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Indonesia Freight Transport Report Q2 2011
Business Monitor International, March 2011, Pages: 33
The Indonesia 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 Indonesia's freight transportation industry.
The analyst believes the economic fundamentals are looking good for Indonesia, boding well for the country's shipping sector. Private consumption and investment growth will continue to power the economy in 2011 as Indonesia embarks on what we project will be a decade of robust economic growth averaging around 6.4% per year. The factors driving the Indonesian shipping and port sector will be increasing investment in the intra-Asia route as international companies search for new markets while consumer demand in the US and Europe remains sluggish, and private consumption, which will be boosted by growing consumer confidence and declining unemployment rates.
Headline Industry Forecasts:
- Air freight volumes are predicted to be up 3.4% in 2011, with an average growth of 6.64% during our forecast period.
- Rail freight volumes are estimated to rise 1.08% in 2011, with an average growth of 1.25% during our forecast period.
- Tanjung Priok total tonnage is predicted to rise 5.5% in 2011, with an average growth of 5.23% over our forecast period.
- Palembang total tonnage is predicted to rise 5.57% in 2011, with an average growth of 5.57% over our forecast period.
Key Trends:
Infrastructure Failings Undermine Indonesia's Intra-Asian Trade Potential
BMI believes Indonesia must improve its port infrastructure if it is to capitalise on increasing intra-Asia trade. Plans for a new cargo port at Jakarta are a positive step, but we note that other ports also need work to increase competitiveness and efficiency. The Indonesian government is in talks with the Japanese Bank for International Cooperation about plans to build a new cargo port near Jakarta.
Chinese Investment May Prevent Indonesian Port Sector From Missing The Intra-Asia Boat BMI believes a plan by the Indonesian government to attract Chinese investment is a positive step for the country's underdeveloped port sector. At a recent seminar on the prospects for Indonesia-China relations, Indonesia's Minister for Industry and Trade Coordination, Edy Putra Irawady, announced that the government had prepared a blueprint for a national logistics system covering the development of ports and shipbuilding businesses. He said Chinese investment would allow the plan could go ahead.
Risks To Outlook
On the downside, a risk to our outlook presents itself in the possibility that the country's transport infrastructure, particularly its ports, will not be able to handle the increasing levels of traffic on the intra-Asia route if sufficient investments are not made. Indonesia's main ports suffer from congestion and low efficiency levels, raising the fear that lines could avoid the port, calling at more competitive neighbouring facilities.
The main upside risk to our outlook presents itself in the form of growing domestic consumer demand on the back of declining unemployment rates, which bodes well for container imports, and for investment in transport links.
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