Belgium Freight Transport Report Q2 2012

Following a year of estimated growth in all freight modes, BMI forecasts further expansion in 2012, with the country's largest maritime facility, the Port of Antwerp, expected to return to pre-downturn levels.

Total trade is projected to continue picking up, with our Country Risk desk forecasting a year-on-year (yo- y) increase of 3% in 2012, following an estimated growth of 5.65% in 2011.

Road freight will continue to dominate the sector and is projected to grow by 0.3% in 2012.

The mode, however, did not manage to defy the downturn and so far appears to be struggling to recover its pre-2008 volumes.

BMI notes that inland waterway freight, the mode that made a major recovery in 2010, has slowed down its growth and will continue to experience moderate expansion over our mid-term forecast period.

Headline Industry Data ..

2012 air freight tonnage is expected to grow by 3.8% ..

2012 rail freight is forecast to grow by 0.3% ..

2012 Port of Antwerp throughput is forecast to grow by 4.8% ..

2012 road freight is forecast to grow by 0.3% ..

2012 inland waterway freight is forecast to grow by 0.5% ..

2012 total real trade growth is forecast at 3.0%.

Key Industry Trends Antwerp Diversifies Box Import Strategy With Emerging Market Focus BMI believes the strategy adopted by Belgium's Port of Antwerp, Europe's second largest container port, to mitigate the impact of the impending downturn in the container shipping sector by shifting its focus to attracting trade from emerging markets in Africa, the Middle East and South America, is a wise move.

We expect that the trend for developed ports to offer their emerging market counterparts their expertise and advice in return for encouraging trade will increase over the medium term, especially as ports look to new markets to drive up trade and therefore throughput as the box shipping sector looks to be in for another slowdown in 2012.

Belgium Looks To Increase Freight Volumes With Chongqing Link-Up An agreement between Belgium and China to link the two countries' air and sea freight operations once again highlights an important trend in which developed states offer assistance to emerging nations' freight transport sectors in return for cooperation, leading to increased freight volumes.

In our view, the latest link-up with the Chinese city of Chongqing will offer upside risks to throughput at Belgium's Port of Antwerp and Liège Airport.

Antwerp To Build World's Biggest Lock Building works have begun on a new lock that aims to improve maritime access to the Port of Antwerp.

The lock, which will be the biggest in the world, is due to open in 2016.

The project is estimated to cost around EUR340mn, half of which will be financed by European Investment Bank (EIB).

According to EIB President Philippe Maystadt: 'The new lock in the Port of Antwerp will help to further develop efficient, multimodal and sustainable goods transport, which will benefit not only the Port of Antwerp and Flanders but also Europe'.

Risks To Outlook Belgium has enjoyed a robust economic recovery, but is heavily exposed to turmoil in the eurozone.

A particular concern is the national debt that, at close to 100% of GDP, leaves Belgium vulnerable to a deterioration in risk sentiment and slowdown in economic growth.

The continued downturn in eurozone economic activity has prompted a downward revision to BMI's growth forecasts.

We now project Belgian economic growth of just 0.5% in 2012, revised down from 0.8% previously.

There are significant downside risks to our medium-term economic growth forecasts, particularly stemming from the impact of fiscal consolidation and the eurozone sovereign debt crisis.

The major issue for freight operators in Belgium is the likely slowing in growth of the country's exports, with the country's top trade partners located in Europe.

Germany, France and the Netherlands are Belgium's main destinations for exports, and all are expected to see a slowing in demand for the country's exports.