Boston, MA -- (SBWIRE) -- 06/06/2012 -- While Hong Kong's port and airport cater for its domestic trade needs, the country's freight transport sector has developed a global role, with both the air freight and container shipping sectors functioning as transhipment hubs in the global supply chain.
While gaining Hong Kong a place at the global logistics table, this role also leaves the country's freight transport sector exposed during periods of slowing global demand. Its freight transport sector will, in our view, be affected by the projected slowdown in China's economic growth, the plateauing growth outlook emerging from the US and the recession hit eurozone.
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BMI also highlights that there is a medium- to long-term threat to Hong Kong's freight role, as more direct connections are made with mainland ports and airports. While we note that this is indeed a threat to Hong Kong in terms of throughput growth, we note that its expertise and highly developed logistics infrastructure will ensure that the country still has a transhipment role to play. In a bid to remain a step ahead of the industry expansion, projects are planned at both the port and airport, which will ensure they keep up with the new trends in the aviation and maritime sector.
Headline Industry Data
- 2012 air freight tonnage is expected to grow by 1.54%.
- 2012 rail freight is forecast to decrease by 1.5%.
- 2012 Port of Hong Kong tonnage throughput is forecast to grow by 2.36%.
- 2012 road freight is forecast to grow by 4.3%.
- 2012 inland waterway freight is forecast to grow by 2.4%.
- 2012 total real trade growth is forecast at 3.6%.
Key Industry Trends
Declining Demand In 2012
The Port of Hong Kong and Hong Kong International Airport (HKIA) have started 2012 badly, with throughput levels at both declining in January. While the early Chinese New Year has indeed been a factor in the declines, BMI believes that the macroeconomic climate will lead to further decreases in throughput in 2012.
Investing To Retain Hub Status
Despite this disappointing short-term outlook, investment continues to be made at the country's port and airport, a wise strategy in BMI's view if Hong Kong is to retain its position in the global supply chain. Flag carrier Cathay Pacific is developing a new cargo terminal at HKIA which will boost freight capacity at the facility and is due online in 2013. Meanwhile, dredging work at the port is underway that will ensure it can keep up with the demand for deeper harbours as vessels get bigger.
Risks To Outlook
The major short-term risk to our outlook is the threat of a deeper recession in the eurozone than currently predicted, a stymieing in the US recovery and a hard landing in China. Each of these scenarios would negatively affect Hong Kong's freight transport volumes.
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