South East Asia's largest shipping line Neptune Orient Lines (NOL) reported a net loss of US$139mn in early November for the third quarter of 2009 as conditions across the group's various businesses remained poor. The loss was precipitated by a significant fall in revenue over the quarter – a 34% yearon- year (y-o-y) drop to US$1.56bn. The company's container shipping arm, APL, was the worst performer with revenues falling by 36% y-o-y to US$1.31bn, culminating in an EBIT loss of US$143mn.

Revenues from the group's logistics and terminals divisions fell by 26% and 16% respectively. Q309 cargo container volumes fell by 6% y-o-y to 586,000 forty-foot equivalent units (FEU), while the carrier's average revenue per (FEU) was US$2,219 over the period, down 29% y-o-y. NOL is the fifth largest operator of container vessels according to AXS Alphaliner's rankings of the world's largest container fleets. The company operates a fleet with a container capacity of 547,992TEUs and boasts a market share of 4%. The company operates 139 vessels, of which 45 are owned and 94 are chartered. A major operator on Transpacific and Transatlantic trade lanes, NOL has found itself exposed to the severest fall in trade volumes on these routes in living memory.

Since our last report, we have adjusted our macroeconomic forecasts for Singapore. Once more we have trimmed back the estimated intensity of the 2009 recession. We see GDP dropping by 2.3% last year, compared to -3.6% previously. We expect growth of 3.9% in 2010 (was 3.2%) and 4.5% in 2011 (was 3.1%). For the 2010-2014 forecast period as a whole, we now expect an annual average GDP growth rate of 4.4%, on a par with the rate achieved in the preceding five years. We maintain earlier adjustments to our mode-specific forecasts for air and sea freight to reflect the impact of, and emergence from, the global economic slowdown. Airfreight will have experienced a difficult year or two, although the medium to long-term fundamentals remain positive. While Singapore in 2008 and 2009 held on to its newly won position as the world's busiest seaport, a strong competitive challenge from Chinese ports such as Shanghai and Shenzhen continues to loom on the horizon. The decision to diversify the city-state's energy supplies and seek long-term liquefied natural gas (LNG) contracts should boost tanker traffic at the expense of pipeline throughput towards the end of the forecast period. Overall, we now expect average annual growth in freight tonnage across all modes to total 4.5% in 2010-2014.

According to our latest estimates, transport and communications GDP fell by 2.2% in 2009, fractionally less than GDP that contracted by 2.3%. For the 2010-2014 forecast period, we expect the transport and communications sector to grow jut ahead of the economy as a whole; it will expand by an annual average of 4.5%, compared to 4,4% for GDP. The total value of transport and communications GDP will rise to US$26.5bn in nominal terms by 2014, representing 12.1% of Singapore's GDP. The transport and communications sector employed 258,000 people, or 10.6% of the labour force, in 2008. We see the employment figure rising to 274,000 in 2014, while as a proportion of the total work force it will remain unchanged at 10.6.

%Official government data show that there are only two modes of freight transport of any significance in Singapore: air and sea. To build an overall picture, we have estimated road, rail and pipeline freight volume data series in gross tonnage. Based on this, maritime freight is the dominant mode, accounting for just over 75% of the total. Air freight transport followed the same trend as air passenger transport between 2000 and 2004 – a fall in 2001 and 2002 in response to the 9/11 terrorist attacks in the US, followed by a recovery in 2003. Recovery was partially derailed by the SARS epidemic, which caused further misery in South-East Asia. There was further recovery in 2004 and 2005 was the first 'normal' year for the sector (despite high fuel prices). Sea freight transport, however, has been on a fairly consistent rising trend in recent years.

With a significant break in the recession of 2009, we foresee a continuation of the growth trends for both air and sea freight transport for the next five years. This forecast assumes that after a pause, underlying growth in shipping demand and cargo rates will re-establish itself. The recession this year will take its toll, however. Consequently, in sea freight we are projecting average annual growth of 4.5%. In airfreight, we are forecasting that tonnage will rise by an average of 5.1% per annum in 2010-2014. We are projecting growth rates of 4.7% for road haulage, 4.2% for pipeline throughput and also 4.2% for rail freight.