Chile Freight Transport Report Q3 2009

The value of Chile's external trade fell by almost 40% year-on-year (y-o-y) in February 2009, according to Chilean shipping periodical Mundo Maritimo in late March.. The report cautions that despite a diversified export market, Chile finds itself exposed to falling trade volumes in the Asia Pacific region as well as on key South America-Europe routes. This is having a significant effect on the country’s port industry. The biggest fall was in the value of exports, which decreased y-o-y from US$5.6bn to US$3.1bn, a fall of more than 44%. Chilean exports were particularly hurt by a collapse in global demand for Chilean minerals, one of the country's staple sources of export revenue, which have also been affected by falling commodity prices. The value of imports also plummeted, falling from US$4.3bn in February 2008 to US$2.8bn, a y-o-y decrease of around 35%. The decline in trade volumes is beginning to impact on Chile's port sector, with leading terminals recording significant decreases in throughput during the first two months of 2009. The country's two largest ports, Valparaíso and San Antonio, the main terminals serving the capital Santiago, both recorded a steep contraction in throughput during February. The data illustrates the extent of Chile's exposure to the global decline in trade volumes, which the WTO is warning may fall by 9% during 2009, the biggest decrease since the Second World War.

In our latest Chile Freight Transport Report, we project that the country’s combined freight traffic across all modes will grow at an annual average of 1.8% in the 2009-2013 forecast period. Various factors support this prediction. Chile remains one of the most open economies in the Americas, which exposes it to down-cycles in the world economy as well as to upturns. That said, the country’s economy will be resilient. We project that freight carried will rise at an annual average of 1.8%, slower than the economy as a whole (2.2%). Within that total, airfreight will lead (3.0% per annum), followed by road (2.4%) with maritime freight dropping sharply (0.7% average annual growth), reflecting the downturn in international trade, particularly with Pacific Rim countries. Rail freight will achieve annual traffic growth of 2.4%.

Chile is at the top end of our Latin American Freight Transport Business Environment Rating, with a composite score of 67.9. It scores particularly well on long-term political and economic risk and on the regulatory and competitive environment. Freight and transport infrastructure growth is comparable to that of countries in the peer group such as Brazil and Argentina.

According to our latest estimates, transport and communications GDP rose by 3.9% in 2008, ahead of GDP expansion at 3.2%. For the 2009-2013 forecast period we expect the transport and communications sector to continue outpacing the economy as a whole. It will achieve average annual growth of 2.7%, versus 2.2% for overall GDP. The total value of transport and communications GDP will rise to US$20.54bn in nominal terms by 2013, representing 8.2% of Chile’s GDP. The transport and communications sector employed an estimated 522,200 people, or 8.6% of the labour force in 2008. We see this rising to 561,000, and 8.7% of the total, by 2013.