United Arab Emirates Freight Transport Report Q3 2011
Business Monitor International, May 2011, Pages: 59
It is BMI's view that the UAE will continue to make concerted efforts to place itself at the centre of the global forwarding network. The air and especially maritime sectors will see healthy growth over the mid term. After an estimated return to growth for the UAE's primary ports in 2010, this report forecasts growth to continue over the medium term, albeit at a slower rate than before the global economic slowdown in 2009. The air and logistics sectors in the UAE continues to grow at pace, with more logistics companies relocating their hubs to the country, and national air carriers continuing to expand and post improved results. The country does not yet have a rail freight sector, but the UAE's inaugural state of the art rail network is now under way. Total trade in real terms will also enjoy healthy growth over our forecast period.
Headline Industry Data:
- 2011 Jebel Ali and Port Rashid total tonnage throughput forecast to be 150.18mn tonnes, following an estimated 140.62mn tonnes in 2010.
- 2011 airfreight tonnes through Dubai airport forecast to reach 2.18mn tonnes and to grow to 2.81mn tonnes by 2015.
- UAE total trade real growth in 2011 forecast to be 8.55%.
Key Industry Trends:
Rail Development Continues Apace
Etihad Rail's state of the art network is to be focused primarily on freight rather than being utilised as dedicated passenger link between Abu Dhabi and Dubai. There has been a slight deviation from 2010's plan and the AED40bn (US$10.9bn) network will be shorter in length - 1,200km - as opposed to the original 1,500km. The project is to be built in three phases across all seven emirates and will begin in 2012, with the completion date due for 2019. This report believes that railway development will not only benefit the states internally, but once they are connected will also help enhance trade between the members of the Gulf Cooperation Council (GCC).
Air Sector Still Flying High:
The Abu Dhabi Airports Company (ADAC) is weighing up the possibility of establishing new cargo facilities at the international airport. BMI notes that the growth in throughput at the Abu Dhabi International Airport has been exceptional in recent years.
Fujairah Goes With the Grain:
Fujairah, one of the 'northern five' Arab Emirates, has launched a grain-storage programme in a bid to improve food security. BMI notes that the project ties in with the effort being made by the UAE's central government to invest in the poorer, smaller emirates, while at the same time lessening the reliance on shipping goods through the congested, and strategically vulnerable, Straits of Hormuz.
Key Risks to Outlook:
On the downside, if oil prices fell significantly, given Dubai's debt burden and the overall fiscal spending bill, the UAE could find itself in real trouble quite quickly, though with oil prices currently high that should not be a problem in the short term. The UAE has hundreds of billions of dollars in sovereign wealth assets but not all of these are liquid, as shown by the dramatic halving of central bank foreign exchange reserves in the midst of the economic slowdown and real estate decline in 2009. If the government had to start raising income tax, then it would risk political instability and taking away the single greatest incentive it has to offer expatriates.
Additionally, as much as 80% of the population of the UAE is foreign and despite the government's best efforts, private sector firms consistently find non-Emiratis cheaper and more qualified to meet their needs. By law, firms have to employ a certain percentage of locals, however, the system is flawed. BMI's contacts in the Gulf in general say that these policies force them to pay more for less qualified personnel and it seems that locals are not happy either: 60% of UAE nationals working in the private sector have resigned from corporate positions due to 'a lack of career progression and the absence of a mentoring culture among others', according to a study conducted last year by government-sponsored Emirates National Development Programme (ENDP). To redress these imbalances, the quality of education in the UAE will have to improve, and government salaries may also have to fall, in order to reduce its relative appeal compared with the private sector and increase the competitiveness of the local labour market.
SWOT Analysis
- United Arab Emirates Freight Transport Industry SWOT
- UAE Political SWOT
- UAE Economic SWOT
- UAE Business Environment SWOT
Industry Trends And Developments
- Road Freight And Logistics Companies
- Rail
- Air
- Maritime
Market Overview
Container Shipping Overview
- Drivers
- Bellwethers
- Rates
- Players
Industry Forecast
- Air Freight
- Table: Air Freight, 2008-2015 (‘000 tonnes)
- Maritime Freight
- Table: Maritime Freight – Throughput, 2008-2015 (‘000 tonnes)
- Trade
- Table: Trade Overview, 2008-2015
- Table: Key Trade Indicators, 2008-2015 (US$mn and % change y-o-y)
- Table: The UAE’s Main Import Partners, 2002-2009 (US$mn)
- Table: The UAE’s Main Export Partners, 2002-2009 (US$mn)
Political Outlook
- Domestic Politics
- Long-Term Political Outlook
- Foreign Relations
Macroeconomic Outlook
- Table: United Arab Emirates – Economic Activity, 2007-20015
Company Profiles
- Emirates SkyCargo
- Etihad Crystal Cargo
- Aramex
- Gulftainer
- Abu Dhabi National Tanker Company
- Gulf Energy Maritime
- Gulf Navigation Holding
Country Snapshot: UAE 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, 2000-2004
- Table: Consumer Expenditure, 2000-2012 (US$)
Methodology
- How Industry Forecasts are Generated
- Transport Industry
- Sources
- Emirates SkyCargo
- Etihad Crystal Cargo
- Aramex
- Gulftainer
- Abu Dhabi National Tanker Company
- Gulf Energy Maritime
- Gulf Navigation Holding
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