Korean surface freight to do well, but not as well as air cargo

SURFACE freight operators in South Korea can expect a good, but less spectacular recovery than the one the airfreight sector enjoyed this year - with first quarter profits soaring 3,300 per cent, according to a report from the London-based emerging market specialist Business Monitor International (BMI).

Korean rail freight is expected to have moderate to low growth, reflecting the fact that most shorter-haul cargo is carried by road, and that priority on the rail system is given to passenger rather than to freight trains. This year, we see 3.5 per cent volume growth to 45.831 million tonnes, following on from the 2009 contraction of 1.9 per cent.

"In 2010, we expect total tonnage at the Port of Busan to rise by 5.5 per cent to 211.2 million tonnes. Our medium-term outlook for Busan tonnage FAXTEXT for 4.1 per cent annual growth, fractionally behind domestic GDP.

"At the Port of Incheon, where volume dropped by 6.6 per cent last year, we are expecting a sharper bounce back with 6.95 per cent growth in 2010 to 141.6 million tonnes. Annual average grow of total tonnage at Incheon will be 5.4 per cent, faster than GDP," said the BMI report.

On the container side, it said Incheon will see average annual expansion of 12 per cent over the next five years, compared to only four per cent for Busan.

In real terms, this year we expect total trade to grow by an impressive 9.5 per cent, but imports will lead the way, rising 11.5 per cent, with exports lagging, increasing only eight per cent.

"In our view, the country's free trade agreement (FTA) with the EU, and similar negotiations with the US on the one hand, and China and Japan on the other, will continue to underpin moderate-to-high trade growth.

"Our five-year forecast in real terms is for trade to grow by an average of 8.2 per cent per annum, as mid point between imports (+8.9% pa) and exports (+7.7%) pa," the report said.
(Source:www.schednet.com)