Abstract
In early May, Thailand’s Regional Container Lines (RCL) said the total
number of containers it lifted in
March was 228,000. Although this was a
sharp rise on February (+39.5%), when activity had been low
because of the
Lunar New Year holidays, it was still 20.5% down year-on-year when compared to
March
2008. The fall was attributed to the global recession and the
downturn in international trade. RCL said
ship-owned container (SOC)
volume dropped 28.5% y-o-y in March, while carrier-owned container
(COC)
volume was down by 11.7%. Worldwide it was estimated that around 10.6% of the
global
container fleet had been laid up. Analysts KGI Securities said they
expected the company to report ‘a
huge loss’ in Q109, and
ranked RCL shares as ‘underperform’.
The Thai freight industry
is struggling with the impact of the global economic slowdown, which is
particularly strong in the shipping sector. BMI is concerned by the impact of
global economic conditions,
and in this report concludes that total
freight carried by ship in Thailand will fall by 6.8% this year and
grow
by a lower annual average of 1.8% across the 2009-2013 forecast period,
measured in tonne-km.
BMI’s forecast is based on a variety of
factors. Our Thai GDP growth outlook is for an average annual
expansion
rate of 2.0% over the next five years, down from 4.7% in the preceding
five-year period. Our
latest figures reflect the slowdown in world
economy. Pushing in the other direction is the fact that
Thailand remains
an intensive user of shipping, and has been investing in the development and
expansion
of its ports.
Across all modes, total freight will grow by
an annual average of 2.1% in 2009-2013. Road freight will
grow by 2.5% per
annum, held back by lower demand and the limitations of the highways
network.
Airfreight will take time to recover from the chaos of late 2008.
We project average annual airfreight
growth of 2.3% in the forecast
period. As mentioned we estimate Thailand’s maritime cargo to grow
by
an annual average of 2.7% during the forecast period. Container traffic
is expected to expand somewhat
faster, with the total number of 20-foot
equivalent units (TEUs) handled growing at an average annual
rate of 3.3%.
Railway freight traffic will expand at a lower rate of 1.3% per annum.
BMI’s freight transport index for Thailand comes out at 58.9 (out of a
theoretical maximum of 100.0).
Thailand’s best performance is in
areas such as freight growth, infrastructure growth and the transport
intensity index (a measure of the dynamism of foreign trade). Areas in which
it could do better include
long-term political and economic risk and the
regulatory environment.
BMI expects transport and communications GDP to
rise to US$33.7bn in nominal terms by 2013, or
8.8% of Thailand’s
GDP. The transport and communications sector employed 1.03mn people, or 3.0%
of
the labour force, in 2008. We see this rising to 1.08mn by 2013,
remaining at 3.0% of the labour force.
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