Malaysia Freight Transport Report Q2 2012

Business Monitor International
March 6, 2012
47 Pages - SKU: BMI3805223
Countries covered: Malaysia

We are still expecting moderate growth in the Malaysian freight sector in 2012, with no major changes to many of our projections relative to our last quarterly report. Yet downside risks are beginning to increase.

We have reduced our GDP projection by a percentage point to 3.2%, on the back of global headwinds caused by the eurozone crisis and more sluggish growth in China. And another sign of the less benign environment is that we have reduced our projection for real trade growth this year to 3.4%, barely above GDP growth. Political risk also needs to be taken into account: national elections are expected during the course of the year, and by 2013 at the latest. Across our five-year forecast period to 2016, GDP will expand by an annual average of 4.1%, a little lower than in the preceding five-year period.

The freight sector will see broadly above-GDP rates of cargo growth in 2012, influenced by the domestic economy, intra-Asian trade, and the expansion of energy demand across the Malaysian economy.

Headline Industry Data

We have further trimmed the expected growth in the real value of total trade in 2012 to 3.4%, with exports gaining 2.8%. Imports will increase by a higher 4.0%.

Rail freight volume is projected to rise 6.6% to 5.83mn tonnes in 2012 and to average 6.4% annual growth in the five year period to 2016.

Total volume handled at Port Klang will rise 7.7% to 197.70mn tonnes in 2012, while volume at the Port of Tanjung Pelepas will rise by 8.2% to 130.09mn tonnes.

Key Industry Trends More Transport Links With Singapore Discussed After meeting his opposite number from Singapore in January 2012, Malaysian Prime Minister Najib Razak said the two countries were discussing further transport links, including a proposed road tunnel, water-taxi service, and cooperation between Malaysia's regional airport at Senai and Singapore's international airport at Changi. The two neighbours have already agreed a joint US$9.8bn investment package, mainly in property projects and a railway link between Singapore and the neighbouring Malaysian state of Johor.

Airlines Reorganise Routes In Search of Profitability Budget airline AirAsiaX has dropped four long-haul routes (to Mumbai, New Delhi, London and Paris) in a move that may indirectly help the state-owned Malaysian Airlines (MAS). However, parent company AirAsia denies any coordination between the two airlines' strategies. The loss-making MAS has meanwhile cut seven unprofitable routes, although it is increasing services to ASEAN destinations, Beijing, Taipei, and Los Angeles.

Good Prospects for Port Klang BMI is projecting strong growth for Port Klang in 2012. The port's Westports terminal has reported a 15% year-on-year (y-o-y) increase in throughput. With plans underway to increase the port's capacity, we believe the facility should be well placed to take advantage of growing consumer demand in the area. 'The port has been well known to the shipping industry as one of world's best productivity terminal operators in container handling,' said Ruben Emir Gnanalingam, Westports chief executive officer. Gnanalingam is positive about the port's prospects this year and expects to see throughput surpass 7mn twenty-foot equivalent units (TEUs) in 2012.

Key Risks To Outlook We see two important downside risks to keep in mind. Of the two, the most probable is for global growth to be lower than we expect, impacting on Malaysian GDP, and by that route, reducing freight demand.

Our core forecast already incorporates a slow-down factor; the risk here is that it could be more intense than expected, perhaps through a deeper eurozone crisis or a sharper Chinese slowdown. The second unknown is the chance of a sharp increase in Malaysian political risk. We are already contemplating that the domestic political temperature will increase in the wake of the acquittal of opposition leader Anwar Ibrahim. On the whole, however, we believe this will be a relatively benign process, with both the government and the opposition offering reforms and 'better governance' as they compete for future votes.

The risk here is that the process could take a sectarian and violent turn. Political violence would scare off investors and lead to a sharper economic slowdown.



More Trucking reports by Business Monitor International

Freight Transport Report - Turkey - Q3 2014 by Business Monitor International
Turkey Freight Transport Report Q3 2014Following a year in which BMI believes steady growth was seen across the entire Turkish freight transportsector, 2014 will signal ...
Freight Transport Report - Thailand - Q3 2014 by Business Monitor International
Thailand Freight Transport Report Q3 2014The Thai military's assumption of power following failed talks between rival factions in the ongoingpolitical crisis raises the prospect of ...
Freight Transport Report - Japan - Q3 2014 by Business Monitor International
Japan Freight Transport Report Q3 2014Japan's GDP increased an annualised 6.7% in January-March, quicker than a preliminary 5.9%, according todata released by the Cabinet Office ...
Freight Transport Report - Israel - Q3 2014 by Business Monitor International
Israel Freight Transport Report Q3 2014We forecast fairly modest growth in Israel's freight transport sector in 2014, though this will be animprovement for air and ...
See all reports like this >>

More Malaysia Trucking reports

Malaysia Freight Transport Report Q2 2014 by Business Monitor International
Malaysia Freight Transport Report Q2 2014Malaysia's latest real GDP growth reading came in decisively weak at 4.3% year-on-year (y-o-y) for Q213,vindicating our core view that ...
Malaysia Freight Transport Report Q1 2013 by Business Monitor International
Modest Recovery Sets Pace For Freight DemandWe expect a modest economic recovery in Malaysia in 2013, with GDP growing by 4.6%, up from anestimated 3.8% ...
Malaysia Freight Transport Report Q3 2012 by Business Monitor International
Two forces appear to be pulling the Malaysian freight sector in different directions this year. On the downside, the world economy remains somewhat troubled, and ...
See all reports like this >>

More Malaysia reports

D&B Country RiskLine Report: Malaysia by Dun & Bradstreet Inc.
This D&B Country RiskLine Report will help you analyze the risks, opportunities and likely payment delays when doing business in this country. It includes ...
PCs – Malaysia – a snapshot (2010) by Mintel - Snapshots
PCs in Malaysia by Mintel Global Market Navigator provides you with annual year-end market size data, most recently updated in 2010. This market covers desktop ...
See all reports like this >>

 

SELECT A LICENSE

    Report with 3 quarterly updates  USD 1,175  
 
US: 800.298.5699
Int'l: +1.240.747.3093
 

Share this report


    Other tasks

     
     
    Join Alert Me now!
    Receive bi-weekly email alerts on new market research

    Sign up today!