Recently published research from Business Monitor International, "Hong Kong Freight Transport Report Q3 2012", is now available at Fast Market Research

Boston, MA -- (SBWire) -- 08/22/2012 --Hong Kong's freight transport sector is in for another tough year, with 2012 set to be a year of slowing trade growth in the best case scenario and declines in the worst case. The souring macroeconomic climate, both globally and in Hong Kong has led BMI to revise down all of its freight forecasts for 2012, with port throughput the only sector projected to post positive growth for this year.

Hong Kong's role in both the maritime and aviation sector as a transhipment hub for Asia exposes the country's ports and airports to the tough global trade environment, where demand has been muted by a crisis and projected recession in the eurozone, low growth in the US and slowing economic growth in China.

The impact on these two freight sectors is already being felt, with air freight volumes in Hong Kong down 1.26% year-on-year (y-o-y) for the first four months of 2012 and total tonnage port throughput at the Port of Hong Kong down 0.2% for the first two months of 2012.

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This decline in throughput is also impacting the county's internal freight sectors. On top of the global slowing in growth, Hong Kong's freight transport sectors must also navigate a slowing in domestic demand, with economic growth slowing y-o-y to a projected increase of just 2.2% in comparison with its growth of 5% in 2011.

Despite being the only internal freight network - now that demand for rail freight has dried up - the road haulage sector is still struggling with declining volumes. In 2011, road freight volumes decreased by 7.9%; this trend has continued into 2012, with volumes for the first three months of the year down 6%.

Headline Industry Data

- 2012 air freight tonnage is expected to decrease by 5%.
- 2012 Port of Hong Kong tonnage throughput is forecast to grow by 0.10%.
- 2012 road freight is forecast to decline by 10%.
- 2012 inland waterway freight is forecast to decline by 8%.
- 2012 total real trade growth is forecast at 3.6%.

Key Industry Trends

HKIA Showing The Impact Of The Slowdown

As the world's largest air freight hub, Hong Kong International Airport (HKIA) was always going to feel the brunt of the global slowdown in trade. The airport's cargo operations started the year poorly, with a 17.4% y-o-y decline in January. While the facility recovered somewhat in February due to a full month of operations, the trend for decline has set in over the last two months, with March volumes down 0.3% y-o-y and April cargo levels falling by 0.9% y-o-y.

HKIA Expanding With Third Runway

Hong Kong Air Cargo Terminal Limited (Hactl) has welcomed plans outlined by Hong Kong's government to develop a third runway at HKIA. The projected increase in capacity will likely lead to further cargo terminal expansion plans, with Hactl's annual capacity already exceeding that for which the terminal was built.

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