2013-03-03 11:01:27 - New Transportation research report from Business Monitor International is now available from Fast Market Research
Following a year which saw mixed dynamics across Ukraine's freight transport modes, BMI believes that 2013 will signal better growth rates in all freight sectors in line with the projected macroeconomic improvement.
Total trade is projected to pick up with our Country Risk desk forecasting a y-o-y increase of 3.61% in 2013 following an estimated growth of 2.62% in 2012, measured in real terms. Road freight is to continue to dominate the sector and is projected to grow by 8% in 2013. Ukraine is not an EU member and thus is not under the same pressure as EU states to reduce road haulage's share of total freight volumes. The mode is estimated to be the quickest to complete the full recovery
to its predownturn freight levels.
Full Report Details at
- www.fastmr.com/prod/541291_ukraine_freight_transport_report_2013 ..
Headline Industry Data
* 2013 Air freight tonnage is expected to grow by 3.5%
* 2013 Rail freight is forecast to grow by 2.0%
* 2013 Port of Odessa throughput is forecast to grow by 2.4%
* 2013 Road freight is forecast to grow by 8.1%
* 2013 Inland waterway freight is forecast to grow by 4.4%
* 2013 Total real trade growth is forecast at 3.6%
Key Industry Trends
Ukrzaliznytsia to Upgrade Rolling Stock Using EBRD Funds
Ukrzaliznytsia will get an additional US$62.5mn from the European Bank for Reconstruction and Development (EBRD) to finance the purchase of freight wagons as part of its rolling stock renovation programme, it was announced in December 2012. The payment is the second tranche issued following a two-tranche loan agreement signed by EBRD and Ukrzaliznytsia in January 2009. The latest funds will be used to purchase new general-purpose freight wagons.
Cargill Interested in Grain Export Options at Illichivsk
The Ukrainian port of Illichivsk is set to increase its grain-handling facilities with the aid of Cargill, the international agricultural producer and marketer. The development highlights a trend we have been tracking in emerging markets which shows that shippers are becoming more involved in their supply chain to ensure their products reach market as quickly and cheaply as possible. BMI highlights that considerable investment is being ploughed into meeting demand for Ukraine's grain exports and that projects to expand the country's ports' grain-handling facilities offers upside risk to our forecasts.
Odessa's Grain Role Keeps On Growing
As well as plans to develop more grain handling capacity at Illichivsk, the construction of a new grain terminal is underway at the port of Odessa. A new grain facility is being developed as the country's maritime sector strives to keep pace with its growing role as a major exporter of grain. The grain terminal project will be the port's fourth and will be capable of handling 4mn tonnes of grain a year.
Odessa Benefits from Auto Imports Outperformance
Car imports via Odessa's roll-on, roll-off (ro-ro) terminal offer the Ukrainian port some respite from the slowdown in trade, with the country's maritime sector buffeted by slowing tonnage throughput and declines in container volumes. Automotive imports are forecast to record double-digit growth in 2012 and are outpacing the country's overall projected import growth.
Illichivsk Set to Get Container Throughput Back on Track
The major development of the year in Ukraine's maritime sector has been the resumption of work by Ukrtranscontainer (UTC) at the Port of Illichivsk. The Ukrainian subsidiary of Russian port operator National Container Company (NCC) returned to the port in February 2012 after an absence of three years.
Risks to Outlook
The base for growth in Ukraine's freight transport sector stems from BMI's positive outlook for the Ukrainian economy. The country's real GDP is forecast to increase by 1% in 2013. A sharper than expected devaluation of the hryvnia could trigger major shockwaves through the domestic economy, particularly within the financial sector, which has barely recovered from the 2008 devaluation. The main upside risks to our forecast relate to China's US$158bn infrastructure programme, announced at the start of September. While Chinese markets are barely linked to Ukraine's steel sector, the announcement could help to boost slumping steel prices in increasingly globalised markets, in turn providing some support to Ukraine's exports and consequently its freight transport sector.
UTC's resumption of work at the Port of Illichivsk offers upside risk to our container and total throughput forecasts for the medium term. We expect UTC to address the issue of the port's comparatively low box throughput and so there is upside risk to our current forecasts.
At the Port of Odessa we also highlight upside risks to our medium term forecast, with the Quarantine Mole project - being developed by German/Ukrainian port operator HPC Ukraina - currently underway and due for completion in 2013. The terminal will provide the port with two new container berths and a draught of 16m, allowing it to cater for the largest container vessels, which we believe is vital as the current trend in the container shipping sector is for lines to use bigger ships.
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