Boston, MA -- (SBWIRE) -- 08/03/2012 -- Kuwait's ports have struggled to recover the volumes they enjoyed prior to the global economic downturn, but BMI expects this largely to be achieved in 2012, with only total tonnage throughput at Shuaiba not forecast to recoup lost levels until 2013. If there are continued instances of industrial unrest and strikes, however, as Kuwait's ports have struggled with since the Arab Spring of 2011, then we may have to revise our forecasts down. The air freight sector was also hit in 2011, with volumes actually falling. 2012 has not started well, and we are forecasting very slow growth in tonnage at Kuwait International Airport in 2012.
What continues to bode well for Kuwait's freight transport is our macroeconomic outlook for the country. Oil prices remain elevated, and this is translating into spending by the Kuwaiti government, and greater wealth among the populous.
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Headline Industry Data
- 2012 Port of Shuaiba tonnage throughput growth forecast at 4.8% and to average 5.0% to 2016.
- 2012 air freight tonnage growth forecast 0.5% and to average 1.1% a year to 2016.
- 2012 total trade real growth forecast at 3.6% and to average 3.8% to 2016%.
Key Industry Trends
Agility Secures 2011 Profit Growth Despite Loss Of Revenue From Government Work
BMI notes that Kuwaiti logistics company Agility has recovered well from the loss of its US Army business following allegations that it defrauded the US government over multi-million dollar deals - a charge it denies and is still being contested. As the company continues to develop its non-governmental logistics services, with a focus on emerging markets, BMI believes that Agility will continue to grow.
Kuwait Airways Cancels Additional Flights
Kuwait's national carrier Kuwait Airways was forced to cancel seven flights on March 18 2012 as a strike staged by workers over salary issues entered a second day. The carrier had cancelled nine flights on March 17, when the industrial action began. The government announced a 25% salary increase for state workers in the week ended March 17, but several unions said the measures did not go far enough.
KOTC's Prudent Fleet Modernisation Strategy
BMI believes that KOTC's decision to modernise its fleet will serve the company well. The operator is protected from sinking tanker rates given its role as the government carrier for Kuwaiti crude, and a more modern fleet will be more fuel efficient, especially important given current elevated bunker costs.
Risks To Outlook
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