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Singapore Freight Transport Report Q3 2009
Market |
Logistics |
Report Type |
Market Research |
Country |
Singapore |
Published |
15 June 2009 |
Number of Pages |
63 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Neptune Orient Lines (OTC:NPTOY) has increased its cost-saving target from US$250mn to US$550mn
According to reports in April, Singapore-based shipping group Neptune Orient Lines (NOL) was expecting a net loss of US$240mn in Q109, which would come on the back of a net loss of US$149mn in Q408. The declining figures are mainly due to a slowdown in international container-shipping operations.
The company is expecting this trend to continue for the rest of 2009. NOL has increased its cost-saving target from US$250mn to US$550mn in order to offset the declining financial figures. NOL anticipates reporting a loss for full-year 2009, and has already reduced capacity on trans-Pacific and Asia-Europe routes by 20% and 25%, respectively. The company has delayed the delivery of some of the 28 vessels on its orderbook until 2012, and over this period will also remove 22 vessels from its fleet as charters expire.
It is believed the declining trade volume can be attributed to the deteriorating business environment and cost pressures.
The newly released Singapore Freight Transport Report concludes that because of global economic cooling, the country’s maritime freight volume will rise by an annual average of only 0.5% throughout the 2009-2013 forecast period. Our shipping forecast is based on a number of factors. Our forecast for Singapore’s average GDP growth over 2009-2013 now stands at 0.8%, largely because of the sharp contraction this year. NOL and other Singapore-based companies have established themselves as worldclass players. We expect them to be significantly affected, but manage the global downturn reasonably well and position themselves for eventual recovery, despite the growing competitive challenge from Chinese ports. Other transport modes will all be affected by the recession. We are forecasting 0.9% annual growth in air freight over the next five years. Overall, we now expect average annual growth in freight tonnage across all modes to total 0.6% in the 2009-2013 period. With an aggregate score of 63.7 out of a theoretical maximum of 100, Singapore scores well in The freight ratings for the Asia Pacific region, coming out comfortably above the regional average. Its strong rating stems from low long-term political and economic risk and a strong regulatory environment, as well as a moderate, but healthy rate of infrastructure growth.
For the 2009-2013 period, we expect the transport and communications sector to be on a par with the economy as a whole, with both forecast to achieve average annual growth of 0.8%. The total value of transport and communications GDP will rise to US$21.7bn in nominal terms by 2013, representing 12.1% of Singapore’s GDP.
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