2012-10-28 15:23:21 - Recently published research from Business Monitor International, "Vietnam Freight Transport Report Q4 2012", is now available at Fast Market Research
Vietnam's main export partners, the US, China and Japan, are all set to suffer slowdowns during 2012, but the bleak global economic climate will not prove to be such a great obstacle for Vietnam as its freight transport industry appears to be heading towards a period of sustained healthy growth. Although BMI has downgraded its real GDP growth forecast from 5.8% to 5.2% for 2012, Vietnam's freight industry appears to be bucking the negative trend, with the shipping sector leading the way, followed by road, air and rail respectively.
In the shipping sector, Cai Mep International Terminal (CMIT) achieved a cargo-handling record for Vietnam, having handled 2,100 containers in 11.5 hours for Danish ocean carrier Maersk Line, underling the positives surrounding
this sector over the mid term. Aside from this, CMIT witnessed strong growth as of early July 2012, and is expected to handle almost 600,000 twenty-foot equivalent units (TEUs) by the end of the year, or 50% of the total passing through the port, according to Transport Weekly.
Full Report Details at
- www.fastmr.com/prod/464579_vietnam_freight_transport_report_q4_2 ..
Headline Industry Data
* 2012 rail freight tonnage is set to increase by 3.04% to 8.44mn tonnes.
* 2012 air freight tonnage is forecast to rise by 5.73% to 206,970 tonnes.
* Tonnage handled at the Port of Ho Chi Minh City in 2012 is forecast to grow 7.44% in 2012, whereas tonnage handled at the Port of Da Nang is forecast to increase 3.08%.
* 2012 road freight tonnage is forecast to grow by 6.48% to 663.25mn tonnes.
* 2012 total trade is forecast to rise by 6.23%
Key Industry Trends
APMT Puts Cai Mep On The Map
We believe the positive growth outlook in terms of throughput at Cai Mep is in no small part attributable to APM Terminal (APMT)'s operation of the terminal over the past year. The terminal operator has put an onus on investment and has also attracted new clients operating on key trade routes. We believe APMT's presence will support continued growth at the port over the medium term (2012-2016) as it continues to improve the port's facilities and attract shipping lines keen to capitalise on Vietnam's positive macroeconomic outlook.
Kerry Logistics Constructs New Warehouse
Hong Kong-based Kerry Logistics underlined its commitment to expanding its network in Vietnam with the announcement in July 2012 of the construction of a new warehouse. The facility will cover an area of 11,000 square metres (m2) in the Song Thang area of Ho Chi Minh City. Construction work has already started and is likely to be concluded in Q113. Upon completion, the company will have a total of nine warehouses with a capacity of 62,000m2 in Song Thang. The facilities are aimed at fulfilling rising demand for storage places.
Air China Cargo Chasing Growth In Intra-Asia
There is a growing trend of major freight companies showing an interest in the intra-Asia market, first noted in the container shipping sector, that is currently picking up pace in the air cargo market, BMI has noted. Air China Cargo, the freight subsidiary of Air China, is reportedly preparing to launch a cargo service linking China with Vietnam, the airline's second cargo venture into Asia in 2012.
Key Risks To Outlook
Providing a risk to the downside to Vietnam's freight industry is the fact that we expect to see external demand remaining subdued in the months ahead and we also expect new export orders to remain stagnant in 2012. This should in turn lead to an overall slowdown in net exports. Accordingly, we see net exports growing at just 6.0% in 2012, which is significantly lower than the 16.9% estimated for 2011.
On the upside, air freight development in the country could be about to see something of a boom, with carriers becoming increasingly interested in Vietnam. As well as Air China Cargo planning to enter the market (as we examine in more detail in the Trends and Developments section of this report), other airlines that have begun freight flights to Vietnam this year are Saudi Airlines Cargo, Air Hong Kong (on behalf of DHL) and Asiana Cargo.
Also providing good news going forward for the country is the fact that Vietnam's geopolitical significance will rise over the coming decade, as the US courts it as a potential ally to counterbalance China. Although Hanoi is wary of Beijing's rise, it will avoid a formal alliance with Washington, instead charting a careful middle course between China and the US to maximise its strategic independence. This should provide upside risk for Vietnam's freight industry in that the US is currently by far and away Vietnam's top export partner.
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