2012-11-18 04:25:26 - New Transportation market report from Business Monitor International: "Russia Freight Transport Report Q4 2012"
Following a year which BMI believes saw increasing volumes across all freight modes, 2012 will signal further growth albeit at a slower pace on the back of the macroeconomic outlook.
Total trade is projected to pick up with our Country Risk desk forecasting a y-o-y increase of 6.5% in 2012 following an estimated growth of 11.3% in 2011.
Road freight is to continue to dominate the sector and is projected to grow by 2% in 2012. The mode did not manage to defy the downturn, but so far appears to be back on its feet and gradually recovering to predownturn levels.
BMI notes that another global port operator - APM Terminals - has entered the Russian port sector; as Russia diversifies routes for
its grain exports; and St Petersburg and Vostochny, two of the country's major ports, completed their recovery in 2011 and will see continued growth over the medium term.
Full Report Details at
- www.fastmr.com/prod/499855_russia_freight_transport_report_q4_20 ..
Headline Industry Data
* 2012 Air freight tonnage is expected to grow by 1.2%
* 2012 Rail freight is forecast to grow by 1.4%
* 2012 Port of Novorossiysk throughput is forecast to grow by 5.5%
* 2012 Road freight is forecast to grow by 1.5%
* 2012 Inland waterway freight is forecast to grow by 2.5%
* 2012 Total real trade growth is forecast at 6.5%.
Key Industry Trends
RZD Mulls Automotive Logistics Venture: Russian Railways (RZD), the state-owned Russian rail operator is poised to acquire a majority stake in automotive logistics firm Gefco. Should the acquisition proceed RZD will expand its rail freight remit outside of Russia, a major pillar of its medium term strategy, and gain exposure to a major growth market within Russia, the automotive sector.
Rail Freight Instigates Gas Fuel Option: A joint venture of Russian Railways, Transmashholding, and Caterpillar subsidiary Progress Rail, are set to develop a natural gas-fuelled locomotive. The project highlights a trend that is gathering steam in the freight transport sector, where transport operators are seeking out fuel alternatives as they battle with high oil prices. In picking natural gas as a possible alternative, the companies are seeking to utilise a fuel that Russia has in abundance.
APMT Enters Russia: APM Terminals (APMT), the global port operator, has finally broken into the Russian market. APMT has been seeking entry into this high-growth container shipping sector for a number of years and has sat back and watched as its rivals have managed to gain entry. The wait for APMT was, however, worth it, with the company set to possess the greatest exposure to Russia out of the foreign port operators that boast facilities there.
New Port Options for Grain Exports: The development of grain terminals at Russia's Far East ports will offer a shorter and cheaper supply chain for Siberian wheat to reach the market and will also enable Russia to diversify its customer base for wheat exports, which is currently heavily focused to catering for North Africa and the Middle East.
Korean Air Cargo Increases Russia Exposure: Korean Air Cargo's freight capacity expansion on its Incheon to Vladivostok flight highlights two core trends that BMI is tracking; the increasing interest from foreign air freight operators in Russia and the growing role which Vladivostok and Russia's Far East are playing in the country's freight transport sector.
Logistics Sector Prepares for 2014 Winter Olympics: The 2012 Summer Olympics may have only just concluded, but in the logistics sector attention is already turning to the 2014 Winter Olympics in Sochi, Russia, with logistics providers setting up shop and transport investment being realised. The Olympics offer growth opportunities for Russia's freight transport sector, as our forecasts reflect.
Risks to Outlook
Russia is exposed to the downturn in the eurozone and country's economic outlook has become more uncertain on account of the ongoing crisis in its major export market. Possible escalation in the eurozone poses a threat to Russia's exports, creating downside risks to our freight forecasts, as does the hard landing for China scenario.
A medium-term upside risk to our outlook is the Sochi 2014 Winter Olympics. BMI expects an uptick in volumes at the Port of Novorossiysk in the build up to the games. We note that Russian freight transport can look forward to another sport-related uptick in throughput, with the country set to host the FIFA World Cup in 2018.
Russia's recent inclusion into the World Trade Organization (WTO) offers another upside risk to our medium-term forecast with trade to be boosted over this period.
Another longer-term upside risk is the development of the Asia-Europe landbridge. While BMI is sceptical of its ability to rival the ocean shipping sector, proposals to link Asia and Europe by rail have the backing of a number of heavyweights in the freight transport sector, such as DB Schenker. Russian rail freight operators stand to benefit when the project takes off.
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