|
|
Home > Business/Finance > Diversified Services > Shipping & Logistics
Indonesia Freight Transport Report Q1 2008
|
|
A total of eight companies were reported in July to have submitted proposals to build an international port
in Indonesia’s Banten province as part of an effort to improve the country’s infrastructure. Banten is in
western Java, Indonesia’s most populous island. Local media suggested the cost of the project would be
around IDR10.1trn (US$1.12bn). Construction would start in late 2008 and continue through to 2025. In
total the government says it plans to develop 25 new international ports. BMI’s newly-released Indonesia
Freight Transport Report concludes that maritime freight traffic will grow at an annual average rate of
7.3% in 2007.
There are a number of factors behind this strong forecast. The Indonesian economy and commodity trade
will grow strongly in a country that is, after all, one of the world’s largest archipelagos. There will be an
interplay between growing domestic demand for freight between and within islands and the wider boom
in regional container-based traffic. Demand for freight from nearby China will benefit Indonesia. Port
capacity is growing, as is the requirement for crude oil and liquid natural gas (LNG) tanker capacity.
We are now projecting an overall annual average growth rate of 6.9% for the freight transport sector as a
whole during 2007-2011. To put this in context, growth will be higher than GDP expansion - expected to
average 5.9% per annum - but the reality is that for an economy of Indonesia’s size and potential this will
still be somewhat below the country’s and the industry’s real potential. Safety concerns and poor
regulation are important constraining factors. By transport mode, we expect air freight to lead the way,
followed by pipeline throughput, maritime and coastal freight. Air freight growth reflects the dynamic
effect of growing domestic deregulation and rapidly rising regional passenger and freight demand, despite
safety concerns (highlighted by a European Union ban on Indonesian carriers at the end of June), and the
possibility of a shakeout among the new budget operators.
Indonesia’s freight industry has a poor-to-average BMI business environment ranking with a composite
score of 36 out of a potential total of 70. This places it below the regional average of 44.5. Comparatively
speaking, its stronger points include the country’s long-term economic risk, freight growth, and the
transport intensity index - a measure of immediately past and future foreign trade growth. Compared
against its peers, however, Indonesia’s scores for long-term political risk, infrastructure growth and the
regulatory and competitive environments are all disappointing, and indicative that a lot more needs to be
done before the industry begins to perform closer to its potential.
For the 2007-2011 forecast period, we expect the transport and communications sector to continue
outpacing the economy as a whole. It will achieve average annual growth of 5.7%, versus 5.9% for
overall GDP. The total value of transport and communications GDP will rise to US$35.6bn in nominal
terms by 2011, representing 6.5% of Indonesia’s GDP.
|
Similar Products
• Hawaiian Holdings Inc.
Published Jul 2008 by SGA Lists
• Providence & Worcester Railroad Co.
Published Jul 2008 by SGA Lists
• RailAmerica, Incorporated
Published Jul 2008 by SGA Lists
• UTI Worldwide, Inc.
Published Jul 2008 by SGA Lists
• GE Capital Rail Services
Published Jul 2008 by SGA Lists
• Amtrak
Published Jul 2008 by SGA Lists
• Crowley Maritime Corporation
Published Jul 2008 by SGA Lists
• Kansas City Southern
Published Jul 2008 by SGA Lists
• Swift Transportation Co., Inc.
Published Jul 2008 by SGA Lists
• Landstar System Inc.
Published Jul 2008 by SGA Lists
|
|
|
|
0 items
