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Thailand Freight Transport Report Q1 2009
Market |
Logistics |
Report Type |
Market Research |
Country |
Thailand |
Published |
14 January 2009 |
Number of Pages |
57 |
Download |
|
Immediate |
|
Publisher |
Business Monitor International |
Thoresen Thai Agencies (TTA), the country’s largest dry bulk shipping line, said in late October that a sharp drop in freight rates as a result of the global credit crisis would affect its operating results for the following two years. ‘Traders are finding it hard to get letters of credit that guarantee payments for goods, while banks are wary of financing commodities and shipping transactions. This symptom has already been felt and yes, this is going to hit us in 2009 and 2010’, TTA managing director M.L. Chandchutha Chandratat told the Bangkok Post newspaper. In 2007 TTA had reported profits of THB4.97 (US$141.9mn) on revenues of THB21.3bn (US$608mn). Chandchutha said the company would break its profits and sales records in 2008, with full details due to be released at the end of November. TTA’s cash balance of THB10bn and its low level of debt would allow it top weather the financial storm, he added.
While the company had no plans to cut capacity, it would not be making any new investments over a three to six-month period. In this report, although concerned by the impact of global economic conditions, BMI concludes that total freight carried by ship in Thailand in the 2009-2013 forecast period will grow by an annual average of 5.2%, 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 4.9% over the next five years, down from 5.1% in the preceding five year period.
Although shipping traffic will grow marginally faster than the economy as a whole, our latest figure has been trimmed a little to 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 5.2% in 2009-2013. This is quite a bullish figure. Road freight will grow by 5.2% per annum, held back somewhat by the limitations of the highways network. Even taking into account the negative impact of ongoing disruption following the switch in September 2006 to a new international airport in Bangkok, high jet-fuel costs and other issues, we still expect a strong airfreight performance. Despite a tough outlook for 2009, airfreight turnover should grow by an average annual rate of 5.6% in the forecast period. As mentioned we estimate Thailand’s maritime cargo to grow by an annual average of 5.2% 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 8.0%. Railway freight traffic should expand at a lower rate of 5.1% per annum.
BMI’s freight transport index for Thailand comes out at 58.1 (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 the total value of transport and communications GDP to rise to US$33.4bn in nominal terms by 2013, representing 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 the figure rising to 1.08mn by 2013, remaining at 3.0% of the labour force.
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