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UAE Freight Transport Report Q1 2008Product Type: Market Research ReportPublished by: Business Monitor International Published: November 2007 Product Code: R302-2050 Description A challenge is emerging to Dubai and the wider UAE’s role as the region’s key transport and logisticshub. In nearby Saudi Arabia, plans have come together to invest upwards of US$8bn in the new Prince Abdul Aziz Bin Mousaed Economic City, designed as a freight transport hub. Construction is expected take 10 years. However, Dubai need not be too worried, as arguably it has had a 20-year head start, and is chasing some fairly aggressive goals of its own. Dubai Logistics City, part of the vast Jebel Ali International Airport, was due to start operations in 2007 and to be fully complete by 2008. Jebel Ali International Airport will have the capacity to handle 12mn tonnes of cargo annually, more than both Chicago O’Hare and London Heathrow, while Jebel Ali port is already one of the world’s largest container handlers, and pursuing expansion plans. There, the opening of Dubai Ports World's Terminal Two in August 2007 was expected to lead to a capacity increase of an additional five million TEUs (twenty-foot equivalent units) to the existing nine million TEU capacity, according to a company executive. In fact, in our latest UAE Freight Transport Report, BMI concludes that freight carried growth across all modes, measured in million tonne-km (mntkm), will average 6.2% per annum in the 2007-2011 forecast period. Various factors support this prediction. Although the current oil price boom is easing, we still expect the UAE economy to grow by an average of 5.4% per annum over the next five years, providing an important level of support for the freight business. Infrastructure investment will also remain high, with the emirates continuing to focus on a variety of ambitious transport projects in aviation and shipping. Overall, BMI believes the UAE freight sector will expand rapidly in the short term but will slow as global conditions eventually deteriorate. The UAE economy is relatively dynamic and is now more diversified and shows evidence of robustness to withstand external shocks. Strong investment in transport infrastructure and the global ambitions of companies like Emirates Airlines and DP World will be strong positive factors. By transport modes, we expect the fastest-growing sector in the 2007-2011 forecast period to be air, with an annual average of 10.8% growth in freight carried, followed by sea freight with 6.6% and pipeline throughput (6.0%) and road haulage (5.9%), just ahead of GDP. UAE’s overall business environment rating is one of the best in the Middle East and Africa (MEA) region (it shares the number one position in our ranking with South Africa). It scores particularly well in terms of its political, economic and infrastructure environments. The UAE has one of the most liberal business environments in the region and foreign investment is actively encouraged in many sectors. For the 2007-2011 forecast period, we expect the transport and communications sector to continue outpacing the economy as a whole in value terms. It will achieve average annual growth of 5.9%, versus 5.4% for overall GDP. The total value of transport and communications GDP will rise to US$17.7bn in nominal terms by 2011, representing 6.8% of the UAE’s GDP. Table of Contents
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