The price of this market report covers 4 quarterly reports on this sector. This quarterly report will be downloadable instantly as a PDF document, with the 3 remaining reports delivered at regular intervals throughout the year.

Following a year which saw continued growth, according to BMIs estimations, 2012 will signal further expansion in all freight modes which, with one exception, continue to recover their pre-downturn levels.

Total trade is projected to pick up, with our Country Risk desk forecasting a year-on-year (y-o-y) increase of 3.95% in 2012 following estimated growth of 6.50% in 2011.

Road freight will continue to dominate the sector and is projected to grow by 3% in 2012. The sector did not manage to defy the downturn; however, it made a prompt recovery of its pre-downturn volumes and is expected to continue growing in the mid-term.

Headline Industry Data

- 2012 air freight tonnage is expected to grow by 2.1%.
- 2012 rail freight is forecast to grow by 3%.
- 2012 Port of Kaohsiung throughput is forecast to grow by 1.4%.
- 2012 road freight is forecast to grow by 3.1%.
- 2012 total real trade growth is forecast at 3.95%.

Key Industry Trends

Yang Mings Gamble On 16,000TEU Fleet

It is a year since rumours of Maersk Lines plans to order a fleet of 18,000 twenty-foot equivalent unit (TEU) vessels first emerged, and the leader of the global shipping sector remains the only line to have risked ordering ships that large. BMI notes, however, that while no other carriers are yet to join the 18,000TEU club, operators have gone larger in the orders that they have placed over the last year. We highlight the risk associated with such orders, and how this is greater for ship owners compared to operators.

Wan Hai Posts Positive Q311 Results

BMI expects container lines to show greater interest in intra-Asia routes following the latest release of Q311 data, which show Taiwan-based box operator Wan Hai Lines posting a profit. While we believe that exposure to intra-Asia is necessary in order for lines to diversify and therefore mitigate risk, we do not wish to overemphasise the routes role in the box shipping sector. As with the major trade routes, intra-Asia will be exposed to a slowing in global trade as Chinas economic growth slows.

EVA Air Sells Freighters Amid Decline

Taiwans second largest carrier, EVA Air Cargo, expects the decline in air freight volumes from Taiwan to continue into 2012. The company plans to sell further cargo planes, with latest freight traffic figures lower y-o-y but higher than those of 2009.

Risks To Outlook

The strong base for growth in the countrys freight transport sector stems from BMIs positive outlook for the Taiwanese economy. The countrys real GDP is estimated to increase by 3.4% in 2012.

An upside risk to our forecasts comes in the form of Chinese interest in Taiwans ports and expansion projects at its facilities. Downside risk to our freight volume forecasts is presented by the dangers to the countrys export growth: should we see a hard landing as opposed to a moderation of economic activity in Chinas economy, or a double-dip recession playing out in the US, we would expect net exports to take a harder hit.