Malaysia Freight Transport Report Q1 2011
Business Monitor International, December 2010, Pages: 35
The Malaysia 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 Malaysia's freight transportation industry.
BMI believes intra-Asian trade will become a more important source of revenue for international freight transport operators over the next few years. With demand in Europe and North America expected to remain sluggish, China, Japan and other major Asian exporters are expected to look to their own backyards for growth, encouraged by the young demographics of many developing Asian states. China, in particular, is keen to foster ties with its neighbours and in January 2010, a free trade agreement (FTA) with ASEAN members Brunei, Indonesia, Malaysia, the Philippines, Thailand and Singapore came into effect, creating the world's third-largest trade bloc. The agreement eliminates tariffs on 90% of goods traded between the countries and China. Four other ASEAN member states, Cambodia, Laos, Myanmar and Vietnam, are on course to merge with the bloc in 2015.
The Malaysian macroeconomic environment is improving, to the benefit of the freight transport sector. After falling by 1.7% last year, BMI now predicts that GDP will come back strongly with 4.9% growth in 2010, led by the wholesale and retail trade and a resumption of private sector investment. Across our fiveyear forecast horizon, we expect GDP to grow by a respectable annual average of 4.8%. The danger is that a slowdown in the growth of China or a double dip in the USA could cause GDP to once again falter. The international aviation business has been highly volatile in recent years, but there seems little doubt in Asia that a recovery has taken place. In a sign of the times, Malaysia Airports Holdings was to issue bonds worth MYR2.7bn (US$824mn) in June 2010 to fund the construction of the country's second, lowcost carrier air terminal and refinance existing debt. According to Reuters, the state-owned firm would issue MYR1bn (US$301mn) in Islamic bonds and US$500mn in conventional bonds, reportedly targeting investors from Hong Kong, Singapore and the Middle East. Malaysia Airlines has bought four A330- 200F freighters in 2010 and Transmile Air Services (Malaysia) bought a 23-year-old 737-200SF narrow body freighter. AirAsia said it wanted to increase its cargo revenues 40% in 2010.
The Malaysian airfreight sector will recover strongly this year, lifted by economic growth, the generally dynamic performance of regional Asian airfreight demand and the improving finances of the main local carriers including Malaysian Airlines (MAS). In volume terms we expect total cargo to gain 8.1% in 2010. Railfreight as investment flows into the sector and Malaysia's regional development plans gather pace in volume terms we project 18.2% growth this year, more than correcting for the 2009 contraction of -12.9%. 2010's trade recovery has also made itself felt on the docks. At the Port of Klang (POK), Malaysia's largest terminal for general cargo, BMI is projecting a growth of 24.7%, more than offsetting the -9.6% contraction during the slump of 2009. At the Port of Tanjung Pelepas (POTP), we see volume growth of 17.9% in 2010. Unlike POK, there was no contraction in 2009.
In real terms, we expect Malaysia's total trade (imports and exports) to recover in 2010 with 12.5% growth, following the sharp -11.3% fall in 2009. However, in 2011, as we expect a global economic slowdown originated by both China and the US to come into play, Malaysian trade growth will slow to 3.0%. Across our five-year medium-term forecast, we expect annual average trade growth in real terms of 4.6%.
We believe there are two major risks to our Malaysia freight forecast. The first is if a deeper-thanexpected 'double dip' recession emerges in 2011, particularly in China, which would have a negative ripple-effect throughout Asia, reducing trade growth and shipping demand. The second risk is political and concerns any developments that could take the government's focus off the management of the economy and the gradual reduction of the fiscal deficit. Both the ruling coalition and the main opposition party have been suffering from internal disagreements, so a 'destabilisation' scenario could originate in various different ways.
Executive Summary
SWOT Analysis
Malaysia Freight Transport Industry SWOT
Malaysia Political SWOT
Malaysia Economic SWOT
Malaysia Business Environmnet SWOT
Market Overview
Industry Trends And Developments
Multi-Modal And Logistics
Road
Air
Maritime
Global Oil Products Price Outlook
Table: Oil Product Price Assumptions 2010 (US$/bbl)
Table: Oil Product Price Forecasts (US$/bbl), 2008-2015
Industry Forecast
Air Freight
Table: Air Freight, 2007-2014
Maritime Freight
Table: Maritime Freight, 2007-2014
Rail Freight
Table: Rail Freight, 2007-2014
Trade
Table: Trade Overview, 2007-2014
Table: Key Trade Indicators, 2007-2014
Table: Main Import Partners (US$mn), 2002-2008
Table: Main Export Partners (US$mn), 2002-2008
Company Profiles
Malaysia Airlines System (MAS)
MMC Corporation
Plus Expressways
BMI Methodology
How We Generate Our Industry Forecasts
Transport Industry
Sources
- Malaysia Airlines System (MAS)
- MMC Corporation
- Plus Expressways
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