- Language: English
- Published: July 2012
- Region: South Korea
South Korea Freight Transport Report Q4 2011
- Published: September 2011
- Region: South Korea
- 51 Pages
- Business Monitor International
BMI View: Solid Growth
The freight sector is predicted to see steady growth over the medium term, played out in relation to similar growth in terms of GDP and total trade. The highest levels of growth over the medium term are set to be in the air and maritime sectors. However, high oil prices continue to take their toll on the freight transport sector, particularly in an energy import-dependent country like South Korea. Container shippers have also had to contend with the low box rates on the Asia-Europe routes during 2011. This is leading some companies to refocus on dry bulk business. On the plus side, BMI notes that foreign trade is set to grow significantly faster than GDP.
In macroeconomic terms the picture for South Korea is decidedly bearish. After a three-year long decline in money supply growth, Korean M2 growth is now below the rate of CPI (the only country in Asia for which this is the case), which should seriously undermine asset markets and economic activity, before leading to a sharp fall in inflation.
Headline Industry Data
- The total value of South Korea's trade (imports plus exports) is set to grow 10.45% in 2011.
- The Port of Busan will see gross tonnage growth increase of 8.12% in 2011.
- The Port of Incheon is forecast to see gross tonnage growth of 6.31% in 2011.
- Air freight volume is set to gain 7.05% in 2011 to reach 4.08mn tonnes in 2011.
- 2011 rail freight volume is predicted to increase 3.36% to 48.13mn tonnes.
Key Industry Trends
HMM The Latest Line To Strive For Mega Vessel Status
South Korea's Hyundai Merchant Marine (HMM) has become the latest container line to head back to the shipyards. The company, like so many of its peers, has placed an order for a fleet of mega vessels. BMI once again highlights BMI's fear of the ongoing curse of the mega vessels on the Asia-Europe route, with more capacity set to force rates lower.
New Service To Help Korean Air Regain Top Spot?
Korean Air Cargo, the world's second largest air cargo carrier, has launched a new service from Seoul, South Korea, to Zaragoza, Spain. BMI believe that the new service, the third launched so far in 2011, is part of Korean Air Cargo's efforts to regain its position as the leading air freight carrier by volumes handled, a slot it ceded to Cathay Pacific in 2010.
KRRI Signs MoU With IFSTTAR
On May 23 2011, the Korean Railroad Research Institute (KRRI) and French Institute of Science and Technology for Transport (IFSTTAR) signed a memorandum of understanding (MoU) in France relating to research into railway safety. The link up will enable an exchange of information related to bi-modal tram, as well as railroad research. According to KRRI President Hong, the MoU is a 'momentous opportunity to expand global networks in new transportation systems', the KRRI website stated.
Key Risks To Outlook
In terms of risk, BMI believes political issues dominate and lie on the downside. However, BMI is now slightly more concerned by short-term domestic political issues, such as disinflation for instance, as opposed to the dominant longer term issue - Seoul's volatile relationship with North Korea - which has temporarily receded. BMI expects a slowdown in the Chinese economy to occur which will also have a knock-on effect on South Korea's economy due to strong trade links. SHOW LESS READ MORE >
South Korea Freight Transport Industry SWOT
South Korea Political SWOT
South Korea Economic SWOT
South Korea Business Environment SWOT
Industry Trends And Developments
Global Oil Products Price Outlook
Table: Oil Product Price Assumptions, 2011 (US$/BBL)
Table: Oil Product Price Forecasts, 2011-2015 (US$/bbl)
Table: Air Freight, 2008-2015
Table: Maritime Freight - Throughput, 2008-2015 ('000 tonnes)
Table: Rail Freight, 2008-2015
Table: Trade Overview, 2008-2015
Table: Key Trade Indicators, 2008-2015 (US$mn and % change y-o-y)
Table: South Korea's Main Import Partners, 2002-2009 (US$mn)
Table: South Korea's Main Export Partners, 2002-2009 (US$mn)
Long-Term Political Outlook
Table: South Korea – Economic Activity, 2008-2015
Korean Air Cargo (KAL)
Hyundai Merchant Marine (HMM)
STX Pan Ocean (STX)
Hanjin Shipping (Container Operations)
Country Snapshot: South Korea Demographic Data
Section 1: Population
Table: Demographic Indicators, 2005-2030
Table: Rural/Urban Breakdown, 2005-2030
Section 2: Education And Healthcare
Table: Education, 2002-2005
Table: Vital Statistics, 2005-2030
Section 3: Labour Market And Spending Power
Table: Employment Indicators, 2001-2006
Table: Consumer Expenditure, 2000-2012 (US$)
Table: Average Annual Wages, 2000-2012
How We Generate Our Industry Forecasts
- Korean Air Cargo (KAL)
- Korea Express
- Hyundai Merchant Marine (HMM)
- STX Pan Ocean (STX)
- Hanjin Shipping (Container Operations)