Iran Freight Transport Report Q1 2011
Business Monitor International, December 2010, Pages: 35
Iran Freight Transport Report provides industry professionals and strategists, corporate analysts, freight transportation associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Iran's freight transportation industry.
The main event in the second half of the year was the tightening of the US-led sanctions against the staterun Islamic Republic of Iran Shipping Lines (IRISL) which the US accuses of advanced illegal weapons of mass destruction and transporting military cargoes. This was aimed at stopping the side stepping of the sanctions through the use of vessel name changes and shell companies. Japan and South Korea have also joined their Western allies in observing the sanctions. So far the effect of the sanctions has been to push Iran towards a closer relationship with countries that are less susceptible to US pressure such as Vietnam, Venezuela and China. Although container throughput at Iran's main container port is up, Western sanctions and renewed US warnings against dealing with Iran's shipping sector mean that BMI sees downside potential to its year-end forecast. The tightening of the sanctions and Iran’s threats of titfor- tat measures, increases the possibility of a naval clash, possibly on the main oil routes.
Shipping liquid natural gas (LNG) is proving to be the next big business opportunity. Iran's shipping sector was reported to be preparing itself for the development of LNG production in the country with the National Iranian Tanker Company (NITC) set to receive a fleet of vessels to cater for Iran's planned LNG exports. The NITC is due to take on its fleet of six LNG carriers in phases between 2014 and 2015, worth US$200-220mn.
The company is expanding other areas of its fleet further – Reuters reported that the company's fleet of 46 vessels was set to increase to 74 ships in 2013. The six LNG carriers will be the first of their type in the NITC's fleet. NITC currently operates a fleet of 28 very large crude carriers (VLCCs), 14 tankers, three chemical carriers and one LPG vessel. BMI notes that the NITC's decision to add LNG vessels to its fleet is in line with Iran's LNG development strategy. The country is expected to export its first LNG in 2013.
The managing director of the National Iranian Gas Company (NIGC), Reza Kassaei Zadeh, has stated that by 2025 Iran is planning to control 10% of the global natural gas trade. Going into the second half of 2010, operating conditions for freight transport companies in Iran remained difficult. High oil prices and a weak recovery in the domestic economy have partially alleviated the position. BMI is predicting GDP growth of 2.1% in 2010, up from a low of 1.0% in 2009. There will be some further modest acceleration in 2011 onwards, but our five-year medium term forecast still puts average annual growth at an unimpressive 3.0%, way below the high single numbers achieved during the oil boom years in the first decade of this century.
Iran's air freight sector will enjoy a weak recovery in 2010 with a year-on-year (y-o-y) increase in tonnage of 0.5%, a marginal improvement on 2009’s estimated figure of 635,540 tonnes. Iran Air's current difficulties sourcing aviation fuel in Europe is a downside risk to this modest forecast.
The Iranian trucking business is set for good growth, with volume hauled expected to grow 3.7% in 2010, and increasing by a further 3.4% in 2011. It is Iran's road freight sector, in BMI's opinion, which holds the most potential for growth in the mid-term, with road freight dominating the country's land-based freight mix. Road haulage is also one of the transport modes least affected so far by economic sanctions.
Goods transported via Iran's rail freight service are estimated to have been flat in 2009. Rail freight volume is expected to grow by 1.3% in 2010. The main port of Bandar Abbas is continuing to defy the downturn and volume of throughput is expected to grow by 11.4% in 2010 after 10.3% in 2009. Iran's total trade in real terms was estimated by our Country Risk team to have decreased by -2.7% in 2009, brought on by an estimated import decrease of -2% and an estimated fall in export volumes of - 3.6%. Trade is expected to pick up again in 2010 with a growth of 0.9% forecast for 2010. Over the midterm, we expect total trade to increase by an estimated yearly average of 1.7%.
BMI warns of the risk potential to these forecasts. Further international sanctions would have a negative impact on throughput and publicity about the port of Bandar Abbas and IRISL being used for the alleged transport of weapons, will no doubt tarnish the reputation of Iran's port sector.
Executive Summary
SWOT Analysis
Iran Freight Industry SWOT
Iran Political SWOT
Iran Economic SWOT
Iran Business Environment SWOT
Industry Trends and Developments
Multimodal/Logistics
Rail
Air
Maritime
Industry Forecast Scenario
Industry Forecast - Freight
Air Freight
Table: Air Freight
Road freight
Table: Road Freight
Rail Freight
Table: Rail Freight
Maritime Freight
Table: Maritime Freight [widen cols]
Trade Overview
Table: Trade Overview
Table: Key Trade Indicators
Table: Main Import Partners
Table: Main Export Partners
Macroeconomic Outlook
Table: Iran - Economic Activity [widen cols]
Market Overview
Company Profiles
Islamic Republic Of Iran Shipping Lines (IRISL)
Iran Air
Country Snapshot: Iran Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 1996-2005
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Manufacturing Wages, 2000-2012
BMI Methodology
How We Generate Our Industry Forecasts
Transport Industry
Sources
- Islamic Republic Of Iran Shipping Lines (IRISL)
- Iran Air
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