% in 2013.
Full Report Details at
- www.fastmr.com/prod/686315_hong_kong_freight_transport_report_q4 ..
Headline Industry Data
* 2013 Air freight tonnage is expected to grow by 2.4%
* 2013 Port of Hong Kong throughput is forecast to decrease by 4.5%
* 2013 Road freight is forecast to grow by 0.1%
* 2013 Inland waterway freight is forecast to decrease by 1.0%
* 2013 Total real trade growth is forecast at 3.3%.
Key Industry Trends
Cathay Pacific Attracted by Mexico's Exports Boom - Cathay Pacific Cargo, the freight-carrying wing of the Hong Kong flag carrier, has announced that it is launching a twice-weekly freighter service between its Hong Kong hub and the Mexican city of Guadalajara. This is not only Cathay's first freighter service to Latin America, but also marks the first such direct air freight service between Hong Kong and Mexico. BMI believes that the growth in Mexican manufacturing, in particular that related to the automotives industry, will serve to boost the country's air freight volumes in the coming years
Hong Kong Port Decline Continues - The strike at the port of Hong Kong may have come to an end in April 2013, but the throughput declines at the port have not stopped, with the latest data for May and June 2013 showing a 10.5% and a 3% decreases in container volumes y-o-y at the facility. The declines highlight that the problems that the port of Hong Kong faces go deeper than industrial action.
TS Lines Stops Iran Calls - Hong Kong-based TS Lines has decided to end its Iranian service. As a result of the move, there are no more non-Iranian long haul services calling in Iran, making Iran-based Hafiz Darya Shipping Lines (HDS) the only carrier to operate the Far East-Middle East service with Iranian call.
Risks to Outlook
The major short-term risk to our outlook for Hong Kong freight transport is presented by a potential deepening of the slowdown in demand outlook for Europe, the US and China. If the mainland economy experiences a sharper-than-expected slowdown, or the sovereign crisis in Europe takes a turn for the worse, it would lead to a slower growth outlook for freight volumes through Hong Kong's transhipment hubs. With Hong Kong's freight sector and China's growth so intertwined, the sector will be one of the first in line to be hit should China's slowing growth develop into a hard landing, the threat of which is currently being tracked by BMI's Country Risk team.
Other downside risks exist for Hong Kong's role in the global freight sector, specifically to its transhipment role, as China becomes less reliant on Hong Kong's port and airport for its transhipment, as China's manufacturers move away from the coast into the interior and so away from the Pearl River Delta, the region Hong Kong has traditionally catered for. As China's ports and airports are becoming better connected, demand levels are such that shippers are now able to offer freight options directly to Chinese mainland ports and airports rather than transhipping via Hong Kong.
While we expect this trend to continue, we highlight that Hong Kong is fighting to retain its role as a transhipment hub for the aviation and maritime sectors. Investment and expansion is being ploughed into the nation's air freight and port sectors, with a new air cargo centre opened at Hong Kong International Airport in 2013 and the old runway at the Kai Tak Airport set to resurrect its role in Hong Kong's freight transport sector by being developed into a barge dock.
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