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Serbia Freight Transport 2011
Business Monitor International, Dec 2010, Pages: 32
Business Monitor International's Serbia 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 Serbia's freight transportation industry.
In early October 2010 BMI commented that a new joint cargo service operated by the national rail companies of Slovenia, Croatia and Serbia had the potential to win back traffic lost to rival routes and transport modes during the Balkan conflicts of the 1990s. Cargo 10 is a joint company formed by the national rail companies of the three Balkan countries. The company will operate a cargo service on a route called Corridor 10, a pan-European road and rail corridor that runs from Istanbul through Serbia, Croatia and Slovenia to Salzburg, linking central and south-eastern Europe.
The formation of the new company is expected to significantly reduce transport coasts and shorten travel times through simplified border and customs controls. The Bulgarian, Bosnian, Montenegrin and Macedonian state railways are in talks to join the new company. BMI notes that the formation of Cargo 10 is another example of companies in the former Yugoslavia cooperating in response to the limited size of their domestic markets. Until the Balkan wars of the 1990s, most freight between Turkey and Western Europe crossed Yugoslavia. Following the conflicts, it was diverted through Romania and Bulgaria. Now only 2% of freight between Turkey and Western Europe is carried by rail. Some 22% goes by road and 75% is carried by ship.
After the recession in 2009 the Serbian economy has begun to stabilise, but we see fairly weak growth ahead. The recovery is 2010 was weak, and although the outlook for 2011 is somewhat better, growth is still below potential. Persistently high unemployment has been holding back private consumption, and a large fiscal deficit is preventing the public sector from driving the economy forward.
The macro-economic environment is therefore only moderately supportive of the country's freight transport industry. Looking ahead, EU-supported infrastructure investment may have a positive multiplier effect on the economy, but this has not yet materialised in full and is somewhat dependent on political risk factors. BMI estimated a 2010 GDP growth rate of 2.7% (following on from the 3.0% slump the previous year). Our outlook for 2011 is for moderate-to-good GDP growth of 3.2%, edging up to 4.0% in 2012. In the five years to 2015 we expected growth to average 5.2% per annum, lower than in the pre- 2009 period.
Serbia's airfreight cargo volume fell by almost one third (29.8%) in the recession year of 2009, after various years of decline. For 2011 we are predicting that the industry will see a second year of weak recovery, with growth of 2.8% to 2,480 tonnes, coming after 1.6% expansion in 2010. The key issue is the small size of the local market and the poor financial condition of local carriers. In the absence of recapitalisation and consolidation, we are relatively pessimistic about the airfreight outlook.
In terms of cargo volume, Serbia's railway system experienced various years of decline, culminating in a very sharp drop of 34.4% in 2009, when the total came down to 8.316mn tonnes. BMI estimates a weak recovery began in 2010 with 1.6% n growth. For 2011 we foresee 3.3% growth to 8.721mn tonnes. In 2011 we expect total road tonnage volume to increase by a moderate 3.4% to 4.336mn tonnes, following a 2.1% gain in 2010. In terms of road freight carried (volume x distance) there will be a gain of 4.2% in 2011.
In real terms Serbian trade slumped by over one-fifth (-23.3%) in 2009, had a moderate recovery in 2010 (estimated growth of 4.0%) and is set to slow down to a virtual standstill in 2011 (+0.6%). In nominal terms we are expecting import growth of 9.2% in 2011 to US$22.19bn, with exports growing by a slightly lower percentage, 8.3%, to US$14.51bn. Serbia will therefore register a trade deficit.
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