Australia Freight Transport and Shipping Report Q2 2016
BMI View: Over the short term, we do not expect to see overly impressive y-o-y gains across the freightmodes in Australia, but growth will remain in the positive over the medium-term forecast period. Theoutperforming mode will be rail freight, which is set to register annual growth of 4.9% in 2016, while airfreight will trail in third place out of three with y-o-y growth of just 0.7%. Sandwiched in between will beroad freight, which is poised to see y-o-y growth of 3.1%. We expect Australia's liquefied natural gas (LNG)and agricultural exports to grow strongly over the coming years, but they are unlikely to offset thesignificant drag from declining export earnings from the iron ore and coal markets.
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Australia's exports and imports are projected to grow by 3.0% in 2016, but there will be a mixed bagwhen taken individually, with the former set to increase by 6.0% y-o-y, while imports will see a slightcontraction of 0.5%.
Over the medium term forecast period, road freight will overtake rail as the outperforming mode in termsof tonnage throughput, averaging 3.1% y-o-y growth between 2016 and 2020.
Australia will remain a key agricultural powerhouse due to several factors. Firstly, there is a large andincreasing surplus of commodities such as grains, beef, dairy and sugar, which are in high demand,boosting air freight volumes. Secondly, Steady (Developed Asia) or growing (Emerging Asia, MiddleEast) import demand for bulk commodities will also help Australian exports grow. Lastly, Australia hassigned a number of Free Trade Agreements with key agricultural importers (Japan, South Korea andChina) over recent years.
Road freight is once more set to remain the most dominant freight mode in Australia for the foreseeablefuture, accounting for almost 70% of total freight transport handled in 2016.
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